2 reasons we don’t like short term loans or payday loans.

A personal loan is a sum of money a lender gives you that you repay over an agreed period of time plus interest and other fees and charges.

Personal loans generally range from $5,000 - $80,000 and the term of the loan ranges from 1 to 7 years (5 years is pretty common).

Secured Loans

A secured loan is secured by an asset like a car or a boat. Secured loans typically have lower interest rates because they are less risky for the lender. Taking a secured loan may also allow you to borrow more money depending on your situation.

One thing to be mindful of is that if you default on your secured loan the lender may repossess the asset you put up for security.

Unsecured Personal Loans

This is the opposite of a secured loan in that you don’t have to put up an asset as collateral. Generally these loans have higher interest rates because there is more risk for the lender. The upside is that you don’t run the risk of losing your asset if you default.

Debt Consolidation Loans

Debt consolidation loans are where you take one loan out to pay off your existing debts (multiple loans). If you get the right help, you can sometimes get a lower interest rate and fees than your credit cards or other loans. This means you’ll save money on interest and can hopefully pay off your loan faster. The other really big benefit is that you end up with one single monthly repayment rather than multiple repayments on different loans. This just makes it easier to manage.

A secured loan is secured by an asset like a car or a boat. Secured personal loans typically have lower interest rates because they are less risky for the lender. Taking a secured personal loan may also allow you to borrow more money depending on your situation.

One thing to be mindful of is that if you default on your secured personal loan the lender may repossess the asset you put up for security.

Secured loans can range from 1 – 7 years with 5 years being common.  You can apply here. 

Lenders focus on risk – that is the risk that you may not repay the loan. Lenders do assess people differently, which is why it’s important to shop around, but there are some general factors that most lenders look at:

1. Your credit history. Lenders review your credit score and credit history to assess your ability to repay the personal loan.
2. The amount of money you need. Lenders look at how much you want and your ability to repay (or service) the loan (what your income and expenses are). If you have excess funds after your expenses you may represent a lower risk.
3. The term of the loan. If you need longer to pay off a loan may be a sign you aren’t in a strong financial position.
4. The asset you are offering. To get a secured loan you need to put up an asset like a car, boat or caravan to support the loan. The value and type of this asset will affect if you qualify for the loan and the rate offered.

A secured loan can be used to buy a car (new or used), boat, caravan, motorcycle or even farm equipment! Some people use the assets they have as security to consolidate debts which can result in lower interest charges than they are currently paying.

A debt consolidation loan is where you combine multiple loans into one loan. The key benefits are lower interest rates and fees (depending on your situation) and one simple, easy to manage repayment.

The interest rate on a secured loan is really important but sometimes it doesn’t tell the full story about how competitive a loan really is. That’s because there may be significant fees and charges associated with a loan.

To help people compare secured loans the concept of a comparison rate was born. The comparison rate includes the interest rate PLUS all the other costs that come with the loan.

For example, let's say a lender is offering an interest rate of 3.99%. Sounds pretty good? The comparison rate for this loan may actually be 6.99% because there are set-up fees and monthly fees that significantly increase the costs associated with the loan. So make sure you take a look at the comparison rate of a secured loan so you get a feeling of the other costs involved.

We have had personal loans approved in under 30 minutes when clients fully complete our fast online application. You can have the funds within 24 hours in some circumstances. Apply here to get started.

Payday loans (short term loans) tend to be for smaller amounts ($100 - $5,000 but generally under $2,000) and taken out for 14 days to 1 year. They often have very high fees (some charge 20% + 4% per month) with significant early exit costs. Personal loans are generally taken out over 1 – 7 years and loan amounts between $5,000 - $80,000. Personal loans can have fees associated with them but they can vary considerably by lender.

Absolutely and this can sometimes be a very clever strategy depending on your personal situation. This is commonly called debt consolidation and it’s where you take one loan out to pay off your existing debts (multiple loans). If you get the right help, you can sometimes get a lower interest rate and fees than your credit cards or other loans. This means you’ll save money on interest and can hopefully pay off your loan faster. The other really big benefit is that you end up with one single monthly repayment rather than multiple repayments on different loans. This just makes it easier to manage.

A credit score is a number generated by credit reporting agencies that provides an indication of your credit worthiness. A credit score is really important as they can significantly affect your ability to get a loan and how much that loan will cost (the interest rate and other chargers).

For more information on credit scores read our article "What is a credit score".

The exact formula is not disclosed by credit reporting agencies however there are several key factors that they consider like the amount of money you’ve borrowed, the number of loan applications you have made, your repayment history and any defaults, bankruptcies, debt collection agency agreements or short-term credit you have.

For more information on credit scores read our article "What is a credit score".

Yes, your credit score can affect the rate you are offered and how much you can borrow on a secured loan.

Typically if you have a really good credit score you’ll be able to get a low interest rate and have more lenders willing to borrow money to you.

But don’t despair if you don’t have a perfect credit score. There are a number of other factors that impact your ability to get a loan like whether you own a property or asset to provide security or not. That’s why it’s best to work with us as we know the lending policies of all the lenders on our panel which gives us the best chance of finding a loan that suits your circumstances. 

For further information on credit scores read some of our great articles like “What is a credit score?” and “How do I improve my credit score?”.

The higher your credit score the better your chance of getting a loan and the better chance you have of getting a lower interest rate. This is because if you have a really good credit score you are a lower risk to a lender and therefore are a good chance of paying back the loan. Conversely, if you have a lower credit score a lender may classify you as having higher risk and therefore charge a higher interest rate.

In addition to your credit score, other factors like overall banking conduct (such as dishonours and payday loans) can also impact the interest rate you are offered. 

At nmoni we do not perform upfront credit checks for our secured loans. This means that we can review your application and give you a guide as to whether a lender will give you a secured loan before a credit check is completed. Our process reduces the number of credit checks required and therefore helps you avoid hurting your credit score. Start the process today by completing our fast application.

This is really important as you don’t want to get a loan with a lender that charges high fees and has high exit costs. We only deal with reputable lenders so we can ensure you avoid any of these potential potholes. Also, make sure the lender or broker you use has high Google ratings (we happen to have a 4.9 out of 5 Google rating!).

Secured loans are amongst the easiest loans to get. That's where you put up something of value in exchange for funding. Car, boat and caravan loans are types of secured loans and means the lender has some security over the loan.

We can review your situation and provide feedback on why you are being declined without hurting your credit score. Apply now and we'll provide you valuable feedback.