How much money can I borrow with a personal loan Australia? It’s a good question. Here are 3 simple steps explained to determine the loan amount.
Personal loan Australia allow you to apply for a one-time loan and repay it in installments within a certain period (plus additional interest). In many cases, you will pay for 15 years each month. Personal loans are usually smaller than home loans and are suitable for one-time loans between US$2,000 and US$100,000. These amounts are too large to be deposited into the credit card. This also makes sense, because if you make monthly payments, you will know how long you have been in debt and how much interest you paid in advance.
Step 1: Create a budget
Although the lender may approve your large loan, this does not mean that you should automatically withdraw the full amount. You can use the Mozo Budget Calculator to get a clearer picture of your current financial situation and how much you will spend after shooting all expenses (mortgage/rent, utilities, insurance, etc.).
Example: Suppose your disposable income is $1,000. Then you need to consider how much you are willing to spend to repay the loan. With a monthly payment of $900, you may have to eat canned tuna during the loan period. Who wants to live like this?
Step 2: Calculate your recurring payments
After you have decided on the loan amount that suits you, please use any personal loan repayments calculator to determine which loan option is right for you. If you find that the amount you want to borrow makes your continuous payment too high, you may need to consider a lower amount or a longer term.
Example: Suppose you borrowed $20,000 at an interest rate of 10%. Using the personal loan repayments calculator, you found that your monthly repayment amount is:
- $923, which can be repaid within 2 years, or-
- $425, which can be repaid within 5 years.
Please note that although the long-term option is available Increase monthly to relieve financial pressure. The downside is that you end up paying $3,346 in interest during the loan term.
Step 3: Compare personal loans online
Now that you have determined the amount you can borrow, it is time to search for personal loans until you find a loan with a competitive interest rate and features that suit your unique needs. Read the breakdown of the different types of personal loans in the market.
What types of personal loans are there?
Although there are many different types of personal loans in Australia (car loans, travel/vacation loans, and maintenance loans), they work in roughly the same way… You collect and repay it in one lump sum from the lender. Within the agreed period (plus interest/fees).
- Benefits to you: You can buy immediately without first delaying the full amount.
- Benefits to lenders: You benefit from the interest and fees paid for their services.
However, here are some different types of personal loans based on your Personal needs to choose:
Personal mortgage or Secured personal loans:
With a mortgage, you must state the value of your car, house, or other (qualified) assets as a guarantee for the loan. Why? Of course it is for lower interest rates and commissions! Please note that in the event of a loan default, the provider has the right to seize your assets.
Unsecured personal loan:
On the other hand, if you don’t want to take a risk with a car or house, or don’t have assets to secure your loan, you can choose an unsecured loan. With credit, you don’t need to use assets to secure loans; the trade-off is usually higher interest rates and fees.
Another way to use personal loans is to reduce debt. Debt consolidation loans enable you to combine multiple debts (from multiple loans or credit cards) into one loan. There are worries about repayment and interest rates, not every debt.
You may like:
- Commonwealth Bank Personal Loan: An easy guide to taking out
- Best 5 Tips for getting your personal loan fast approval
- Co-Operative Bank Personal Loan
This article is intended to provide general information only for educational purpose. It does not consider the financial situation or needs of readers and should not be interpreted as a recommendation for any financial product. Before making a decision based on this information, you should consider seeking financial advice. Financing applications require loan approval. These conditions will be included in our loan offer. Fees and charges are due.