Last Updated on
Anyone who has ever borrowed money knows it can be hard to pay back at times. However, borrowing is a bridge most of us need in order to quickly get ahead in life. Personal loans are the fastest means of acquiring funds for a range of purposes, but the first criterion is your ability to make the loan repayments on time.
If your earnings or income are high and you have a clean credit history, a personal loan will usually be approved. People on lower incomes need to tailor their approach to repayments that are make-able. You will need to provide evidence of current and ongoing expenses, revealing enough disposable income to furnish the loan and thrive . There are other stipulations, including Australian residency requirements, that will affect the application.
Also in the last few years, it has become difficult to get loan approval from banks that you have no account with. The loan approval rate for non-customers is notably lower than for customers with years of historical data.
What makes personal loans so popular is their versatility. The most obvious loans, and the ones most likely to be approved for, are for expenses that are often beyond the reach of the immediate purse-strings. A personal loan can help you create and maintain your dreams.
Popular Personal Loans Include:
- Purchasing a car
- Home improvements, extensions, and renovations
- Consolidating debts
- Vacations and travel
- Special occasions, weddings, celebrations
Interest rates on personal loans are often lower than on credit cards, but borrowing power is often much greater. In other words, a personal loan is a big responsibility but also an opportunity to prove your financial management skills. Timely loan repayments are ultimately reflected on your credit score, assisting with a home loan or other loan application down the track. Big banks released their light credit cards, which are credit cards with lower interest rate than personal loan, but these cards have very low credit limit, somewhere around $5,000.
Our borrowing power
Australians are buoyed by continued steady economic growth. Despite gloomy forecasts, the economy grew around 2 percent during 2019, mostly due to accommodative monetary policy and increased household disposable income growth. Industrial resources have slid in the sharemarket as businesses continually realign with global holdings, but it’s worth remembering that households represent just over half the national aggregate, and when Australians spend, the economy grows.
Apart from general consumer goods, most Australians also expect to purchase a car, improve or extend their house, attend special occasions, and consolidate debts at some stage. The positive economic climate is in no small part due to the enthusiastic uptake of personal loans by Australians. These loans account for a large chunk of money in circulation, so it’s no surprise the Australian economy is envied by other nations.
As mentioned, eligibility requirements for a personal loan are quite stringent in order to safeguard the lender from loan defaults. Before visiting the bank, check that you qualify for a personal loan. Regardless of the type of loan: Fixed Rate Personal Loan, Variable Rate Personal Loan or a Secured Car Loan, you need to satisfy these requirements.
To qualify for a loan you will:
- Be at least 18 years of age
- Have a good credit score
- Be an Australian citizen or permanent resident (or from New Zealand with 457 visa)
- Reside in Australia
- Meet income requirements
A personal loan provides immediate benefits to the borrower. For example, a home owner can upgrade their house to accommodate a new arrival or extended family. A personal loan allows you to redesign your home while increasing its value.
Convenient and fast approval
The procedure to apply for a personal loan is quite simple, and approval is generally fast. Once you have the required documentation and proof of income, all it takes is a meeting with your bank representative. Fees are small also, making a personal loan easy to establish. The loan approval fee and administration charge are usually less than $200 combined. Arrangements other than variable or fixed rate loans, such as a secured car loan, usually require an establishment fee of several hundred dollars.
Lending managers meet regular people every day, and in a competitive banking world, it’s in their best interest to provide loans to as many suitable people as possible. If you have a plan or dream that requires a financial boost, there is every chance your are qualified for a personal loan to make it happen.