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9.99%
Fixed
11.24%
Secured Fixed Low Rate (Excellent Credit Rating)
Product | Advertised Rate | Comparison Rate | Company | Monthly repayment | Upfront Fee | Features | Go to site | |
|---|---|---|---|---|---|---|---|---|
9.99% Fixed | 11.24% |  | $968 | $250 | Redraw facility Extra repayments Fully drawn advance Secured | More details | ||
8.00% Fixed | 8.36% |  | $940 | $250 | Redraw facility Extra repayments Fully drawn advance Secured | More details | ||
From 12.99% Fixed | 14.22% | | $1011 | $250 | Redraw facility Extra repayments Fully drawn advance Secured | More details |
When you take out a personal loan there are two main options that can be chosen, depending on your requirements and what a lender is prepared to offer you. Secured loans are a way a bank or other lender can protect their investment because these types of loans are secured by an asset that is used as collateral, such as a home or a car. Unlike unsecured loans, where there is no asset placed as collateral protection for the lender, a secured loan gives that lender more comfort in the knowledge that if you default they may be able to sell the asset to get their money back.
Secured loans are popular if you want to borrow a large sum of money, such as for purchasing a property or a new car, and in general you may be offered higher borrowing limits, lower interest rates (and, possibly, fees) and a longer term for the debt to be repaid. Understandably, lenders are unlikely to advance a large amount of money without some assurance that it will be repaid. If you put, for example, your house up as collateral the lender reckons you will do everything you can to keep up regular payments until the loan term is ended. Secured loans can also be advanced as home equity loans, based on the current market value of your home less the amount you still owe. Once again, the house is the collateral for the loan
As the name indicates, a secured loan is secured on an asset that you possess. The most common form of a secured loan is when you take out a mortgage. The loan is secured on the property you are buying and the assurance of that kind of protection for the lender means they may offer more advantageous interest rates and let you borrow more than you would otherwise have been able to. Repayment periods for large secured loans can be up to 25 years, and some companies may offer an even longer period. When you are looking at the repayment period for a secured loan remember the longer the time you take to repay the more interest you will be paying.
Secured loans can be negotiated with either fixed or variable interest rates so you can make a measured decision as to which is most appropriate for your circumstances.
Secured loans will generally offer larger amounts to borrow and, because they have collateral – which could also include personal belongings such as valuable jewellery or artworks – you may benefit from a lower interest rate than if your loan was unsecured. Longer repayment times can also be beneficial.
If you fail to pay off the loan, for whatever reason, and you don't adhere to the loan's terms and conditions, the lender is entitled to the asset you have put up as collateral and could sell it to pay off your debt.
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.
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.
A bad credit personal loan is ‘unsecured’ when the borrower doesn’t offer up an asset (such as a car or jewellery) as collateral or security. Lenders charge higher interest rates on unsecured loans than secured loans.
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.
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.
While some personal loans can be secured by the value of an asset, such as a car or equity in a property, student personal loans are often unsecured, with higher interest rates.
Some lenders also offer guarantor personal loans to students. These loans have lower interest rates, as a guarantor (usually a relative of the borrower with good credit) will guarantee the loan, taking on the financial responsibility if the borrower defaults.
Many personal loans, much like home 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.
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 several 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.
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:
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.
