Business Daily.
.
The Property Pack
A+ R A-

Personal loans and the things you maybe didn't know




There are many reasons why people use Businesses.com.au for their breadth of knowledge on what’s happening in the world of commerce. It’s broad focus from providing financial life hacks, to travel, food and beyond.

In more challenging times, we need to be more cognisant of our options for finance than ever before.  This includes shorter term credit, and here are some key pointers on what you need to know.

A personal loan comes as an unsecured or secured option. Either it's not guaranteed with a house, car, or other collateral, or it is. Unsecured loans have a higher rate of interest than secured loans, but not as high as credit card borrowing. For example, if you had to choose between a personal loan, credit card cash advance or secured loan, the unsecured would have the median interest rate. The cash advance would be the highest and the secured variety being the highest.

A big reason to choose a personal loan over a credit card loan is that you’ll pay less interest and have a longer period of time to pay it back. The reason to choose an unsecured loan over a secured, is you are not issuing collateral for the credit. However, you will pay more interest. These are important considerations that should not be overlooked when comparing. Trying to figure out what’s best for you and the current situation.

Things to mindful of:

*  Any application for credit will show up on your credit file for up to one year, regardless if it’s successful or not.

*  If you have good credit, lenders will see you as less risk, so you will likely be offered a higher loan amount with a lower interest rate. Sounds good, right? Just be careful that you don’t borrow more than you initially had in mind, as this is a waste of money if not put to good use.

*  Usually interest rates are fixed for personal loans, making it easier to calculate the overall cost of your loan.

*  Repayments will be set to a fixed amount, which means you can budget much more easily for the same amount debited each month.

*  APR is the amount of interest you’ll be paying the creditor over the course of a year (Annual Percentage Rate). This is what you see in adverts, or on lender websites. Whilst by law, lenders must offer those advertised rates to borrowers, the reality is they will be higher than initially advertised. They only need to offer that rate to qualified borrowers, which unfortunately means unless you have outstanding credit, you’re unlikely qualify for that rate.  

*  Always double check the fine print of your loan offer to make sure you are not paying any arrangement fees. These result in the overall cost of your loan being greater than anticipated. Hence why checking the APR rate is crucial in addition to the advertised rates.

*  Last but not least, a personal loan can be cancelled after you sign the agreement and receive the funds. In most cases, 14 days from signature. During this period, you can elect to cancel your loan. You then have 30 days to repay the loan and any interest accrued during that time frame. It’s never too late if you change your mind.   
Business Daily Media