First Option Bank Ltd Personal Loans
Low Rate Personal Loan Secured
OurMoneyMarket offer competitive low rates on loans over $2,000, plus free extra repayments and fee-free redraw facility.
Low Rate Personal Loan Secured (Excellent Credit)
First Option Bank is a member-owned bank that has delivered financial services for Australia for over 50 years. It was previously known by the name First Option Credit Union.
First Option has four branches to visit, all located within Victoria and New South Wales. As such, First Option is an online bank for Australians outside those two states.
In addition to personal loans, members of First Option Bank have access to services such as home loans, financial planning, bank accounts, term deposits and savings accounts.
First Option Bank personal loan repayment calculator
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First Option Bank personal loans rates
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VIP Personal Loan (existing HL customer)
based on $30,000 loan amount for 5 years
Fully drawn advance
based on $30,000 loan amount for 5 years
Fully drawn advance
- Very low interest rates available
- No ongoing fees or early exit fees
- Redraw facility available
- Moderately high interest rates possible
- Limited branches to visit
- Upfront and redraw activation fees possible
Features of a First Option Bank personal loan
First Option Bank has a variety of personal lending options, including secured and unsecured loans with variable or fixed interest rates.
First Option Bank personal loan rates vary from very low to moderately high, depending on the type of loan.
Some personal loans from First Option come with an upfront fee. However, all First Option Bank personal loans are free of ongoing fees.
There are no early exit penalty fees for members who wish to pay off their loans before the end of the loan term.
Redraw facilities are available, and some personal loans come with an activation fee to borrow back money paid on the loan.
First Option Bank personal loans - customer service
Members of First Option Bank have only four branches to visit, and they are all located within Victoria and New South Wales.
First Option acts as an online bank for the rest of Australia. Those who prefer to talk to a person can also do so by phone.
Who is eligible for a First Option Bank personal loan?
First Option Bank personal loans come with the following eligibility criteria:
- Must be at least 18
- Must be a member of First Option Credit Union
- Must pass a credit check
- Must be employed
- Term deposit might be needed for a secured loan
How to apply for a First Option Bank personal loan
An application for a First Option Bank personal loan can be completed in the following ways:
- Online at the First Option Bank website
- By phone
- By visiting a branch
First Option Bank personal loans review
There is a variety of personal loans for First Option members to choose from. This includes secured and unsecured loans, with fixed and variable interest rates.
Very low to moderately high interest rates are available for members of First Option Bank. Those looking to reduce the risk of added debt might be pleased with the lower interest rates available on some personal loans from First Option Bank. No ongoing or early exit penalty fees could also be useful for customers looking to save money on their loan.
With only four branches in NSW and Victoria, potential borrowers in Australia will most likely need to be comfortable with managing their personal loan online or over the phone.
Redraw facilities are available for those who might want to borrow back money paid on the loan. Most loans available come with a redraw activation fee.
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Your credit score will improve if you demonstrate that you’ve become more credit-worthy. You can do that by minimising loan applications, clearing up defaults and paying bills on time.
Another tip is to get the one free credit report you’re entitled to each year – that way, you’ll be able to identify and fix any errors.
If you want to fix an error, the first thing you should do is speak with the credit reporting body, which may take care of the problem or contact credit providers on your behalf.
The next step would be to contact your credit provider. If that doesn’t work, you can refer the matter to the credit provider’s independent dispute resolution scheme, which would be the Australian Financial Complaints Authority (AFCA).
AFCA provides consumers and small businesses with fair, free and independent dispute resolution for financial complaints.
If that doesn’t work, your final options are to contact the Privacy Commissioner and then the Office of the Information Commissioner.
It is possible for students with no available history of borrowing or managing money to get a personal loan, though it may be more difficult as well as expensive than for borrowers with a good credit history.
Having no credit history means having no credit score. While many lenders may consider having no credit score to be better than having a bad credit score, they may still consider it riskier to lend to an unknown borrower and may charge higher interest rates or fees than to borrowers with good credit scores.
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 finance 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 pay off the new loan.
Lenders aren’t allowed to charge interest on loans of $2,000 and under. Instead, they make their money by charging a one-off establishment fee of up to 20 per cent and a monthly account-keeping fee of up to four per cent. Lenders might also ask you to pay a government fee.
For loans between $2,001 and $5,000, lenders can make their money in only two ways: a one-off fee of $400 and annual interest rates of up to 48 per cent.
For loans of $5,001 and above, or for loans that have terms longer than two years, lenders can charge annual interest rates of up to 48 per cent.
Those fee caps don’t apply to loans offered by authorised deposit-taking institutions such as banks, building societies or credit unions, although such institutions are highly unlikely to charge interest rates of anywhere near 48 per cent.
Self-employed borrowers may be eligible for low doc personal loans, which require less documentation in their application process than many other personal loan options.
It’s important to remember that though low doc personal loans may require less paperwork, you may need to provide additional security, or pay a higher interest rate.
Many medium amount loans for $4000 have no credit checks and are instead assessed based on your current ability to repay the loan, rather than by looking at your credit history. While these loans can appear attractive to bad credit borrowers, it’s important to remember that they often have high fees and can be costlier than other options.
Personal loans for $4000 are more likely to have longer loan terms and will require a credit check as part of the application process. Bad credit borrowers may see their $4000 loan applications declined or have to pay higher interest rates than good credit borrowers.
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 be approved faster, while a borrower with bad credit is less likely to have a loan approved and, if they are approved, may be approved slower.
In some instances, bad credit personal loans can help people with bad credit history to consolidate their debts, which can help make it easier for them to clear 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 and potentially fewer fees.
However, this strategy can backfire if the borrower spends the loaned funds 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.
It may be much more difficult for a self-employed borrower to successfully apply for a personal loan if they also have bad credit. Many lenders already consider self-employed borrowers to be riskier than those in full-time employment, so some self-employed personal loans require borrowers to have excellent credit.
If you’re a self-employed borrower with a bad credit history, there may still be personal loan options available to you, such as securing your personal loan against a vehicle of equity in a property, though your interest rates may be higher than those of other borrowers. Consider contacting a lender before applying to discuss your options.
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.