28-Mar

Beginners guide to loans

A loan is an amount of money that must be repaid with interest. Loan applications were once submitted in person at a storefront. Credit companies may now take loan applications online and make approval decisions in a matter of minutes, thanks to technological advancements. On the market, there are a range of loan kinds, each with unique characteristics that cater to a certain audience. Traditional banks and non-traditional credit companies are now offering loans.

What is important to consider?

To begin, think about whether you are confident in your ability to repay the lender before taking out a loan. We highly advise against taking out a loan if you believe you will be unable to repay any amount borrowed. You may use the MyCashOnline loan calculator to assist you in this situation.

If you’re confident you’ll be able to repay the loan, you’ll need to figure out what you’ll use it for and how much you’ll need to borrow. There are a variety of loan options available, each customised to a certain requirement. A short-term loan, for example, may be the ideal alternative if you need a little quantity of money for a short period of time. A personal loan, on the other hand, will be more ideal if you want a greater sum of money, such as $10,000 for house upgrades.

After you’ve decided on the type of loan, you’ll need to figure out how much money you’ll need to borrow and how long you’ll need to pay it back. Lender fees and interest rates vary based on a variety of circumstances, but the loan amount and duration serve as a rough indication for how much each repayment will cost. Lenders generally give loan calculators to help you estimate the overall payback amount. Make sure you choose a loan amount that you can afford to repay.

After you’ve decided on the amount you want to borrow and a loan period that works for you, do some market research to identify reputable lenders with low interest rates. Friendly Finance comparison tables may be used to compare suppliers of Short-Term, Personal, and Car Loans. After you’ve identified a lender and verified that you satisfy the minimal requirements for a loan, you can go to the lender’s website to start your loan application.

How do I take out a loan?

Applying for a loan is a simple and straightforward procedure. The vast majority of credit providers provide online application forms that may be completed in a couple of minutes. In most circumstances, you will be required to supply personal information, job information, and bank account information in order for the lender to verify your identification and determine your affordability. Most credit providers will likely provide you a quick pre-approval judgement. If you’ve been pre-approved, you’ll have to provide extra proof to the lender before you can get your money. Short-term lenders, for example, will need your bank statements for the last 90 days. Most lenders use trustworthy third-party systems to automatically gather data with your consent, making it an easy procedure.

What will affect being approved?

Each lender will have its own set of requirements for approval. To be eligible for a loan, you must be a permanent resident of Australia, above the age of 18, working with a regular source of income, and have an active bank account.

During the decision-making process, lenders will do a credit check on you, which means your credit score will play a role in your acceptance chances. Based on your prior financial behaviour, your credit rating is an estimate of your capacity to meet financial obligations. You are less likely to get approved for larger loans if you have a low credit rating. Small loan’short-term’ lenders don’t care about your credit score because they’re more interested with your present circumstances than your financial past.

How do I get my money?

If your loan application is successful, it is likely your lender will electronically transfer the money to your bank account. The time it takes for you to receive the loan will depend on the lender, the loan type and your banking institution. For example, if you apply before 3 pm for a short-term loan you could receive the money the same day. A larger personal loan may take a few business days for the funds to be transferred.

Making repayments?

Repayment amounts, frequency and dates will be outlined in your loan agreement. We strongly advise you fully review your loan agreement prior to signing for your loan. Loan repayments will likely be automatically deducted from your bank account via a direct debit set up with the lender. Your only concern will be to ensure you have enough funds in your bank account for the repayments to be made.

Struggling to make repayments?

If you are struggling to make loan repayments, you need to contact your lender immediately. Most lenders will work with you to help you successfully pay back the loan, however inability to make the repayments can lead to additional fees, contact from debt collectors, a negative effect on your credit rating and, in some cases, legal action.

If you are really in need of quick cash for personal expenses, make an online application with My Cash Online today.



*Disclaimer & Example: For our Small Loans of $2,000 or less, an APR (Annual Percentage Rate) doesn't apply. These loans are fee-based only with a term between 62 and 180 days, and so the APR is 0%. The establishment fee is 20% of the amount borrowed and the monthly fee is 4% of the amount borrowed. Representative example: a loan of $1,000 repaid over 3 months equates to a total amount payable of $1,320 comprised of $1,000 principal (amount borrowed), $200 establishment fee and $120 in monthly fees. The maximum comparison rate on loans between $300 and $2000 is 199.43%.
For our Medium Loans between $2,100 and $5,000, with a term between 2 months and 12 months, the maximum Annual Percentage Rate (APR) is 48% (Comparison rate 65.6597% p.a.) and there is a $400 Establishment Fee. A Medium Loan of $3,000 borrowed over 1 year would equate to a total amount payable of $4,289 (including a $400 establishment fee).

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR %). The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

© 2022 Owned by Australian Synergy Finance Pty Ltd, ABN 54 613 655 646. Australian Credit Licence 490422. The information on this webpage is general information only and does not take into account your objectives, financial situation or needs.