You’re dreaming of that trip to Europe or trying to reduce your debt. Whatever your financial goals, a personal loan can help you out. Before you head out and start applying for a loan, there are a few things you need to take into consideration – like what type of personal loan will suit your requirements.
The types of personal loans
Choosing a personal loan from the multiple options available requires research to secure the best deal. Lender fees and interest rates vary; you’ll also want to know the terms of each loan you’re considering and compare your options. When you’re researching the various types of loans, you’ll come across the following:
– Secured loans
Secured loans have collateral attached to it, so if you default on your repayments, the collateral can be used to recover the debt for the lender. Home and car loans are good examples. If you’re trying to build a credit score, then this is a wonderful way to start. They also generally have lower interest rates.
– Unsecured loans
As suggested by the name, it’s the very opposite of secured loans and does not require any collateral such as your home or car. Interest rates can be higher for unsecured loans due to the additional risk to lenders.
Now that you’ve figured out the various loans available to you, it’s time to get your application ready.
What you need to apply for a personal loan
Yes Loans has a number of lenders that offer unsecured loans. We also have flexible repayments for up to seven years, subject to terms and conditions.
Repaying your personal loan
Personal loans can be repaid weekly, fortnightly or monthly. Discuss your repayment options with your broker and make sure you understand the conditions and criteria that govern how your loan must be repaid.
Your lender will usually provide an amortising loan – whereby you pay a fixed monthly amount, which includes your interest rates. You will pay off this loan monthly until the balance is zero. Whether it’s a secured or unsecured loan, always make sure to pay your payments on time to avoid any penalties.