In Australia, a myriad of instant cash loans are available for different purposes – from unsecured little loans for unemployed up to lines of credits for full-time employees. Apply for a loan with the best loan company, Perfect Payday.
Whether you need the financial loan for personal purposes or everyday needs like travelling or emergency bills or instead, funding for your next startup or housing purchase, the available options empower you to achieve your goals now and pay later.
Below, we’ll discuss some of the common loan options in Australia as well as questions that are worth inquiring about before deciding to apply for loans.
Do You Really Need a Loan Today?
Before you borrow a private finance loan Australia, you need to lay out your options. First, do your research on the available loans, the eligibility criteria, the different rates, and take notes.
Then, you need to take the time to sit down with yourself and see how you’re going to manage the loan money’s instalments. If you’ve ever considered an independent financial counsellor, now’s the time to seek their consultation.
Also, the government’s MoneySmart website is ideal for showcasing how loan amounts work; better yet, it can offer you alternatives on how to reduce your debt and plan for the future.
Finally, if you feel like the instalments won’t be easily managed, try working out other ways to receive the money – maybe through Centrelink advancements, payment plans, and more.
Common Types of Loans Australia (by Amount)
Small Loans/Payday Loans
Small loans are personal loans that people take out for the smaller aspects of life, like a fun trip or a cherished gift for a loved one. Referred to as easy personal loans, the loan amounts in this category fluctuate between $500-$2,000.
Moreover, these loans are usually short-term loans and paid back in an average of 6-12 months.
Medium personal loans are intended for larger purchases than small loans, ranging anywhere from $2,001-$5,000.
Since their amounts are larger than those of small loans, their terms are usually between 12-24 months. Moreover, since the higher the risk, the higher the interest, medium loans could have an interest of anywhere between 24-48% annually.
However, while small loans can be charged monthly service fees, medium loans, fortunately, aren’t in most cases!
As their name implies, large personal loans are those for the unexpected events that rush into all our lives. When you’re confronted with an unexpected expense, you can resort to a large loan for amounts between $5,100 and $10,000 (that amount could reach $100,000, depending on the loan’s purpose).
With terms extending beyond those of medium loans, large loans can be paid back over 12-36 months. Moreover, to not complicate your situation, large loans are charged more or less the same interest of medium loans (24-48% annually). Similarly, you don’t get charged a monthly service fee.
Note: As the loan amount increases, so do your loan terms. For substantial loans, the length of your loan can extend to 60 months.
Regardless of loan Australia options, all online loans fall under two categories or types: secured or unsecured loans.
With secured loans overnight, you provide an asset as collateral for the loan to guarantee the creditor that you’ll pay the loan amount back in full. If you default, the creditor has the right to claim over the asset in return for the debt. Here are some of the standard secured types of mortgage loans options:
- Credit cards
- Lines of credit
- Mortgage loans
- Vehicle loans
- Life insurance loans
- Bad credit loans
Mostly, banks or financial institutions request collateral for large loans or when your credit score doesn’t qualify you for an unsecured loan. On the bright side, secured loans guarantee you lower interest rates, since lenders’ risk isn’t high.
In contrast, unsecured loans are those that don’t require collateral. Rather than depending on your assets as a guarantee, lenders approve your loan because of your good credit score. Typical unsecured loans include:
- Unsecured credit cards
- Student education loans
- Personal loans
Since unsecured loans pose a higher risk for lenders, they require high credit scores to get approved. Also, if you default, the lender has the right to commission a collection agency to collect the loan amount. In extreme cases, they may also file a lawsuit and take you to court.
If you have insufficient credit, you could provide a cosigner, someone who takes on the obligation to fulfil your debt if you default. However, do expect a much higher interest rate.
Am I Eligible?
To be eligible for an Australia loan, you need to meet the following criteria:
- Be 18 years or older
- Have permanent residency in Australia or carry the Australian citizenship
- Provide proof of a stable source of income
- Have a high credit score
Online Loan, Apply Now
If you’ve settled on applying for a loan, you don’t have to visit a bank branch. You can now apply for a personal loan online! Here’s how:
1. Fill Out an Online Application
Coming in the form of simple online forms, loan applications are very straightforward. Like handwritten ones, you determine the kind of loan you’re seeking, the amount you’re looking to borrow, the loan purpose, and your desired loan term. Some applications also ask you to specify the repayment frequency (weekly, every fortnight, monthly).
You can also attach documents and proof for any statements you make, including payslips, bank statements, ID, driver’s license number, Centrelink support details, and more.
Tip: If you’re applying to several loans at once with different places, make sure you do so in two weeks to a month at most. That’s to ensure that when institutions check your account, each time they do so won’t count on its own – instead, they’ll all count as one, so they won’t harm your credit score.
2. Receiving the Loan Offer
Upon receiving your application, financial institutions like PerfectPayDay review it and communicate with you to let you know whether your application was accepted or rejected. In case it was approved, you’ll receive the details of your offer, and it’s up to you to either accept its terms or seek another option.
3. Get the Cash!
If you choose to accept the loan offer, you provide the necessary signatures and documentation, and in a matter of days, the loan amount will be transferred directly to your account.
On that note, if you receive the offer during the day and respond with your approval before the end of the working day (3 PM), your chances of receiving the amount on the same day are pretty high!
Loan options in Australia are quite diverse, catering to almost everyone! Before you apply, one final tip is to use an online calculator to determine the loan amount you can borrow with an interest rate you’ll be able to manage. Plus, make sure you tick the eligibility requirements to ensure securing the loan!