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Liberty Personal Loan (Excellent Credit History)
3 years to 7 years
Fixed up to 9.35%
Low Rate Personal Loan Unsecured (Excellent Credit)
1 year to 7 years
Fixed up to 8.5%
Unsecured Personal Loan - (Excellent Credit)
Fixed up to 9.99%
Low Rate Personal Loan - (Excellent Credit)
2 years to 3 years
Discounted Personal Loan
1 year to 10 years
Discount Personal Loan
1 year to 7 years
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Australia’s best personal loans for July 2020
If you’re aiming to clear your debts in the short-to-medium term, it might be worth considering consolidating your debts into one personal loan.
No monthly ongoing fees
Australian lenders are prepared to offer a variety of loans for different purposes due to the competitive loan marketplace and you can choose a fixed rate or a variable rate of interest. When you are searching for the best possible deal it’s important to remember to look at ongoing fees payable monthly, as well as establishment and settlement fees.
What are monthly ongoing fees?
In addition to a fee for setting up your loan, some lenders also make monthly charges for administration. This means that the total monthly outgoings for your loan are likely to be part interest repayment, part capital repayment and part administration charge. A loan arrangement with no monthly ongoing fees is one that will mean you are still repaying interest and capital, but not administration charges.
Why look for a loan with no monthly ongoing fees?
There are a number of reasons why you might want to choose a loan with no monthly ongoing fees:
- It’s a cheaper option to select a loan where no ongoing monthly fees are due;
- It helps your personal cash flow if you don’t have to factor in monthly administration charges on top of your loan repayments.
- Not having to pay monthly charges may mean that you can afford to overpay your loan every now and again;
- Such extra payments will serve to reduce the amount of debt you have and this in turn will reduce the interest you’re paying.
What are the main features?
Lenders that charge monthly ongoing fees must advertise the fact when setting out the details of the products they are offering. Some lenders ask for a one off setup fee, but then waive any ongoing charges. Other lenders will waive the setup fee but then charge you ongoing monthly fees for the period of the loan. If you do a quick calculation when comparing loans for the same amount over the same period you can usually tell which is the better deal.
Loans with no ongoing fees have become more and more popular in Australia, although many of these do not offer the same kind of features as others and sometimes the interest rate is slightly higher. For example, you may not be able to link an offset account to a loan with no ongoing fees, which could be a disadvantage for some people.
What are the pros and cons of a loan with no monthly ongoing fees?
The chief benefit is that you’re paying less each month and everything you are paying is paying down your borrowings. There’s also the advantage of perhaps being able to afford occasional extra payments to reduce your debt quickly. Always ensure the lender won’t charge you for overpaying before you select this option.
Remember: Australian lenders are always competing to make their products the most attractive, which is why it’s possible to spot loan packages with no establishment fees, no early exit fees and no monthly ongoing charges. That is why it is important to shop around for a loan.
Always check the terms and conditions of your loan contract for specific information about no monthly ongoing fees.
Kate was one of RateCity's Personal Finance Commentators. She has been a journalist for more than a decade, most of which has been spent writing about money. Most recently, she was the Australian Financial Review's personal finance correspondent. She is passionate about personal finance and women's independence.
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It can be hard to improve your credit score, as it usually requires sacrifice and discipline, but hard doesn’t necessarily mean complicated. Some simple ways you can give your credit score a boost include closing extra credit cards, reducing your credit card limit, pay off any loans and make loan repayments on time.
As a general rule, the lower your credit score, the more remedies you can apply and the greater the scope for improvement.
Some lenders will consider personal loan applications from a borrower with bad credit if the borrower has a family member with good credit willing to guarantee the loan (a guarantor).
If the borrower fails to pay back their personal loan, it will be their guarantor’s responsibility to cover the repayments.
Personal loans may require a borrower to provide proof of identity, proof of residence, details of any other outstanding loans (including credit cards), details of assets they own (e.g. savings, car, property), and proof of income.
While borrowers in full-time or part-time employment can often provide payslips and similar documents to prove their income, self-employed borrowers may need to provide other documents, such as bank statements or tax returns, to demonstrate that their income can cover a loan’s repayments.
If you’re having trouble being approved for a loan of less than $2000 and urgently need to purchase household essentials, there may be emergency loan options available to you.
For example, the No Interest Loans Scheme (NILS) allows low-income borrowers to take out interest-free loans of up to $1500 for essential goods and services.
For further assistance, consider contacting a financial counsellor, or calling the National Debt Helpline on 1300 007 007
It can be more difficult for unemployed borrowers to successfully apply for a personal loan. Most lenders require borrowers to have a regular income available to cover the cost of loan repayments.
If you’re self-employed, or if less than half of your income comes from Centrelink, you may not be eligible for some personal loan options. Consider contacting the lender before applying.
Much like applying for other personal loans, applying for personal loans for single parents will likely require the following:
- Proof of identity
- Proof of residence
- Proof of income
- Details of assets (e.g. car, home)
- Details of liabilities (e.g. credit cards, other loans)
- Loan amount
- Loan term
Many borrowers use quick loans to cover short-term or urgent costs, such as paying for car repairs, medical bills, or replacing broken appliances or electronics. Quick loans often have high interest rates compared with regular personal loans.
Before applying for a quick loan, consider your other available options, such as working out a payment plan or applying for an advance or extension.
Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.
If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.
Depending on the lender, personal loans and medium-amount loans for $5000 can sometimes be approved in under an hour, and give you access to the money the same day. Other loans may take 24 hours or longer to assess your application, and you may not get the money for a few days.
If you need to borrow $2000 or less, alternatives to getting a personal loan or payday loan include using a credit card or the redraw facility of your home, car or personal loan.
Before you borrow $2000 on a credit card, remember that interest will continue being charged on what you owe until you clear your credit card balance. To minimise your interest, consider prioritising paying off your credit card.
Before you draw down $2000 in extra repayments from your home, car or personal loan using a redraw facility, note that fees and charges may apply, and drawing money from your loan may mean your loan will take longer to repay, costing you more in total interest.