In life, there is always something that needs financing. Some you can handle on your own but for others you may need some financial assistance to get what you want. Luckily, there are a variety of financial products available in the Australian market that can help you purchase what you need to make your dreams come true. In this article, we will be discussing one of the many financial options known as a personal loan and what you can use it for.
A personal loan is a financing option where an individual borrows an agreed amount from a personal loan lender to finance various personal expenses such as debt consolidation, financing a wedding or holiday, purchasing a car, home renovation expenses, medical bills etc. Personal loans can be offered by banks, credit unions or online lenders. Just like any other loan, you have to repay the loan with interest over a fixed term usually between one and seven years. Some lenders may also charge you a fee for personal loans. Before you apply for a personal loan, find out what you may or may not be able to take finance with your loan. Personal loans can also come with either fixed or variable interest rates.
When taking out a personal loan, you have two options. You can either go for a Secured or Unsecured personal loan. Whichever one you choose depends on your individual circumstances.
A Secured Personal Loan is a loan that requires an asset for security. For this, you can use an item that you currently own or you could use the asset you intend to purchase with the loan as security. It all depends on you. The most common type of Secured Personal Loan is a car loan and with car loans, you use the vehicle you want to purchase as security. Just like we mentioned above, you can also take out a secured personal loan for other purposes such as paying for a wedding, holidays, home improvement or renovations and purchasing new appliances. Note that your asset should be greater or equal to the value of the loan amount. Also the value of your asset determines the amount you can borrow plus Lenders may have requirements on the age and condition of the asset.
An Unsecured Personal Loan is a loan that you take out either from a bank or a lender to pay for a huge expense. For this loan, you don’t have to provide a personal asset like your car or house as security. Now because the lender doesn’t have an asset that acts as security, this means the risk is higher and when the risk is higher the interest rates are high as well. You can use an Unsecured Personal Loan for various purposes such as paying for a wedding, going on holiday, purchasing a car, home renovations or even cosmetic surgery. You could also use this financing option to pay off your existing debt and/or consolidate other higher interest debts
It is important to find out how this kind of loan will be beneficial to you in the case you apply for it. Some of the benefits include;
When you are ready to begin the application process, the team at Braid Finance will compare the different loan options available on your behalf. Some of the loan features to be on the lookout for include;
Read more: Pre-Approved Car Loans: How Does It Work?