Types of Personal Loans and How to Get One

If you’re looking for a personal loan right now, there are many lenders out there you can trust. The problem is what kind of personal loan you should apply for.

Many loans can cater to different situations. That’s why you should know which type best suits your needs. 

In this article, we’ll talk about the different types of personal loans and how to apply for one. 

What this article covers:

• Types of Personal Loans in Australia
• How to Apply for a Personal Loan

Types of Personal Loans in Australia

If you’re looking for a personal loan fast, there are many you can search for online. However, they’re usually categorised into the following:

Secured Personal Loans

These require collateral; lenders want assurance that they’ll get something from you if you default on the loan.

Secured personal loans are popular with those looking for personal loans for bad credit. They usually get easy approval since the lender won’t look at your credit standing only. They’ll more likely take into consideration your collateral attachment.

However, you can’t just attach any kind of collateral. Lenders who offer personal secured loans for bad credit have their criteria as to what kinds they accept. 

Loan banks or online lenders either have an in-house team or hire a third party to investigate your collateral, who’ll look into its condition and value. 

Also, you can’t just borrow any amount from a direct personal loan that’s over your collateral’s value. That’s why they’ll have someone to investigate it so that they’ll know how much is your borrowing threshold.

Unsecured Personal Loans

Unlike secured loans, these don’t require collateral. However, lenders with fast-approval personal loans online will look into your credit standing so that they’ll know whether you can repay what you owe them.

Some lenders for personal loans don’t solely focus on your credit standing. They’ll add into consideration your salary. Most might only consider those with an annual salary of more than $30,000. 

However, there are cheap loans you can apply for that are unsecured and lenient with how much you earn. Still, they’ll consider your credit standing. 

Debt-Consolidation Loans

These are perfect for those who are looking for a personal loan to consolidate debt. You can either get debt-consolidation personal loans from a bank or an online lender.

Technically, lenders will combine your two personal loans or more into one easy instalment.

They may contact your existing lenders and pay them directly or disburse the proceeds to your bank account for you to repay them manually. 

How to Apply for a Personal Loan

Now, let’s see how you can get a personal loan. 

1. Check Your Credit or Collateral

Check your credit if you’re looking into applying for unsecured loans. You can apply for an instant personal loan with good credit. 

Remember, anything above 661 points out of 1,200 is generally considered good. Your credit score should be over 853 points if you want guaranteed approval. 

You might even qualify for a 5-year unsecured personal loan with exceptional credit standing.

If you’re looking for secured loans, ensure that your collateral’s value equals the amount you want and is in good condition.

2. Calculate Loan Amount and Interest

Before you apply for personal loans online, ensure that you know how much you’ll borrow. This way, you can check how much interest will be added to your loan once it matures. 

Look for easy personal loans with fixed rates. Lenders will send you an agreement showing your loan’s monthly interest rate, making it easier to calculate the total amount. 

Don’t forget to double-check for hidden fees. Some lenders will only state them in the loan contract, and you might be surprised once you pay your first due. 

3. Seek a Credible Lender

Seek a personal loan online that has an AFS license. You may also need to search for their names on the ASIC Connect website.

Try exploring the lender’s website for certifications as well. These will tell you how they’ve performed as a lender in the industry. 

You may look for reviews about them online, too. They can give you insights, like if they can offer you quick online personal loans. 

Remember, you may rely on loan finders, such as Orange Loans, to save you from this hassle. They can match you up with lenders with guaranteed personal loan online approval.

4. Submit Your Application

Once you’re satisfied with the lender of your choice, gather their requirements and start filling out their online form.

Most small personal loans in Australia have forms that won’t take long to fill out. Still, allot at least 30 minutes for it. 

Double-check all you’ve encoded before submitting your application. 

5. Wait for Approval and Disbursement

Once lenders approve your loan application, they can disburse the proceeds immediately. 

Often, it’ll only take 5-10 minutes after approval. A loan from a bank might take 1-3 business days.

Conclusion

If you’re seeking an Aussie personal loan, ensure you know what types are available to identify which one best suits your needs. Afterward, you may start seeking credible lenders and collecting the requirements for your loan application.