Finance

5 Advantages Of Personal Loans Over Other Forms Of Finance

In Australian lending circles, there are a multitude of lenders offering loans and credit for all sorts of things. There are Home Loans, Car Loans, Caveat Loans, credit cards, lines of credit and more. One of the most popular financial products is a Personal Loan. There are reasons why Personal Loans are so popular with Aussies, and when it comes to Personal Loans, Australia has a lot of lending options.

In this article, we’ll take a look at some top reasons why Personal Loans are so in demand.

You Have Flexibility When It Comes To How You Use Your Money

If you apply for a Home Loan, the money has to be spent on the purchase of a house or land. If you get a Car Loan, the money is put towards a motor vehicle. The same can be said for Mortgage Loans and Caveat Loans.

However, if you apply for a Personal Loan, the money can be used for a number of different purposes. Exactly what a Personal Loan can be used for may vary from lender to lender, but generally speaking, Personal Loans can be put towards almost anything.

When you apply, you’ll be asked what you want the money for, however despite this, you still have the flexibility to use it however you want. For example, you could apply for a Personal Loan to fund your bathroom upgrades, but you may end up using the loan for unexpected car repairs or a weekend getaway.

Common reasons for applying for a Personal Loan include

  • Paying for a wedding
  • Home improvements
  • Holidays
  • Educational expenses
  • Purchasing furniture or appliances
  • And much more…

Fast Application and Approval Processes

How fast the process is will depend on the lender. If you apply for a Personal Loan with a private lender, you’ll be pleased to learn that the application and approval process tends to be significantly faster than it is with the traditional banking sector. The reason for this is, private lenders like to find ways to get a leg up on other lenders, and one of their favourite ways of achieving this is with speed.

Nobody likes to wait long for anything in today’s world, and waiting for a decision on a Personal Loan is no exception. If you need fast Personal Loans, say for an emergency, then choose a private lender for your Personal Loan with instant cash transfers.

Enjoy Competitive Interest Rates

It’s a very competitive world with Personal Loan providers and this creates an environment of stiff competition, which is great for you, the customer!

When you’re on the hunt for a Personal Loan, make sure you take some time to compare the interest rates of each lender, because they can vary quite a lot. You also should note that some lenders will also provide more competitive interest rates if you have a good credit history. If this is you, keep an eye out for lenders who offer tailored rates.

Generally speaking, Personal Loans do attract much more competitive interest rates compared to your average credit card.

If you’re in any doubt, just talk to your lender about your options and what will work best for you.

A Secured Or Unsecured Personal Loan

Another common option you have with Personal Loans compared to some other types of finance is you can opt for a secured or an unsecured Personal Loan. Secured Personal Loans, where you put something up as collateral, usually have slightly lower interest rates but, you have to put something you own on the line as security against the loan.

An unsecured loan, on the other hand, means you’re free and clear of having any obligation other than repaying the borrowed funds. For this reason, many people opt for an unsecured Personal Loan, particularly for smaller loans, as there is less risk and less paperwork involved.

An example of this is using a Personal Loan to buy a car. Rather than having the car you buy at risk of repossession, an unsecured Personal Loan means your car is not on the line.

Variety Of Loan Term Options

Depending on the lender and how much you borrow, the repayment terms for Personal Loans can range from as little as 3 months, or up to 7 years. This gives you loads of flexibility when it comes to how much time you need to pay back your loan.

Personal Loans allow you to budget easier compared to other types of finance such as a credit card. You will know the exact amount you need to repay and when it’s due. With a credit card, this amount can fluctuate depending on how much you’ve spent that month.

In Conclusion

Enjoy the many benefits a Personal Loan offers, no matter which lender you choose. Personal Loans are versatile and flexible, so talk to your lender today.

Atif Mallo

Atif Mallo is a freelance blogger with huge interest in technology, science, life hacks and health. He loves coffee, cheesecake and chess. Drop a line in comments to leave feedback for him.

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