Why choose personal loans?
Sometimes, a sudden medical emergency or urgent home renovation might prove pretty tough on your budget plans and might also drain your entire savings at one go. Getting a personal loan can save you from such situations and also assist you financially.
Some advantages of taking a personal loan are as follows :
- It is an unsecured loan and hence is not secured by tangible collateral alike mortgages and car loans.
- It offers easy repayment options
- Often better than a credit card as the interest is lower and often negotiable
- It may also offers fixed interest rate repayments throughout the life of the loan
The banks usually don’t ask for the purpose of applying for a personal loan. Personal loan can be used to buy any household goods and furniture, to buy computers and other electronic equipment, to take your family on an exotic vacation, to support your home loan repayments, to pay the balloon payment on your lease, and for debt consolidation.
Types of personal loan
There are a number of personal loan options to choose from and Credit Hub Australia will analyze your needs and financial situation and guide you to choose the right type of personal loan in Melbourne.
Different types of personal loans are as follows :
A variable personal loan, as the name suggests, levies an interest rate that is subject to change. Hence, your repayments may differ during the life of your loan. To help you pay off your loan early, various variable personal loans give you the option to make extra repayments towards it. Some variable loans also have the option of accessing the funds via a redraw facility and then using them for other purposes.
Fixed personal loans have a fixed interest rate. This means that the repayments will not change for the entire term of the loan. These types of loans offer stability as you will be sure about the repayment amount every month and help you budget accordingly. Unlike variable loans, you cannot make extra repayments towards your fixed loan in order to repay it early. However, speaking to your lender might give you some options.
In case of secured loans the lender or bank will ask you to put up some assets as security to borrow a sum of money. Anything like your car, house, or even jewelry can be kept as collateral with the bank or lender. In case of failure of repayments, these assets will be acquired by the lender or bank.
An unsecured loan does not require you to offer any assets as collateral to the bank or the lender. However, the lender may ask you to show an evidence of regular income to make sure that they are not risking their money by providing you a loan and if you will be able to repay the debt.
It is a good option to go for in case you face any emergency and require urgent cash. It allows you to withdraw an amount from the account which your bank has agreed upon. In Line of credit loan, you don’t need to pay interest on the maximum amount but only on the amount borrowed.
To help students and other university goers financially, many financial institutions offer student loans. This loan can be used by the students to buy textbooks, laptops, and other necessary stuff that they may require for studying.
A debt consolidation can help you save money and lower your interest rate. By combining all other loans and paying them sooner by taking a single loan can free you from the hassles of managing the monthly repayments of all the other loans.
It is always good to know what you would require to apply for a personal loan in Melbourne even before you speak to someone about it.
Generally, lenders require at least two forms of identification from the ones listed below:
- Driver’s licence
- Proof of age card
Supplementary documents that you may require are :
- Birth certificate
- Citizenship certificate
- Pension card or health care card
- Utility bills
- Overseas driver’s licence
To verify your income , you will also have to provide lenders with the following documents while filling out the application form.
- Annual salary after tax deductions
- Latest three month’s payslips
- Bank statements
- If self-employed, tax returns from the last two years
Additional financial information required
You would also have to submit information regarding your assets, debts, and liabilities for which you need to keep the following documentation ready.
- Credit card and loan statements from your current loan accounts
- Income statements from any of your income-producing assets
- An estimation of your current expenses
- A current rent or mortgage statement
Lenders will verify your employment too when you apply, and for that, you will have to provide the lender with details of your employer, like the employer’s name, address, contact information and also the duration you worked with them. If necessary, we will get in touch with your employer to verify the employment-related information provided by you.