A personal loan is where a lender gives you money for things like debt consolidation, home improvements, travel, cosmetic surgery, a car or even a boat.
When you get a personal loan you agree tp repay the loan 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 Personal Loans
A secured personal 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.
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.
Trap 1: Not shopping around
The good news is that there are many lenders that offer personal loans.
But I hear you say “shopping around takes time and is a hassle.”
Instead of contacting many lenders yourself, use an online loan service like nmoni. In minutes we can check your loan requirements with up to 35 of the best and most competitive Australian lenders to find you the best personal loan that can save you serious money.
Trap 2: Hurting your credit score
When looking for a personal loan some people start applying for a loan directly with many different lenders.
This can cause a big problem because applying for too many loans can impact your credit score as lenders do what’s called a hard credit check.
Hard credit checks are a formal credit inquiry and therefore hurt your credit score.
If you apply for a loan with lots of lenders, you run the risk of seriously hurting your credit score.
At nmoni we avoid all these issues because we provide personal loans without an upfront credit check. This protects your credit score while we check with up to 35 lenders for a loan that suits you. This is really important as your credit score can have a big impact on the interest rate you get.
Trap 3: Getting tricked by low rates
This may sound odd but sometimes the lowest interest rate is not the best personal loan for you. Some lenders offer a low rate but charge high application fee’s, establishment fees or monthly fee’s. This means the overall cost of the loan (interest plus fees) is actually more than a personal loan with a higher rate but little to no fees.
This is why it’s important to use us. We clearly layout all the fees and charges associated with a personal loan so you can compare options much more easily and work out which loan option is the best for you.
Trap 4: Getting a payday loan or short-term loan
Loans under $5,000 (but generally less than $2,000) are often called payday loans or short-term loans.
These loans can be very convenient, fast and require no asset as security. Unfortunately, the downside is they can be very expensive because they have very high fees. For example, some payday loans under $2,000 charge 20% of the amount borrowed and a monthly fee of 4% per month. They also have high default fees. These types of loans can also affect your credit score. Finally, some lenders won’t lend you money if you have too many of these types of loans.
If you are considering a payday loan think it through really carefully and make sure you are aware of all costs, terms and conditions. If you apply for a loan through us we can let you know your options for your situation from our large panel of lenders.
Check the interest rate and the comparison rate: The comparison rate takes into account fees and charges associated with the loan to give you a new interest rate. This comparison rate is usually higher than the interest rate because of these fees and charges. As the name suggests, the comparison rate will allow you to compare loans from different lenders more easily. We can help you work all of this out as we find you a loan from our many lenders.
Loan term: Loan terms for secured loans are between 1 and 7 years (5 years is common).
Fees and charges: Make sure you are aware of all the fees and charges. Knowing the comparison rate will also help here. We lay this all out for our clients.
Fixed or variable interest rates: Most secured loans have a fixed rate but there are some with variable rates. Make sure you know what you are signing up for!
Repayment frequency: Are the loan repayments weekly, fortnightly or monthly?
Repayment terms: Can you make additional repayments? Can you redraw extra amounts you have paid back if something comes up?
We get thousands of personal loan applications so we have a good understanding of why people get declined for a personal loan.
Here are the top 5 reasons why a lender may decline you:
Number 1: Dishonours
Too many dishonours can result in an instant decline. Dishonours are scheduled payments coming out of your bank account. If there are insufficient funds in the account at the time to cover these repayments it gets marked as a dishonour and doesn’t look good. Lenders vary in their views on dishonours. Some lenders only accept one or two, while others will accept up to 5.
Number 2: Too many short term or payday loans
Short term loans and pay day loans are frowned upon by most lenders as these types of credit are very expensive. They are generally paid back by over a shorter period of time versus a normal personal loan which may impact your finances from one month to the next.
If you have too many of these types of loans lenders will often reject your loan application. We really dislike these loans because of this and the high fees they charge. Avoid them if you can!
Number 3: Low Credit Score
If you aren’t sure what a credit score is you can read our article “What is a credit score” for all the background.
Factors that push your score down in general are things like too many loan applications, dishonours, defaults, court judgements etc. You need to be careful if you are shopping around applying for a loan directly to lenders as they hit your credit file upfront and can significantly drop your score even if you are declined.
Number 4: Late payments on existing debts
Most lenders mark your repayment history on your existing loans such as credit cards, car loans and mortgage repayments for the last 24 months on your credit file. For each 30 days of being late, this gets added to your credit profile and hurts your credit score.
Number 5: Newly funded Loans
If you recently took out a personal loan with another lender, then you would need to wait for a min of 30 to 90 days to pass before you can get another loan.
Avoid these top 5 reasons and you’ll improve your chances of getting a personal loan and maybe even improve the interest rate you are offered.
If you want to find the best personal loan for a debt consolidation, home renovation, medical expenses or that dream set of wheels simply apply with us and sit back and relax while we do all the work! We’ll look at your credit profile and what you are trying to achieve, scan our large panel of very competitive Australian lenders and find a personal loan that works for you and saves you serious money.
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:
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.
Because we combine sophisticated technology with a highly skilled Australian team, we can quickly give clients feedback on their chances of getting a no credit check secured loan, the amount they can borrow and of course the interest rate. All without hurting your credit score by performing a soft credit check. Apply now to give us a test!
Many people can qualify for our loans with no upfront credit checks. This may include those with excellent credit to poor credit history and those who have been bankrupt in the past who are applying for car loans. Complete our quick application form and you’ll be on your way to a quick response. There could be more financing options available to you than you initially thought!
Simply complete our fast online application. Our technology will quickly guide you through the process. We will give you feedback on your loan application all without doing an upfront credit check.
After searching for a car loan I found nmoni. They are very helpful… keep you up to date at the progress of your loan. And made settlement a breeze. Thank you Chris and Michelle you are both amazing.
Jodie Bayliss
Nmoni is such a great lending company, Christina is the best of best broker, person and very understanding. Great customer service and very helpful any time, she actually answers the phone unlike other company employers who do not care. She Actually cares and Christina does everything in her power to help and solve your issues. Thank you Nmoni and thank you Christina.
Mirjana Markovic
Great loan company that really cares about its customers. Avoid big banks and get your loan requirements through Nmoni instead. You’ll get a much more caring a personalised service. Christina in particular was great!
Fabio Hawkins
So easy to apply and well mannered and efficient staff make the process so easy.
Christina was so helpful. I will be letting friends know of this great service.
Christina Watson
Christina was excellent. Prompt responses and kept me up to date during the whole process. Great to have someone take the time to review your current situation and not something that happened several years ago.
Scott McKenzie
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