Personal Loans Sydney

There are generally three main factors to consider when taking out a personal loan: the interest rate, the fees, and the loan features. We’ll go into each one in a little more detail here:

• Interest rate: The interest rate will determine the amount of interest you’ll pay for every dollar you borrow. So, if you borrow $100 and your interest rate is 10%, you’ll need to pay back $110. With personal loans, you’ll need to choose between either a variable or a fixed interest rate (more on this below).

• Fees: Personal loans can come with a range of different fees. Some of the fees are upfront fees, like application fees, while others are ongoing, like monthly service fees. Some loans charge fees if you miss a repayment or decide to terminate your loan before the term ends.

• Loan features: Some features to look for in a personal loan are flexible repayment options (usually a choice between weekly, fortnightly or monthly repayments), the ability to make extra repayments or a redraw facility. The key with loan features is that you only want to pay for the ones you’ll use. No point in paying a higher interest rate for a loan that comes with an extra repayment facility if you’re never going to use it.

TOP COMPARISON TIP: When comparing personal loans, if you want to check how much a loan charges in fees, be sure to check the loan’s ‘comparison rate’. The comparison rate takes the interest rate plus any fees, giving you the true cost of the loan.

One of the big decisions to make when taking out a personal loan is whether you want a fixed or variable interest rate. Fixed rates are generally higher than variable rates because the lender is affording you the certainty of knowing exactly how much interest you’ll pay over the life of the loan. 

While you can usually snag a lower variable interest rate, there’s a chance it could increase at some point during your loan, like if funding costs go up, for example. This would mean your personal loan could end up costing you more than anticipated. 

There are pros and cons to both options – it all depends on which option is best for your individual financial situation.

That’s the million-dollar question because your repayments will depend on your interest rate, loan term and repayment frequency. 

Luckily for you, Mozo’s personal loan repayments calculator can give you a good idea of whether or not you’ll be able to meet your weekly, fortnightly or monthly repayments based on the loan amount, term and interest rate you’re able to secure. Here’s how it works.

SCENARIO:

Sally wants to escape Sydney for a few months and is setting off for a few relaxing weeks in Southeast Asia. The trip will cost her $2,500. 

After some research into the market, Sally has found a personal loan with an advertised interest rate of 8.50% p.a. that she plans on paying for three years. 

Using our personal loan repayments calculator, Sally finds out she’ll have to contribute $79 a month to her repayments, amounting to $341 in interest over the three years.

Yes, personal loans can be used for renovations or property upgrades like landscaping, painting, or even updating a 70s Sydney kitchen. If you’ve already got a home loan, however, you might want to consider refinancing as a finance option, especially if you are looking to borrow a large amount.

In fact, if that’s the reason you’re in the market for some finance, why not read up on all things home renovation loans using our fact-filled guide.

If you live in Sydney (or anywhere in Australia, for that matter), you’ll generally have a lot of choice in terms of personal loan options. Personal loan lenders typically fall into three main categories:

• Big banks: Think NAB, Commonwealth Bank or Westpac, as well as some of the global players like Citi and HSBC. Throughout Sydney, you’ll be able to visit a local Big Bank branch to get a loan or apply online. Loans from the big banks won’t be the cheapest on the market, but they can have competitive choices. Another benefit of a big bank is that if you need to borrow a larger amount of money, they usually have higher loan limits than some of the smaller lenders in our database.

• Customer-owned banks and credit unions: These lenders generally have competitive loans in the market because, unlike the bigger banks, they put their profits back into delivering low-rate products for their customers.

• Peer-to-peer lenders: The new kids on the block in the Australian personal loan market are peer-to-peer players like Harmoney, Ratesetter, and Society One. These lenders tend to have different rate tiers depending on your credit rating, so the better your credit history, the better your interest rate will be.

Unfortunately, there is no surefire way to be certain a personal loan provider will give your application the all-clear once you hit send. But in saying that, there are a few steps to take beforehand to help give you the best possible chance of securing your funds quickly.

• Check your credit history: Before you apply for a personal loan, it’s a good idea to check your credit file to ensure everything is correct and up-to-date.

• Demonstrate good financial habits: In the months leading up to your loan application, it’s a good idea to make sure that you can demonstrate to a lender that you’ll be able to meet the regular loan repayments. Start putting some extra money away into a savings account equal to the amount of money you’re looking to borrow, and always be sure to pay any utility bill on time and in full.   

• Set a borrowing limit and stick to it: While your bank may be willing to loan you $20,000 for a new deck for your Sydney home, if you only need to borrow $10,000, stick to this amount.

Applying for personal loans nowadays can be fairly quick and easy. While you can choose to visit a local Sydney branch of your chosen bank, you’ve also got the option of doing your application online. If you opt for a peer-to-peer lender, you’ll generally only be able to submit your application online as they typically don’t have physical branches around Sydney like other banks.

When you apply for any loan, you’ll generally need to provide the following info:

• Proof of identity: Your passport or NSW driver's license.

• Proof of income: Pay slips.

• Other financial details: Assets, debts and expenses.

Personal loan providers operate all over the country, so no matter where you live, you should have access to a personal loan lender to help fund any upcoming expenses (so long as you’re eligible). 

Here at Mozo, we compare loans all around Australia, but if you want to do a city-based search, you can also check out our Melbourne and Perth loan pages.