There can be many times in life when you need some extra cash. A personal loan is a way to borrow money when you need it and pay it back over time, allowing you to pay for something sooner and avoid delays.
A personal loan can have advantages over credit cards, including a higher borrowing amount and lower interest and fees, but taking on any form of debt is a decision that needs to be made carefully. A loan advisor could help you to understand your options and help you find the best personal loan for your needs.
Your eligibility for a personal loan will depend on your circumstances and credit history as well as the intended purpose of the loan. Here are 10 common reasons to apply for a personal loan in Australia and some of the different types of loans available.
A car is a necessity for many Australians, but also an expensive purchase. A car loan can help you to buy the new or used car you want, without having to settle for a lower quality vehicle that could develop problems sooner or prove more expensive to maintain in the long run.
Most new car loans are secured, meaning the vehicle itself is used as security for the loan term. If you can’t make your repayments on time, the lender can repossess the vehicle to help cover some of their losses. Used car loans are often unsecured due to the depreciation of the vehicle. Speaking with an experienced personal loan lending specialist will help give clarity as to what options may suite you best for your car loan.
If you need a break or have plans to visit family or attend special events overseas, there might not always be time to save up first. You might also find yourself having time off work at short notice and want to make the most of the opportunity.
A travel loan or holiday loan could provide the funds you need to cover your flights, accommodation and other expenses involved in the trip, as long as you budget carefully and are confident you can pay back the loan after your return. Repayments can be made more affordable by stretching the loan term out for a longer period of time.
If you want your big day to be memorable, the costs involved in a wedding can quickly add up. A wedding loan could offer a helping hand, so you don’t have to compromise on your special day or postpone the event until you can afford it.
A personal loan could also help you afford the engagement ring you want at short notice for a spontaneous proposal.
A personal loan won’t cover the cost of buying a home, for which you’ll need a dedicated home loan or mortgage. But if you’re planning on making some improvements, a renovation loan could provide the funds you need to enhance your property and add to its value.
A personal loan can cover most types of home improvements, from minor repairs and repainting to major projects such as kitchen and bathroom renovations and building an extension. Ask your builders what’s included in their quote so you can be sure you’re getting an accurate cost for the job. In some cases, you’ll be able to bundle your personal loan into a home loan refinance later down the track. There are plenty or refinancing opportunities available once your loan has been held for a minimum of 12 months.
If you’re furnishing your first home or replacing old furniture, a personal loan could give you the funds you need to buy comfortable, stylish and supportive furniture that suits your home.
A single loan and repayment can also be more convenient than arranging separate payment plans with multiple furniture stores and may offer more flexible repayment terms designed for your circumstances.
If you’ve dreamed of having your own backyard pool, a personal loan for a pool could give you the funds to choose the type of pool you want and have it installed ready for the warm weather, rather than having to settle for what you can afford now.
You should also keep in mind the cost of pool maintenance across the year when choosing a repayment plan you can comfortably afford. As mentioned above, the opportunity to bundle a pool loan or personal loan into a refinance will present itself after you have held the loan for a minimum of 12 months.
Starting a business could be the first step to a better financial future, but most businesses require capital upfront to get started. A small business loan is an investment in your business that can help you to hit your targets sooner and start paying off the loan with the profits you make.
Your loan advisor can discuss the different types of business finance and whether a personal loan, line of credit or other option would be the best fit for you.
Installing solar panels on your roof or by your pool is a long-term investment that could help you to save significantly on your energy bills by generating your own free electricity or heating.
A personal loan for solar panels or other renewable energy systems can help you to reduce your carbon footprint and start enjoying their benefits sooner.
You never know what’s around the corner, and a personal loan can be a financial lifeline if you need urgent funds to cover a medical bill, replace a broken appliance or other emergencies.
A personal loan may not be an option if you expect to have ongoing financial difficulties, as you may not be able to keep up with the repayments and would face penalties, making your situation worse. A financial advisor can help you to understand your options and any support you may be entitled to.
If you’re already borrowing money in the form of loans or credit cards, a debt consolidation loan that rolls multiple debts into one could be a way to simplify your finances or reduce the cost of borrowing.
Depending on your circumstances, debt consolidation could save money on interest payments and other fees or could make budgeting easier, with only one monthly repayment to think about.
Your personal loan advisor can discuss the pros and cons of debt consolidation and whether it’s a good choice for you.
If you’re interested in applying for a personal loan in Australia, our lending specialists can help you to get pre-approved for the amount you need and tailor the best possible loan from our panel of lenders. Give us a call on 1300 665 906, or have us call you.
Nathan joined Fox Finance Group in 2018 to help drive the strategic growth of the business and also help build on the solid foundations that have held strong in the business since 2006.