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What to look for when doing a personal loan comparison – and how to find out how to choose the best personal loan for you.
When looking for the right personal loan for you it’s useful to do personal loan comparison. It’s easy to get bombarded with information when searching for a personal loan online. To avoid getting overwhelmed we’ve come up with a few helpful tips that will, hopefully, help you avoid feeling this way. We’ll tell you exactly what to look for, which will help you make the best decision for you.
You may need a personal loan to help you out in a financially sticky situation – we’re sure everyone knows how stressful those unexpected financial strains can be! In times of stress, the last thing you want is even more stress when trying to decide which loan to go with. Don’t worry, after spending 6 minutes running your eyes through this article, choosing the right personal loan for you will be a breeze!
What do I need to get a personal loan?
Before you apply for a personal loan, you should make sure to have a few things ready.
The basic requirements for getting a personal are:
- Be at least 18 years old, therefore you may need to provide a form of ID.
- Be an Australian citizen or have permanent residency.
- Live in Australia.
- Have received a regular income into your account for at least 3 months.
- Have a personal contact number.
Apart from that, that’s it! Depending on how much you want to borrow, you may be required to provide details of your credit rating. Personal Loan Pal doesn’t conduct credit checks, however, the lenders we find may, but don’t that deter you from applying for personal loans.
Finally, you will need access to internet because Personal Loan Pal applications are done 100% online.
What can a personal loan be used for?
You may be wondering what a personal loan could be used for. Well, a personal loan can be used to pay for any small-scale unexpected expenses. They are generally used to pay for practical expenses specific to the individual borrower and are usually once-off unexpected cash requirements. The following are some examples of what expenses a personal loan could help finance:
- Medical bills
- Dental bills
- Household items
- Household maintenance or renovations
- Car repairs
- Moving expenses
- Travel expenses
- Funeral costs
- Other emergencies
Why is it important to make do a personal loan comparison?
Before you go shopping for something specific do you check out a few different stores or products before deciding where one you are going to buy what you need? It’s not surprising if you do – most people prefer to make sure they are getting what they need at a price that best suits their personal circumstances.
Personal loans are no different! You need to do a little shopping around before you make a choice, but the difference with personal loans is that it’s not your typical product that you by in a store. It’s a financial loan and there are some specific things you need to look out for.
Not to worry, we are going to tell you exactly how to do a personal loan comparison in Australia.
What to compare when making personal loan comparison?
When making a personal loan comparison these are the most important things you need to look out for:
- Term of the loan: how long the loan repayment period is
- Fees and charges: how much it will cost you for you the personal loan
- Terms and conditions: specific rules of the loan contract
#1 Comparing Loan terms
The loan term refers to the time period over which you must pay the loan back which can range from a few months to a few years. This will always depend on the size of the loan that you need and how much you can reasonably afford to pay back each month.
Some loans may have lower interest rates, to be paid back over a longer duration. This may seem appealing but it could end up costing you more at the end of the loan term. Something to remember is that the longer the loan term is, the more interest you will pay. Also, ensure that when you are doing a personal loan comparison you should always make sure that the terms of the loans you are comparing are the same.
#2 Comparing fees and charges
It’s important to look at personal loan comparison rates when choosing the right loan for you. The best way to compare loan rates is by multiplying the rate by the term time. This way you will know how much interest you must pay over the term of the loan and then you can compare the total amounts with each other.
Personal loan lenders will almost always charge an upfront fee. This is often a percentage of the loan amount that you need to pay when you first commit to the loan.
Some Lenders could also charge penalty fees for direct debit dishonours. It important to know what these payment failure or ‘dishonour’ fees are as they can ending up costing you a lot!
#3 Comparing terms and terms and conditions
Terms and conditions vary between lenders and loan types. It is always important to read the terms and conditions when making a personal loan comparison because this could determine your choice of loan.
For more information on personal loan comparison visit MoneySmart.
Comparing secured and unsecured personal loans.
Secured personal loans are loans that allow you to offer an asset that serves as a security to ensure to lenders that you are good for the money you are borrowing. Making a secured personal loan comparison would require you to compare what the assets lenders are asking you to supply. Usually, boats, cars, motorbikes and caravans are used as security on short term personal loans. It is important to remember that if you are unable to make the repayments, the lender is legally allowed to repossess or sell the assets that you used as security. So, watch out for this!
Comparing unsecured personal loans.
Unsecured personal loans are loans that do not require an asset as security for your payments. They are harder to get, but if you can prove to lenders that you have a good credit rating and are in a stable financial positon, you should have no problem getting one. When making an unsecured personal loan comparison, it is therefore important to compare rates, fees and charges lenders are asking for.
Loan terminology – what to look out for
Important terms to look out for when making a personal loan comparison:
|Loan term||The period over which the loan is repaid|
|Fees and charges||The costs associated with borrowing from creditors|
|Loan rates||The monthly interest rates included when repaying the loan|
|Secured personal loans||Loan secured by an asset as financial security|
|Unsecured personal loans||Loan unsecured by asset, is approved with a good credit rating and strong financial positions|
|Terms and conditions||Specific rules associated with the repayment of a loan|
|Lenders||The creditors who lend the money|
|Credit rating||Score given to you based on your financial history. The higher the score the better.|
Need a personal loan comparison?
So, when deciding what personal loan to choose there are a few things to take into consideration. If you consider everything we’ve mentioned in this guide, the process should be little less daunting!
Sound like a lot of work? We have another option for you.
Use the handy calculator above to apply for a lender that can offer a personal loan right here. Here at Personal Loan Pal, we do the personal loan comparisons for you. Everything from rates, fees and charges, loan terms and amounts are drawn up and compared. This should make your decision much more simple as everything is done for you!
Check it out and see how much easier personal loan comparisons are with this tool.