The Types of Personal Loans

How do you get an unsecured or secured loan?

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 are usually higher for unsecured loans due to the additional risk to lenders.

• Short term loans
It’s the last week before pay day and you’re in need of some emergency cash for transport to work or any other emergency that may arise. Many lenders offer short term loans (also known as the pay day loan), that is usually paid into your account within 12 hours after applying. These loans are unsecured, and carry high interest rates and fees.

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

• Credit score
Lenders usually grant loans to those with a favourable credit scores. Not sure what your score is? You can request a report for free at various web sites.

It’s important that you monitor your credit rating before you apply for a loan.

What is considered a positive score?

Between 640 and 700 might get you a loan, although most banks will not accept a score below 700. However, expect to pay higher interest rates with these creditors. If your credit score is below 640, do not expect to qualify for an unsecured loan from any lender.

To improve your score, start paying off whatever debt you have, and make sure to pay all your bills on time.

• Use an established lender
Find a reputable, established lender that offers flexible repayment rates and lower interest rates than their competitors. Yes Loans handles plenty of personal loans. We also have flexible repayments for up to seven years, subject to all terms and conditions.

• Documents
Once you’re in contact with your chosen lender, they’ll provide details of what documents are needed. The basics include:
• Proof of payment
• Identity verification
• Proof of address

Repaying your personal loan

Loans are usually repaid monthly, with a balloon repayment (residual payment) left over for the final instalment. Discuss your repayment options with your lender 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 premiums on time to avoid any penalties.

Try out our loan calculator to find out about your desired personal loan term and interest rate. Then contact us to begin the application process.

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  • "Thank you for all your help with processing the loan and keeping me up-to-date on the progress. We have utilised ‘Yes Loans’ twice and are completely amazed with the process and ease that you present to your customers. **It has been a delight dealing with yourself and ‘Yes Loans’ and will not hesitate to recommend your business to all that I come across. **It can be quite daunting at times applying for a loan and I can tell you that your customer service skills far outweigh any company I deal with on a day to day basis."

    Adam F - April, 2015
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  • "Hello Steve, I’d Like to point out an exceptional employee you have working for you Nathan Hanna. From our first contact Nathan has conducted himself in a professional & highly proficient manner, I felt extremely confident with the service he provided and finding a solution to an issue with my vehicle being a grey import. Which many finance company’s don’t touch, Nathan found a financier which I’m very grateful. The whole experience has been a pleasure your company certainly raises the bar in customer service which you can’t get from other companies. Nathan is a real credit to your team. I will most definitely be recommending Nathan & your company to others."

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  • "Thanks for all your help. You handled everything very efficiently and professionally. Made my life and part in all this very easy. Thanks again and all the best to you."

    Tony
  • "The service provided by Yes Loans was better than any other loan institution or bank I have worked with. What they promised they delivered and it was done professionally and with a sense of urgency and customer service that few banks could match. I have been a long term customer of a bank and had numerous loans with them for houses, cars and home improvements for a period of fifteen years. Despite an excellent credit history, my last effort to get a small loan to re-finance a car took over two weeks to process. Then having approved the loan, the bank made my life difficult by asking for endless changes to paper work, pay slips and bank details because of the time they took to process the loan. In frustration, I rang Yes loans. Within 24 hours the process was all but complete. There was a minor issue with setting up a new account to handle the funds, but this was no problem. Daniel at Yes Loans patiently helped me out and made the process easy, so that the funds were able to arrive as soon as the new bank account was set up. I am grateful for the professional way in which my business was handled and have no hesitation in recommending Yes Loans to anyone in need of a loan." Thanks Grant for your feedback!

    Grant - Feb 2015
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