How can I use a personal loan?
A personal loan can allow you to finance a wide variety of personal needs, from a car or boat to holidays, weddings, renovations; quite a range of ‘one-off’ type major expenses.
How much can you borrow in a personal loan?
Depending on your needs, personal loans can be for as little as $2,000 or upwards of $80,000 but $5,000 to $20,000 is most common. Lenders will assess your income and other financial commitments in order to determine how much you can borrow, based on how much you can afford to repay each month, and the timeframe in which you are planning to repay the loan. This length (or term) of the loan is agreed at the outset and can generally range from one to seven years
Secured or unsecured personal loan
A personal loan can be ‘secured’ meaning the bank or lender can take possession of an asset (such as your car) in order to recover its costs if you fail to repay the loan. A secured loan has a lower interest rate than the alternative – ‘unsecured’ loan – as the risk of non-repayment or default is protected by the asset or security.
Buying a new car (or even second-hand) is probably the most common reason for a personal loan. The interest rate and fees are usually much lower than some of the hire-purchase or finance packages offered by car dealers so a personal loan could save you thousands of dollars as an alternative option. And its worth noting, the more expensive the car, the more likely it will be required as ‘security’ for the loan.
Personal loans for Debt consolidation
Since the interest rates in a personal loan are generally lower than any credit card or similar debt, it can be a sound financial strategy to consolidate your high-interest debts into one easy- to- manage personal loan.
For example, Bronwyn of Glebe says; “I streamlined my three different card debts into one personal loan. I reduced my total monthly fees, and only make one repayment a month. The lower interest costs mean I’ll be debt-free much sooner.”
Personal Loans are not for…
Personal loans can’t usually be used for business or even business-related expenses. Other conditions vary, e.g. many lenders will not approve personal loans for paying such expenses as household bills, tax bills or legal fees.
Personal loans can be flexible
Some loans will allow extra repayments, or the capacity to skip some payments, or to pay out the loan earlier than scheduled. Some offer a re-draw facility which means any extra payments you have made ahead of schedule, are available for you to spend on something else; but use this wisely otherwise your extra repayments may be quickly frittered away.
Personal Loan Interest rates;
Personal Loan interest rates may be fixed or variable. A fixed rate means you know the interest rate and the repayments required, as they are set for the life of the loan. Some people like this as peace of mind. A variable rate may rise or fall during the life of the loan so your required repayments can actually increase (ouch!) or fall (hooray!). But both types do have their pros and cons and we can help you decide which one is right for you.
Personal Loans and Fees
Along with the annual interest rate, fees can vary widely between lenders, and can make a big difference in the overall cost of the loan. There may or may not be set-up fees, monthly account fees, late or missed payment fees, or fees for paying off the loan early.
Making the most of your personal loan
A good rule is to borrow no more than you need, and always aim for a shorter term to repay the loan rather than longer, as the longer it goes, the more interest you will pay.
As you can see, with the number of variables in rates, fees, loan term, security, flexibility and all sorts of conditions, getting the best loan can be a bit of a challenge. At we take the time to discuss your individual needs and circumstances then weigh up all these factors to get you the best personal loan to fill your unique requirements.
“Kathy from Home Loans helped me progress the complicated legal and financial matters related to finalising my investment property. She handled the mechanics and much of the negotiation and translated complex information. Kathy was readily available by phone or email, and gave me confidence.”Virginia – Blackheath
I have dealt with Kathy Dundas as a Lending Manager many times.Bronwyn Herrmann - Real Estate Agent in Rockdale Sydney
Kathy has saved me a lot of money, and pointed me in the right direction.
Kathy is prompt and professional. Very knowledgeable in her field.
I have no hesitation in recommending Kathy to Family, clients and friends.