Looking for cheap loans online? If you’re considering taking out a personal loan, a low repayment cost and interest rate are probably at the top of your priorities. This makes sense, because such loans are normally taken out by people wanting to get ahead in some way. Maybe it’s a better car, a new laptop, or a well-deserved holiday. But why put yourself further behind with high repayments and unrealistic financial demands? In a world of too-good-to-be-true cheap fast loans, it’s important that you are well informed. Let’s take a look at some of the key points you should consider before applying for cheap personal loans.
Types Of Cheap Personal Loans
You can potentially find cheap personal loans with or without security. Secured and unsecured personal loans offer different interest rates and are used for different purposes. We break down the differences below so that you can refer back to them when completing our checklist at the end:
|Definition||Security provided by you, such as a car or a large asset.||No security required against your loan.|
|Downsides||If you wish to use a vehicle as security, it is normally only available for cars that are less than five years old. You’ll also need to spend a little longer on the application as it may be necessary to provide the lender with the specific details and value of the asset.||It is harder to find cheap unsecured personal loans as there is no security against this kind of loan. Lenders may consequently charge a higher interest rate to cover their bases.|
What Makes A Personal Loan Cheap?
While a low-interest rate may be the first thing that stands out about a loan, it may not actually make it a cheap quick loan. Sometimes the cheapest personal loan interest rates may hide hidden fees or charges. Always check the following:
- Fees: these may be upfront like a set-up fee, or ongoing. Fees are added on to the loan amount. This means the amount of fees will affect the interest you pay and your total loan amount.
- Charges: check your loan terms. How much is the late payment fee? What will you be charged if you pay out your loan early?
- Comparison Rate: this helps you work out how much your loan is truly going to cost you. It is a combination of the interest rate, fees and charges. It is normally shown as one simple percentage that assists you in comparing loans from different lenders.
Finding The Cheapest Personal Loan Rates
Now, to add another decision to your financial checklist, you’ll need to decide what type of loan suits you best. Cheap personal loans vary from lender to lender, so you need to determine whether you’re looking for a fixed or variable interest rate. This will subsequently help you to figure out how quickly you can pay off your loan. As to be expected, these two rate types each have their own pros and cons though, so read carefully.
Fixed Personal Loans
What Is A Fixed Rate Loan? The interest rate is fixed and does not change throughout the life of the loan.
Pros? Repayment amounts are also fixed and never change, even if there is a rate increase (or decrease) in the market. This is also a good choice if rates are down at the time you are looking for cheap personal loans, as you’ll be able to secure this low-interest amount. Hence, if you’re wanting a quick loan, fixed-rate loans typically have short loan terms that are under five years.
Cons? Fixed rate loans often don’t allow you to make extra payments or finish the loan term early. If they do allow you to do this, you will probably be charged fees. Sometimes lenders also put a limit on how much extra you can pay.
Variable Personal Loans
What Is A Variable Rate Loan? The interest rate can increase or decrease throughout the term of your loan.
Pros? Variable rate loans typically don’t charge any early payout fees, and you can also make extra payments without consequence. These kinds of loans often provide you with a low repayment amount over a short period of time. Therefore, variable rate loans are great if you don’t plan on keeping the loan for a long time. Short, quick and cheap.
Cons? Since we are talking about cheap and fast personal loans, a drawback is that the loan term for a variable rate loan is normally longer. While a seven to 10-year term may be more manageable for some, it is not really the definition of fast. The main downside to variable rate loans is that the rate may increase during the term of your loan. If there is a massive rise in interest rates in the market, your loan could very easily become more costly as your repayment amounts could dramatically inflate.
Other Features To Consider
When looking at cheap personal loans online, there are also several other things you should investigate:
- Amount: Some lenders have a minimum or maximum borrowing amount. This amount won’t always match your needs or budget. Consider your actual loan amount, including fees, and whether or not this will be affordable.
- Repayment Flexibility: Paying fortnightly rather than monthly can be beneficial if your lender allows it. You could pay off an extra $1000 without even noticing. For example: 12 months x $1000 per month = $12,000 per year, but 26 fortnights x $500 per fortnight = $13,000 per year.
- Redraw Facility: Some loans offer you the ability to redraw the additional repayments you’ve made. This may be beneficial in emergencies, however accessing this facility will cause you to pay more interest and extend your loan period.
- Loan Terms: Short or long? Longer loan terms of five to seven years may seem attractive if you want a more affordable payment schedule. The longer you stretch out your loan though, the more interest you will pay. Often shorter-term loans, say one to two years, will be cheaper.
- Too-good-to-be-true Promises: The world of personal loans is littered with catchphrases like approval guaranteed! No credit checks! Yet this is often not the case. Apply with us! At Friendly Finance, we work to find lenders that are ready to give every Aussie a fair go.
- Compare The Pair: Do your own comparison online first to see what’s out there.
Sometimes Bigger Isn’t Best
Historically, Aussies have always relied on their local bank branch for all of their financial needs. This is no surprise when you look at the dominance The Big Four continue to have over our market. This decade though has given rise to the online-only bank, providing consumers with hundreds of convenient lending options. No bricks and mortar can equal big savings for you.
Smaller lenders can potentially offer cheap personal loans thanks to lower interest rates and better customer service, giving you the personal attention and help you need. They are also more likely to offer more flexibility with their loan terms and conditions. While smaller lenders generally have limited options available, it’s worth considering if a small personal loan from a smaller lender is right for you. When you apply with Friendly Finance, our team works hard and fast to find you a lender that can give you a fair go. Save yourself the hassle of finding a lender, we’ll do the hard work – all you need to do is apply!
Are You Eligible?
To apply for our lender-finding service, just tick-off all the requirements below:
- You must be over 18 and have proof of identity
- An Australian citizen or permanent resident
- Earning a regular income
- Have the ability to manage a loan i.e. provide details of your assets and employment information
If you meet this criteria, then we could help you to find cheap small loans!
Additional Fees and Charges
It’s important to note that there may be additional fees and charges attached to cheap personal loans. As mentioned above, it is crucial you look into what costs may be incorporated into your future loan contract. All charges will, of course, be outlined in your loan contract prior to approval, so ensure you have read through the agreement thoroughly before signing. If you do have any questions regarding the terms and conditions of your loan, you must contact your lender directly. Friendly Finance is only an intermediary, so we do not have any say in the specifics of the loan agreement. Usually, the lender will be able to answer any questions you may have.
Friendly Finance: The Lender-finder For You
By this stage, you may be feeling a bit overwhelmed. There are plenty of online lenders to choose from, so how do you know you’re making the right choice? You don’t. However, with Friendly Finance on your team, we could find you a lender that is ready to help in no time. Just complete a quick application – it only takes a few minutes and we’ll do our best to find you a lender that can offer a cheap personal loan online. Just scroll up to begin your lender-finding journey today.
Ready to apply? Just scroll up to find our loan calculator. Choose your loan amount and click apply now. Once you’ve filled in the application, we will put together all of your details and use our lender finding service to find a lender that can give you a fair go. Your lender will then be in touch to finalise your assessment. We search the market for the best cheap personal loans so you don’t have to!
Get In Contact
Have some more questions about cheap personal loans? Want to know more about consumer finance in general? Head over to our comprehensive FAQ page! There, you will be able to find further information not only on Friendly Finance’s lender-finder service, but also general consumer finance topics like bad credit and insurance. Alternatively, you can check out the Friendly Finance blog for all the latest in finance and lifestyle tips.
Still can’t find what you’re looking for? To reach us directly, head to our Contact page.
Friendly Finance is a lender-finding service. We do not offer financial advice. Consider seeking independent legal, financial, taxation or other advice to check how the information and ideas presented on this website relate to your unique circumstances.