Personal Loan

A personal loan is where you apply to borrow a specified amount of money from a bank for a personal expense.

The loan is then paid back to the lender with interest in equal payments over an agreed period of time.

When taking out a personal loan, interest rates can be either fixed or variable.  

With a fixed personal loan your interest rate stays the same through the term of the loan. The benefit of a fixed rate is that you will know exactly what your repayments will be each month. Whilst a fixed rate gives you stability, if interest rates drop during the term of your loan your fixed rate won’t come down.

With a variable interest rate, your repayments can change throughout the term of the loan.  If interest rates rise, your loan repayments will be higher, however if they go down your repayments will go down. With a variable interest rate, you may also be able to make additional payments to repay the personal loan sooner depending on any early repayment fees.

The personal loan comparison tool will match you with the best rates available.

There are two different types of personal loans, that being a secured personal loan and an unsecured personal loan.    

A secured personal loan is when you use an asset such as a car to secure the loan. Sometimes secure loans offer a lower interest rate compared to that of an unsecured personal loan, as the lender will be able to sell your asset if you are unable to pay the debt.   

An unsecured personal loan is where the lender doesn’t require a security to be held against the debt. You will need to show that you can repay the loan, validate your income and credit report. The interest rates on an unsecured personal loan are sometimes higher than that of a secured loan.

If you are looking a getting a personal loan, before you do anything contact Jeff your local mortgage broker at Homeloans Plus, he will be able to assist with your personal loan application and guide you through the process.