Personal Loan Application – How To Apply For A Personal Loan
Your personal loan application is an important part of securing this type of financing. Before you fill out the application, it is important that you understand what you are getting into and how your loan will work. It really comes down to knowing exactly how much you will actually spend to repay your debt and any of the potential costs you could run into down the line. What you want to look for is a product that offers you agreeable terms at a rate that makes sense for the amount of cash that you need to borrow.
Featured Bank of Melbourne Personal Loan
Apply for Bank of Melbourne Personal Loan and take an advantage to upgrade your car or consolidate your debt with affordable rates and fees.
- Low interest rate so that you don’t pay more than you need to
- Fixed or variable interest rate options
- Choice of flexible repayment options of weekly, fortnightly or monthly.
- Track and manage your loan repayments using Internet Banking
- Easy to apply and fast approval
- Protect your loan with Consumer Credit Insurance
Questions To Ask When You Apply For Personal Loan
What types of personal loans are there?
Along with the various products that are offered by financial institutions, your loan can either be secured or unsecured. When it is secured, the lender actually owns the asset until the debt is completely paid off. For example, if you borrow money to purchase a house or vehicle and then do not pay your debt off that vehicle or home can become property of the lender. This tends to be less expensive in terms of interest because the lender takes on less risk as they should be able to recoup their costs through the asset. On the other hand, if your balance is unsecured you might wind up with a higher interest rate and even fees because the lender needs to protect their investment.
What is the interest rate?
Interest is the amount of money that you are charged for borrowing from a financial institution. Typically, interest is charged daily and applied to your account monthly. Many lenders will advertise a comparison interest rate that takes into considerations the fees that the lender charges. The goal of a comparison rate is to give consumers a clear idea of how to compare rates to one another. It would be easy for a lender to offer very low rates but then charge such high fees that a borrower would have been better off simply paying a slightly higher interest rate. These comparison rates have been mandated by the ASIC to avoid this situation.
Are there lots of fees associated with borrowing?
While not every bank charges the same fees, you should be aware of any potential fees that could be charged by your lender. Not all of these fees apply all the time but there are some common charges you should know about that will play a big part in how much your loan actually costs. The establishment fee is the cost that the lender charges to create your loan account. Often this fee is added to the total balance of your debt.
Ongoing fees are charged to your account on a monthly basis. They are charged to compensate for the maintenance costs associated with keeping your account. Exit fees are charged if you pay off your debt early. When you fill out your personal loan application form, you should look to see how these fees are assessed. It can make it so that it makes more financial sense not to pay off your loan early.
What is redraw?
If you make extra repayments to your debt, you may be eligible for a redraw. This is when you actually withdraw the money you put in extra payments. While this is not allowed on every account, it can be quite beneficial. The big perk is that it allows you to put extra money toward your balance while still having the security of having access to that cash should you need it late on. The drawback is that some lenders will charge a fee for redraws and may only allow you to redraw a minimum amount at any given time. If you think this might appeal to you, be sure to check your terms and conditions to see if you will be allowed to make redraws and if there is a cost to do so.
Will I be able to budget for my repayments?
Yes, you can budget for your repayments as long as you have used a loan repayment calculator. This tool is easily available on line and can take into account the length of time you will borrow for as well as the interest rate at which you will borrow and other fees. It can then give you an adequate estimation of how much your monthly payment will be as well as how much you will spend on interest until the debt is paid off.
If your interest rate is variable, there may be some variation in these numbers and you will need to be financially prepared for potential rises in your monthly payment. Typically, a bank will allow you to make your monthly repayment by direct debit or BPay. Like other debts, it is often a good idea to set up a regular direct debit so that your bill is always paid on time. This avoids costly late payment penalties.
When you submit an online personal loan application, you will need to provide documentation of your identity and your salary. This may mean your pay slips or bank records depending on how you get paid. The lender will also want contact information for your employer or accountant so that they can verify your finances. Depending on the bank you are using, they may want more data about your assets and bills before they can make a final decisions about lending to you.
You should, however, be able to get an initial approval within moments of submitting the application. Once your loan has been completely approved, you can expect to have the cash deposited into your nominated account within a day. Keep in mind that as soon as those funds are deposited your interest meter starts ticking. You should use the funds immediately for whatever it was you borrowed for because there is really no sense in paying interest on money that is just sitting in an account.
Featured Personal Loans
| Personal Loan | Details | Min Interest Rate | Min Comparison Rate | Min Loan Amount | Min Loan Terms | Apply Fee | |
|---|---|---|---|---|---|---|---|
 ME Bank Personal Loan | A low rate personal loan from ME Bank with no application fee for a limited time. | 13.59% | 13.81% | $5000 | 1 year | $0 |   |
 Aussie Personal Loan | A smart way to consolidate your bills to save time and money so you can pay for your holiday, a wedding or renovate the house. | 13.90% | 14.84% | $3000 | 1 year | $199 | |
 Sugar Money Personal Loan | Fixed rate personal loan with flexible options to get you funds when you need it. | 13.99% | 15.00% | $3000 | 2 years | $250 | |
 bankmecu Personal Loan | A convenient and fast way to purchase a car or debt consolidation with affordable rates and fees. | 13.49% | 14.55% | $1000 | 1 year | $150 | |
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