Personal loans are great for things like a home renovation, debt consolidation, car loans, cosmetic surgery or a long dreamed of holiday.
What’s even better than a personal loan?
A low interest rate personal loan!
But, how do you get one?
Follow our two-step process and you’ll be well on the way to seeing if you qualify for a low interest rate personal loan.
Step 1: Make sure your credit score is in the best shape possible.
Your credit score will have a major impact on whether you can get a low interest rate personal loan.
A good credit score is a good sign to a lender that you will repay the personal loan.
So, before you start applying for a loan directly to a lender, it’s a good idea to check your credit score. The good news is that its free to check your credit score and we have a really good article called “What is a Credit Score?” that explains what a credit score is and how you can find out yours.
Once you discovered your credit score you should work out if there is anything you can do to improve your credit score. To help you we have an article called “How do I improve my credit score?” that is well worth the read. If you can improve your credit score you’ll significantly improve your chances of getting a low interest personal loan.
If you don’t have time to find out your score, simply apply for a loan with us and we can give you some feedback on the interest rate you can get. Because we have a large panel of lenders, we can quickly check the Australian market for you. We may also be able to give you feedback on ways to improve your credit score and therefore lower the interest rate on your personal loan.
Step 2: Shop around
Don’t just accept the first loan you are offered by a lender!
The Australian lending market is really competitive, so we always encourage people to shop around and look for the best loan for their circumstances.
There are some lenders that offer really cheap interest rates on personal loans and they may save you significant money.
But before you go out an apply for a loan with lots of lenders you need to be aware of two things.
Firstly, applying for too many personal loans can impact your credit rating.
This is because an application direct to a lender will often trigger what’s called a hard credit check.
Hard credit checks are a formal credit inquiry and therefore impact your credit score.
If you apply for a loan with lots of lenders, you run the risk of seriously hurting your credit rating.
Secondly, different lenders have different lending policies.
For example, some lenders insist on a minimum time in your job before they give you a loan, some only lend to people who own a home while other lenders don’t do loans for cosmetic surgery or legal fees.
If you don’t know these lender policies you may get rejected for a loan at a lender and not really understand why. That can be very frustrating.
That’s why when searching for a low interest personal loan it’s important to use an online loan service. An online loan service can quickly scan the market and find that low interest personal loan for your situation – all without hurting your credit score.
When looking for an online loan service make sure they cover these five points:
- They must have at least 20 lenders to choose from. It’s important they provide alternatives for you to choose from so they need a large panel of lenders.
- Excellent customer reviews. You want an online loan service that will work in your best interests. Find a broker with lots of 5-star reviews. Read the reviews to get a sense of the business they run.
- An easy online process. Digital technology makes applying for a loan fast and hassle free with some online loan services. Make sure they have quick and simple online forms that can be completed in under 10 minutes.
- No upfront credit checks. This is really important. Only select an online loan service that does what’s called a ‘soft’ credit check which won’t hurt your credit score.
- A great knowledge of lender policies so they only place you with a lender that suits your situation.
At nmoni we have over 35 lenders to choose from which means we have some of the cheapest personal loan rates in Australia.
We are rated 4.9 on Google from 500+ reviews, have a fast and simple digital application form and we don’t do upfront credit checks to protect your credit score.
We also have a deep understanding of lender policies so we can place you with a lender that suits your circumstances and avoid hurting your credit score.
Beware of fees and charges!
The final point we want to make is around something many people don’t consider and that’s the fees and charges associated with a low interest personal loan.
The reason this is important is that you may be lured by some lenders with a really low interest rate.
What you might not know upfront is that there are a lot of fees and charges associated with that low interest personal loan that make the rate effectively not very good.
So, while it’s important to ensure you are getting a great rate, you also need to be mindful of the other costs of the loan.
When assessing which loan is best for you make sure you add up all the interest charges and fees right through the period of the loan. This will give you a much better indication of which loan is better for you.
We can of course help you with this because we lay out all of these fees and charges for our clients so that everything is transparent and there are no nasty hidden surprises. You’ll find it really easy to compare your loan advantages with everything fully disclosed. It’s just one of the advantages of using nmoni.
If you need a low interest rate personal loan 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 lenders and find you a personal loan that works for you and saves you serious money.
Here are some key questions we get asked:
What should I look for when comparing personal loans?
- Competitive Interest Rates. Obviously the lower the interest rate the better. Compare across many lenders or have someone do it for you (like us!) so you know you are getting a good deal.
- Fees and charges. Make sure you understand all the fees and charges associated with the loan including things like application fees, exit fees, set-up fees, monthly fees etc. Its best to add this to the interest charged over the term of the loan so you understand the total cost and how it compares to other lenders offerings.
- Extra repayments. If you do end up with some extra cash you may want to pay off that loan early to reduce your overall interest. Make sure you have this ability! We can help ensure you are offered this feature in your loan.
- Lender policies. Each lender has different lending policies. For example, some may only lend to people in a job for a certain time, or only to those that own a home. Make sure you understand this to avoid being rejected. A lender may offer low interest personal loans but not to someone with your credit profile. Our deep knowledge of lending policies helps us place you with a lender that could suit your situation.
Are there different types of personal loans?
There are several different types of personal loans:
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.