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Borrowing For Personal Loans

Many types of personal loans are available, each with its lending criteria. Some loans are unsecured, meaning they don’t require any collateral, while others are secured and require some form of security, such as a home or car. Some factors that will be considered (and which we’ll look at in-depth) are:

  • A car loan.
  • A flexi loan.
  • An unsecured loan.
  • Your finances.

Car Loans

This loan might be a good option if you want to finance a new or used car. As a secured loan, you can borrow more money than you would with unsecured personal loans, specifically from $10,000 to $100,000. Your vehicle becomes collateral for the loan so that the interest rate may be lower than an unsecured loan. The loan term is also fixed, usually from one to seven years.

Flexi Loans

A flexi loan (also called a variable rate personal loan) offers access to a line of credit, allowing users to withdraw funds up to an approved credit limit without reapplying. These are like unsecured personal loans that lend between $4,000 to $50,000 max.

However, the caveat with flexi loans is that the interest rate can fluctuate. Unlike some loans, this type does not have a set interest rate. The interest you will be charged on the funds you use from the loan will depend on the current market rates. 

With this type of loan, you are only required to pay interest on the amount of money you borrow, and you can repay the loan over time, as long as you make the minimum monthly payments. This type of loan has no break costs or early repayment fees.

Unsecured Personal Loans

Depending on your credit score and lender, you can borrow from $4,000 to $50,000 without having to offer any assets as security. You can use this loan for various purposes, including buying a car, renovating your home, or consolidating debt. 

You’ll sometimes have a fixed interest rate and the ability to choose the loan’s term length, typically between one and seven years. This means your repayment amount and interest rate will never change during the life of the loan, which can help you with long-term budgeting.

Your Finances

The last consideration lenders will examine is not just the kinds of personal loans you’re interested in but also whether you’re capable of paying them or not. Here is where a borrower’s financial health factors heavily. 

The bank will look at the following:

  • Your current financial situation.
  • Your employment status.
  • The amount you want to borrow.
  • The purpose of the loan.
  • The type of loan you require.
  • Your credit history and score.
  • Your monthly outgoings, including any existing debt repayments.
  • Your home ownership status.
  • The amount of time you need to repay the loan.

Borrowers do this due diligence for two important reasons. First, it’s to ensure you can comfortably pay back personal loans without getting into further financial difficulty. Second, it’s to protect themselves from a default by the borrower if they can no longer pay in the future.

Secure Personal Loans with RPM Finance

Know exactly how much you can loan with the help of RPM Finance! We’re Australia’s leading asset finance brokers that can help you secure accessible, understandable, and worry-free personal loans. Visit our website or call us at 1300-209-496 to get your free quote right now!

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