Unsecured Personal Loan

Unsecured Personal Loan

Unsecured Personal Loan

If you are after a personal loan for something that is not physically an item, an unsecured personal loan could be the type of personal loan you are looking for.

 

What is an Unsecured Personal Loan?


Unsecured loans are where the personal loan lender agrees to advance their money to the customer for the loan purpose but does not take security over the item.

Because of the greater risk for a lender, the interest rate is going to be generally higher than a secured personal loan, and the customers profile will need to be stronger, especially with regards to the borrowers credit rating; refer to the 6 C of credit assessment at www.mycreditfilereport.com.au.

Unsecured personal loan options have a longer term than secured loans, and can be taken over a 7 year period, where as for secured lending the loan term has a maximum of 5 years, making the repayment amount less.

It may be useful to use a personal loan repayment calculator below to calculate what the repayments will be for an amount you are seeking.

It is worth noting that personal loan lenders Australia wide will lend money, subject to their own individual lending criteria for any worthwhile purpose.
Below is a list of purposes most people take out an unsecured loan for:

  • Unsecured loan for a holiday
  • Unsecured loan for debt consolidation (combining several loans or credit cards into 1 loan)
  • Unsecured loan for home renovations
  • Unsecured loan for a wedding

Remember affordability is an area that unsecured personal loan lenders look at very closely, so you must be employed to apply, and you must have a good credit rating.

Unsecured personal loans are offered by a variety of different lenders, and it’s worth remembering that an approval will mainly depend on your credit history, and whether you meet the personal loan lenders affordability guidelines.

 

Personal Loan Lenders Australia

Compare personal loan lenders, and the different unsecured loan purposes including debt consolidation loans to find the best unsecured personal loan for you, then use a personal loan calculator to see what the repayments will be.

  • Payday or Cash Advance Lenders
  • Finance Companies
  • Credit Unions and Building Societies
  • Banks

Payday or Cash Advance personal loan lenders primarily look after people requiring a small personal loan, typically in the range of $1500 dollars. The interest rates are generally the highest of all the personal loan lenders Australia has.

Finance Companies fall into the category of personal loan lenders with their personal loan product, and offer personal loan options to people with a, less than perfect credit rating.

Credit Unions and Building Societies are one of the most popular personal loan lenders in Australia, and you don’t have to be a member to obtain an unsecured personal loan from them. There are many credit union branches scattered through out Australia, so finding one close to you is never a problem.

Banks are the traditional personal loan lenders in Australia, and if you regularly have your pay go into a savings account with a bank, this could be a good place to apply for a personal unsecured loan.

You will notice that personal loan lenders Australia wide may charge a higher rate of interest on their unsecured personal loan products if you decide to take the loan out for a short period of time, so it’s often better to have the personal loan drawn up for the longest term possible, but make extra loan repayment amounts so you pay the loan off faster, which will save you money monthly in interest.

Credit cards are effectively unsecured personal loans; the lender allows you access to their money, and you can buy anything with the card, then each month you will receive a statement asking you to pay a minimum monthly amount, and there will be an interest component attached to the money you have borrowed.

Before taking out an unsecured personal loan it makes good sense to discuss your options with your finance professional.