Whether it’s because the drive is too long, you’re not physically able to get to the destination, or because you can’t find the time between all the duties you have to juggle, phone loans are the ideal solution to an otherwise tedious and exhausting process.
Continue reading to find how they differ from other types of engagement ring loans Australia and how they make the process easier.
What Is a Phone Loan?
A phone loan is an ideal alternative for those who want to avoid going to take out the loan in-person and for those who don’t like online applications on the internet.
Whether it’s because you need more help with the application process, want to ask more questions, or have technical problems, a phone loan is definitely a life-saver and a much easier choice.
What Are the Advantages of Phone Loans?
Sometimes, you just want someone that understands the nitty-gritty and that can briefly tell you all the information you need to learn about the pool loan you’re taking out, instead of sifting endless documents and pages. That’s exactly what you get when you call the lender instead of doing an online application.
Not to mention, a lot of lenders have 24/7 customer service, which means that you can apply for the loan types in Australia at any time of the day and not necessarily during working hours. This makes phone loans the first type to come to mind whenever there’s an emergency, which they’re ideal for.
How Are Phone Loans Different from Other Methods?
The application process is the only distinction between one method and the next, as it’s carried out over the phone.
However, everything else, including terms and conditions, fees and charges, term loans, and allowed loan amounts, depend on the lending entity itself and not the method through which you apply for the loan.
This means that you can apply for a home loan, hardship loan, Aussie bike loans, student loan, or any type of personal loan by simply calling the lender.
How to Choose a Loan?
When you’re browsing through the various lenders, you can decide between them more easily by considering the following most important factors:
The Annual Percentage Rate
Annual percentage rates (APRs) help you turn the comparison from apples to oranges into apples to apples. In other words, they’re the easiest way to compare objectively between one loan and another.
The APR is the percent that lenders use to calculate the interest rate that will be imposed on you, which inevitably increases with the increase of your borrowed amount.
However, having a good credit score and credible credit history definitely helps to keep the APR in check, so make sure you fix your credit score up before applying for a loan.
So, for example, if the APR is 5% and you take out a loan of $1,000, your interest will be $50. This is why you should opt for the smallest APR you can find, as long as the other variables (term, charges, and fees) are the same.
Fixed and Variable Rates
Whether the interest rate is fixed or variable (floating) plays a massive role in the repayment process. With fixed interest rates, you’ll be able to draw out a plan for how you manage your finances for as long as the loan duration lasts, which makes them ideal for those who like to play it safe and plan ahead.
On the other hand, a variable interest rate will give you room to pay less if you expect the interest rate to decrease.
However, there’s still the risk of the rate going up, which would result in higher interest amounts imposed on you monthly. So, if you’re going to opt for variable rates, make sure you have some money in your savings to cover any unexpected surges.
Term of the Loan
The longer your loan term is, the more interest will accumulate, and the higher the cost of your loan for breast implants would be. That’s why it’s always better to opt for the shortest loan term you can afford without causing a massive surge in your debt-to-income ratio.
Generally speaking, you want to keep that ratio below the 40% mark in order to be able to cover your other expenses while repaying your loan’s monthly instalments on time and in full.
Fees and Charges
Every loan comes with some associated charges and fees, which can add up to the total cost of the loan. There’s a standard establishment fee of 4%, an application fee to simply approve the loan, a processing fee to cover the administrative procedures, an origination fee to secure the truck loan for bad credit australia, a late fee that’s imposed if you miss a deadline, and a prepayment fee that you have to pay if you pay the loan off earlier than expected.
The latter exists to cover the lender’s plans in the case that you pay your loan off before the expected loan term, which means that they won’t be benefiting from your monthly interest anymore. So, it’s a means of securing themselves against this change of plans.
Secured and Unsecured Loans
A secured loan necessitates that you provide collateral, which is a means of guaranteeing the lender that they’ll be getting their money back through liquidating your assets (collateral) in the case that you default or are unable to repay the wedding loan in full.
The collateral you provide can be your home, vehicle, stocks, or any other asset that the lender can sell for the equivalent amount of the loan.
Secured loans for medical expenses are definitely safer for the lender and provide the borrower with a much lower interest rate.
On the other hand, an unsecured loan doesn’t require the borrower to provide collateral, which makes them riskier for the lender, and that’s why their interest rates are much higher. This is especially true if the lender doesn’t ask for the borrower’s credit score or credit history, which can increase the interest rate up to 38%.
Tip: Beware when dealing with lenders that don’t seem to care about your credit score and history, which are important indicators of whether you’ll be able to pay the loan back or not.
If the lender doesn’t care about your ability to repay unsecured same day weekend loans, they’re probably a loan shark that’s hoping to gain more from you with the accumulated interest and late fees imposed when you don’t pay the loan back.
Speed of Access to Funds
One of the biggest advantages to phone loans is the fact that they provide faster access to funds, which can take between 1 to 2 days, especially if you’re applying for an unsecured loan.
Phone loans are no different from in-person or online solar loans regarding what taking a loan out entails and the legal procedures.
However, they’re much more convenient and can be done more easily. If you’re looking for a way to avoid going down to the bank, credit union, or financial institute yourself or being confused with online applications, a phone loan would be a great alternative.