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Personal Finance
Get a personal finance loan that works for you
A personal loan can be a great way to get cash so you can live life to its fullest. Here, we discuss a few things you should think about before deciding if a personal loan is right for you. Speak with a specialist to discuss your options surrounding personal loans.
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Purpose
A personal loan can help you get the funds for almost anything. However, some lenders do impose restrictions on what can be used for personal lending. Commonly personal finance is used for the following situations.
> Purchase a vehicle
> Debt consolidation
> Weddings
> Holidays
The loan amount is generally between $1000 and $50,000 and the term of the loan is generally between 6 months to several years. Personal loan interest rates are higher than home loan rates and the amount you can borrow is much less.
Type of Personal Loan
Unsecured
A personal loan can be accepted with no security attached. This reduces the risk to you because your assets aren’t at risk of being repossessed if loan repayments are missed. The reduced risk you face is increased for the lender, so the interest rate you receive will be higher than if a security was attached.
Secured
If you include an asset as your security for the asset, then the interest rate you receive will be more favourable. However, this comes at the cost of your asset facing the risk of being repossessed.
Our specialists can work with a range of lenders to offer you a personal loan that suits you best. Get in touch with us to discuss your options.
Benefits
Personal loans are not as constrained as other types of loans. They can be used for a range of purposes in the same loan as long as they fit within lender restrictions. This allows for a great deal of flexibility, but you should still only take out as much as you need to avoid unnecessary debt.
Relative to a credit card the interest rates received will most likely be lower.
If an unsecured personal loan is taken out, then there is no personal assets at risk of being repossessed.
A personal loan can be used to consolidate debt which makes financial planning much easier and helps you keep on top of your financials.
Risks
Personal loans can come with high fees and penalties if payments are missed. If the loan is secured then the asset is at risk of being repossessed if these payments continue to be missed.
A personal loan will add to your current debt levels and may make borrowing for other purposes more challenging while money is still owning.