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What is a $2,000 personal loan?
A $2,000 loan, usually known as a small personal loan, is one that helps borrowers who need financial help to pay for holidays, medical bills, weddings, home and car repair, etc.
A small $2,000 loan is generally the minimum that major banks and financial institutions are willing to lend.
Borrowers with good credit who are looking for personal loans under $2,000 might need to get assistance from a credit union or online bank.
Borrowers who have bad credit and are looking for a loan for less than $2,000 might need to go through a payday lender. However, this is usually only advisable for emergencies and once all other options have been exhausted.
Can you get a $2,000 personal loan if you have bad credit?
Yes, a $2,000 loan with bad credit is possible, but this will most likely fall under the category of payday loan rather than personal loan.
Most major banks and credit unions avoid risky loans, whereas a payday $2000 loan with no credit check is possible.
A $2,000 cash loan from a payday lender typically comes with high fees, so it is usually only advisable under emergencies where no other options are available.
How do you compare $2,000 personal loans?
You can use RateCity’s personal loan comparison tool to evaluate the following:
- Advertised rate - the interest rate that will be calculated each month against the remaining amount of debt on the borrower’s loan.
- Comparison rate - this represents the total amount a borrower can expect to pay when calculating interest rates and fees on the loan.
- Fixed rate - loans with a fixed rate means the interest will remain the same throughout the duration of the loan.
- Variable rate - loans with a variable rate will have an interest rate that fluctuates with the market.
- Loan term - the duration of the loan and when the lender expects the debt to be settled.
- Monthly repayment - the minimum monthly amount a borrower is expected to pay the lender each month.
- Total repayments - the amount the borrower can expect to pay in total to the lender over the duration of the loan. This does not account for any late fees or early payment.
- Upfront fee - a one-time application-processing fee for new loans.
- Ongoing fee - the lender charges a reoccurring fee in addition to the loan’s interest.
- Early exit penalty fee - a charge the borrower will incur if the debt is paid off before the end of the loan term.
- Missed payment penalty - a fee charged to the borrower if they fail to make their monthly payment on time.
- Redraw facility - this gives the borrower the option to borrow back money that has already been paid on the loan.
- Loan type - a secured loan will require the borrower to offer the lender collateral such as a car or a house on their loan. An unsecured loan requires no collateral.
Who offers $2,000 personal loans?
Major banks, credit unions, online banks and financial institutions offer $2,000 personal loans for Australians.
Potential borrowers are encouraged to use RateCity’s comparison tool to find the cheapest $2,000 loan available for their circumstances.
How do you take out a $2,000 personal loan?
To take out a $2,000 personal loan, the borrower needs to apply with a financial institution in person, online or by phone.
Lenders will often look for the following details about the borrower when determining who to approve for a loan:
- Credit history
A $2,000 loan with no credit check is possible for applicants with bad credit through a payday lender. However, in most cases a payday loan should only be sought for emergency purposes when no other options are available. The notoriously high fees associated with payday loans are best avoided unless absolutely necessary.
How long does it take to get a $2,000 personal loan?
The times it takes for approval on a $2,000 personal loan vary depending on the financial institution. Banks will need to verify the applicant’s details in addition to a credit history check.
A $2000 instant cash loan is possible through a payday lender, but considering this option should only be used for emergencies. Payday loans usually come with high fees and should usually be avoided if other options are available.
What are the pros and cons of $2,000 personal loans?
As with any loan from a financial institution, there are some pros and cons to consider before applying:
- Very low interest rates may be available
- Access to cash for unexpected circumstances
- Potential to pay off loan early
- Redraw options available
- Interest rates may be high
- Possibility of an upfront fee
- Early exit fees from some institutions
- Late payment fees may apply
What is a $2,000 payday loan?
A $2,000 payday loan is a borrowing option for people who need a $2,000 loan (usually with bad credit) and are experiencing a financial emergency.
Borrowers who need a $2,000 loan urgently are often advised to only go through a payday lender if no other options are available.
Payday lenders often have a poor reputation due to the high fees associated with their loans and typically should only be used as a last resort to help with financial necessities.
What’s the difference between a $2,000 personal loan and $2,000 payday loan?
A personal loan is often preferable to a payday loan as they typically come with more favourable loan terms.
The following should be considered when examining the difference between the two lending sources:
PERSONAL LOAN FEATURES
- Offered by major banks, credit unions and online banks
- Low interest rates available
- Multi-year loan terms available
- Good credit most likely needed
- Varying application processing times
PAYDAY LOAN FEATURES
- Offered by payday lenders
- High fees with expensive repayments
- Loan terms usually up to one year
- Loans with bad credit available
- Loans received within 24 hours
Who offers $2,000 payday loans?
Most payday lenders offer loans up to $2,000.
While cash loans for $2,000 are available from payday lenders, it is usually advisable to only use their services if other lending options (such as personal loans offered by banks) are not available.
Payday loans should only be considered in the event of a financial emergency after all other options have been exhausted.
Jerry needed $2,000 for home repairs around the house. He compared different lenders and found one that was suitable for his financial situation. Jerry filled out an online application including his personal details, income, employment and credit history.
The lender approved the application after Jerry passed a credit check. He received a $2,000 loan with a two-year term. This loan came with a 4.74% fixed advertised rate and 5.02% comparison rate with monthly payments of $88. There was also a $200 upfront fee.
Jerry made his payments on time and paid off his debt, which totalled $2,112, by the end of the term limit.
Mark Bristow is a senior financial writer for RateCity and an experienced analyst, researcher, and producer. Working for over ten years, Mark previously wrote and researched commercial real estate at CoreLogic, and has seen articles published at Lifehacker and Business Insider, among others. Most recently, Mark has joined RateCity working across finance as a whole. Whatever the topic, Mark’s goal is always to provide simple solutions to complex problems.
In the best-case scenario, an application for a bad credit personal loan can be made within minutes and then be approved within 24 hours.
The worse your credit history, the harder you will find it to consolidate your debts, because lenders will be less willing to lend you money and will charge you higher interest rates.
However, people with bad credit histories can make debt consolidation work by following this three-step process. First, find a lender willing to give you a bad credit personal loan – this process will be simplified if you go through a mortgage broker or use a comparison website like RateCity. Second, make sure the interest repayments on your new loan are less than the repayments on the loans being replaced. Third, instead of spending those savings, use them to repay the new loan.
A bad credit personal loan is ‘secured’ when the borrower offers up an asset (such as a car or jewellery) as collateral or security. The lender can then seize the asset if the borrower fails to repay the loan.
Some lenders are able to approve applications over the internet and within minutes. However, there is a catch. People who take out easy/instant loans generally pay higher interest rates and are restricted to lower amounts than people who follow a traditional borrowing process.
A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.
Loan sizes usually range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.
Few, if any, lenders would be willing to give guaranteed approval for a bad credit personal loan. Borrowers with bad credit histories can have more complicated financial circumstances than other borrowers, so lenders will want time to study your application.
It’s all about risk. When someone applies for a personal loan, the lender evaluates how likely that borrower would be to repay the money. Lenders are more willing to give personal loans to borrowers with good credit than bad credit, because there’s a higher likelihood that the personal loan will be repaid.
So a borrower with good credit is more likely to have a loan approved and to get that approval faster, while a borrower with bad credit is less likely to have a loan approved and to get that approval slower.
In some instances, bad credit personal loans can help people with bad credit history to consolidate their debts in such a way that it makes it easier for them to repay those debts. This is because the borrower might be able to consolidate several debts with higher interest rates (such as credit card loans) into one single debt with a lower interest rate.
However, this strategy can backfire if the borrower spends the extra money instead of using it to repay the new loan. Another disadvantage of bad credit personal loans is that they have higher interest rates than regular personal loans.
The Australian personal loans market contains dozens of lenders offering several hundred different products. Personal loans are available through a range of institutions, including:
- The big four banks (ANZ, Commonwealth Bank, NAB and Westpac)
- Smaller banks (such as Bank of Queensland, Bendigo Bank and MyState)
- Mutual banks (such as Heritage Bank, Greater Bank and Newcastle Permanent)
- Credit unions (such as People’s Choice Credit Union, BCU and Community First Credit Union)
- Non-bank lenders (such as Pepper Money, Liberty and RACV)
- Peer-to-peer marketplaces (such as Harmoney, SocietyOne and RateSetter)
There are three main ways to access personal loans. You can go through a comparison website, such as RateCity. You can use a finance broker. Or you can directly contact the lender.
It’s unusual for a lender to make a personal loan above $100,000, although there is no formal limit. As with all lending products, each lender sets its own policies, while each borrower is assessed on a case-by-case basis.
Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans – they also get loaned less money. Each lender has its own policies, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.