Personal Loans Perth

Depending on the project you’re wanting to fund, a big or small personal loan could provide a cash injection of anywhere from thousands to tens of thousands of dollars. Typically, borrowers in Perth and Western Australia use personal loans to help fund things like overseas holidays, home renovations, weddings, car purchases and even cosmetic surgery procedures!

Like any type of loan, there are a number of factors that will go into the amount you’ll be able to borrow though. These include:

• Your income and savings
• Any debt you may have
• Your credit score

But just because you have the means to take out a personal loan doesn't mean you should jump at the first option you see. It’s important to seriously weigh up the benefits and drawbacks of a personal loan before you make an application, including your capacity to pay it back and whether or not there are alternative borrowing options for your own situation.

There sure are! Personal loans generally fall into three categories: secured, unsecured and debt consolidation.

Secured Loan: Secured personal loans tend to come with lower interest rates and fees than unsecured loans, but the trade off is that you’ll need to provide some sort of asset in order to secure the loan. This could be something like your car or your house.

Unsecured Loan: On the other hand, unsecured personal loans are more likely to come with higher interest rates but without the need for any security - making them a more attractive option for borrowers without assets.

Debt Consolidation Loan: A bit different from the other two types of personal loan which you’d typically use to fund holidays or some renovations, a debt consolidation loan does just that - it allows you to merge debt from any other personal loans or credit cards you may have into the one loan, with a better rate to boot!

While each of the above will appeal to different types of personal loan borrowers in Perth, one thing that’s always worth comparing, no matter which type of loan you need, is the interest rate.

Here’s an example using the Mozo personal loan comparison calculator which demonstrates just how much money you could save by comparing personal loans with different rates:

Pete and Laura have been saving up for a major kitchen renovation on their home in Fremantle, but have decided that they need a bit of extra help in terms of funding. Because the couple are able to secure their home against the loan, they’re looking at taking out a secured personal loan for their home renovation to the tune of $20,000.

If the couple decided to opt for a personal loan with a typical interest rate of 8.50% over a four year term, they would need to make monthly of $493 and would end up paying $3,662 in total interest over that period.

However, if they opted for a personal loan with a lower rate of 6.00% instead, they would need to make monthly payments of $470 and would end up paying $2,546 in total interest - a considerable $1,116 less!

Whether you’re looking for a personal loan deal in Perth, Sydney or even Melbourne, aside from the interest rate itself, there are a number of other features that are worth comparing before you lock down a loan deal.

Fees

While there are fee-free offerings on the market, it’s not uncommon for a personal loan to come with a number of fees attached. Like the interest rate, comparing loans and looking for low fee options is always a good idea to help cut down the amount you pay.

Upfront fees: An upfront fee is the fee charged (you guessed it) when you apply for the loan. These generally range between $0 and $500 depending on the loan.

Ongoing fees: An ongoing fee is essentially a service fee, usually charged on a monthly basis, and typically ranging from $0 to $10. While this may seem a small amount compared to a monthly fee, they can add up quickly over the life of a loan.  

Late payment fees: These are charged in the event that you don’t make a repayment by the due date, and are generally a flat fee of around $30.

Early repayment fee: Also known as a break cost fee, this is a cost you may be charged if you choose to pay off your loan early - although not all personal loan lenders will charge a fee in this case.  

Type of interest rate

Another consideration to make when choosing a loan is the type of interest rate.  

Fixed rate: The interest rate on a fixed personal loan will stay the same for the life of the loan, making it a good option for any borrowers looking for stability and certainty with their regular repayments.

Variable rate: On the flip side, variable rate personal loans can move up or down at any time. This can be great if you end up paying a lower rate than you started with, but if rates move up you should be prepared for a greater hit on your wallet.  

Repayment options

Interested in a bit of flexibility when it comes to paying off your personal loan? Well one of the following repayment features may be worth looking at:

Extra repayments: While a low interest rate and lower fees are useful features to help cut down your overall costs, another way to reduce the amount you pay is by making use of free extra repayments. Many loans will come with the option of making extra repayments, but just watch out for any fees associated with them!   

Repayment frequency: Do you get paid on a monthly basis? Then a loan with flexible repayment frequency which can help you line up your repayments with your salary may be your best bet. Typically you’ll be able to choose between weekly, fortnightly or monthly repayment options.

Redraw facility: Say that you do end up making extra repayments on your personal loan, you’ll be able to dip into those extra repayments if your loan comes with a redraw facility.

Loan term

Generally the period of time you’ll be able to take out a personal loan over stretches between one and seven years. And while it may seem tempting to opt for a loan with a longer term to avoid having to make higher monthly repayments, just bear in mind that the interest you’ll pay is likely to add up over those extra years.

You’re probably already familiar with names like Bankwest and major banks like NAB or ANZ, but when it comes to taking out a personal loan in Perth there are also a heap of others lenders at your disposal. Some of the different types of lenders you’ll be able to choose between include:

Major banks: Like doing your banking with a familiar face? Well good news, because there are plenty of competitive personal loan rates on offer from the major banks including the likes of ANZ, Westpac, NAB and the Commonwealth Bank.

Peer to peer lenders: Because they are run online and source their funding from everyday investors, peer to peer lenders are often able to offer some of the most competitive rates for their personal loans. They also reward borrowers with great credit history, meaning you might be able to snag an even better deal.

Online lenders: If you’d rather find and apply for a personal loan from the comfort of your home, an online personal loan provider may be the match for you. Plus with lower overheads, they are often able to offer great rates for borrowers.

You sure can! Refinancing your personal loan to a deal to a lower rate could be a great way to reduce your monthly repayments and the amount of interest you pay, especially if you still have a few years to run on the loan.

Interested in knowing how much you could be saving? A great place to start is by plugging your current loan amount, monthly repayments, provider, state and type of loan into the Mozo Personal Loan Switch and Save Calculator which will then be able to show you just how much you could save by making the switch to a better value deal. 

While personal loans can be one of the best funding options for anything from your dream wedding in Perth to purchasing a new or used car, they’re not always going to be the best value option or most convenient way to pay.  

For example, if you’re making extensive renovations to a property in Perth it may be worth considering redrawing any extra payments you’ve made on your home loan or even using your home’s equity to finance the renovations, rather than taking out an entirely new loan. The same goes for smaller purchases, where cash (ideally) or even a credit card may be a more convenient way to pay. 

Whether this is the first time you’re applying for a personal loan or the fiftieth (well, probably not that many), there are always steps you can take to improve your chances of approval:

1. Meet the criteria: It sounds simple, but most personal loan providers will have minimum requirements you’ll need to meet in order to be approved. These include being 18 years old, having Australian citizenship or holding permanent residency, being employed or receiving a regular income and meeting any minimum income requirements.
2. Have a positive record: Your history of saving and level of debt are both factors personal loan providers may consider when assessing you for a loan, and they’ll certainly look at your credit history as a borrower. So the more you can do to demonstrate a positive savings record and an ability to pay off debt, the better.
3. Apply for the right amount: There’s little point in applying for a personal loan which you’re not going to be able to finance, because your bank is very likely to reject your application. A good way to judge how much you’ll be able to pay back, and therefore borrow, is by plugging in your desired loan amount and term into the Mozo personal loan repayment calculator. You’ll be able to adjust the interest rate to show you just how much you’ll need to make in terms of repayments, and therefore how much you can afford!