Do you long for a new car or a better vehicle? Perhaps you’re looking for a loan to finance your dream car or for money to pay for your wedding. Personal loans could be the perfect financial solution to your needs.

A personal loan is a major decision. We have compiled a list with 6 things you should consider before applying.

1. Are you able to meet the criteria for a personal loan?

First, you need to determine if you are eligible for a personal loan. These are the basic requirements:

  • You must be 18 years old or older
  • Regular income is earned
  • Permanent resident of Australia, or you have an acceptable (PDF38KB) nonresident visa
  • Accessible information about your current financial situation

Before applying for a personal loan, it is a good idea to fill in your details into the Loan Power calculator. Once submitted, your application will be subjected to the lending criteria.

2. What’s the purpose of a personal loan?

Next, think about the purpose of the loan. There are many types of on the market, so make sure you choose one that is right for your needs and purpose. We offer three types of personal loans at Westpac.

Unsecured Personal Loan

Unsecured personal loans are loans that are offered without security on an asset such as a house or car. This loan is used for travel, weddings, and debt consolidation. It has a slightly higher rate of interest than secured loans, but it gives you the freedom to borrow money with no collateral.

Car Loan

Car loans are a great way of buying a car, new or used, without spending a lot of money. Car loans are often lower than unsecured personal loans because the car serves as collateral.

Flexi Loan

The Westpac Flexi loan acts as a line-of credit and allows you to draw funds when you need them. You pay only interest on the amount you withdraw, not the entire lump sum. This makes it different from a traditional personal loan. This type of loan is ideal for situations when you might need to pay for different things, such as a house renovation, a baby, or a wedding. This type of loan has the best feature that you can access the funds whenever you need them, and there are no withdrawal fees. You can only apply for Flexi Loans in a branch, or by calling 720 697.

Take a look at our personal loans comparison to help choose the right loan.

3. What are the interest rates?

A bank or financial institution can change the interest rate on money that is lent.

You want to find a personal loan with the lowest interest rate possible so that you can pay off the money and not worry about extra interest. The interest rate will depend on the type of loan. The interest rate for a loan secured by an asset will typically be lower than that of a loan that is unsecured.

To see how we stack up against the rest, check out our current personal loan interest rate.

4. What fees are associated with a personal mortgage?

Each loan has a different set of fees. You should be aware of the following fees:

  • Fees for lending establishment
  • Servicing fee
  • Early departure
  • Repayments made early
  • Insurance
  • Withdrawal fees

To avoid unnecessary costs, ensure you carefully consider these fees before deciding on the type or term of your loan.

5. What is the loan term?

Your repayment amount and interest rate will be determined by the length of your loan. Your monthly payments will be lower the longer your loan term. Personal loans are available for between 1 and 7 years.

6. How will you pay it off?

Although this seems obvious, it is important to plan how you will repay the debt. Are you going to pay it weekly, fortnightly, or monthly? Are you planning to pay it off earlier than the term? These are key considerations that will help you select the right loan for you to avoid unnecessary costs.

These 6 points will help you to be well-equipped to make the best financial decisions and to feel confident that you are on track to realizing your financial goals.

Anita Wagner

She loves history and has a PhD in History and Antopology. Loves to dig up a past.

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