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In today’s diverse financial landscape, localised loan options have become increasingly important.
At Friendly Finance, we specialise in connecting you with the best local loan options across various Australian cities and states. Our platform offers a comprehensive loan search, providing access to a wide range of consumer financing products, including personal loans and short-term loans. By partnering with numerous financial institutions, we ensure you get the most suitable and competitive loan options tailored to your specific needs and location.
Whether you are looking to buy a home in Sydney, finance a car in Melbourne, or secure a personal loan in Brisbane, Friendly Finance is here to guide you through the process, offering a seamless application experience. Explore our services and get the funds you need today!
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Principal, interest, instalment repayments, and term are the four main characteristics that all loans generally share. You can determine if a loan will meet your needs and whether you can afford to take one out by understanding each of these variables.
- Principal: This is the sum of money you borrow from a creditor or lender.
- Interest: The interest rate determines how much you must pay back on top of the principal. The type of loan you are applying for, how long it will take you to repay it, and your credit score are all taken into account by lenders when calculating your interest rate. The interest rate is not the same as the annual interest rate (p.a.), which also takes into account additional expenses including upfront fees.
- Instalment payments: Loans are typically repaid to the lender monthly. Usually, your monthly payment is fixed, so you always know how much will be deducted from your account each month.
- Term: The length of time you have to pay back the loan in full is known as the loan term. The length might range from a few weeks to several years, depending on the type of loan.
Secured loans and unsecured loans are the two main types of loans.
For secured loans, the lender often places a tangible item, such as your home or car, as collateral in case you are unable to repay the loan in full. The interest rate is determined by the asset, your credit history and score, and the lender. Generally speaking, secured loans have lower interest rates than unsecured ones.
Your interest rate for unsecured loans is determined by several financial factors, including your income, credit score, and total debt. The lender can sue you in court to recover the money if you don’t repay the loan as arranged. Nevertheless, it cannot seize any of your assets if you don’t. Also, the lender has the right to report the default to the credit bureaus, which will damage your credit rating and limit your future loan options.
Compared to secured loans, unsecured loans often have higher interest rates and lesser loan amounts.
With a fixed interest rate, both the interest rate and the instalments on your loan are set and unchanging. Your monthly repayment amount will be accurate and deducted from your bank account each month.
Your car loan repayments may change if interest rates change with a variable rate. You will have to make larger payments if interest rates increase. Your repayment obligations will also decrease if interest rates drop.
