The way personal loans work is similar across lender platforms, with some differences in their terms and conditions. These are the operations you’ll find on all platforms:

• Choose a personal loan type. All the types of loan available are grouped in two major categories: secured and unsecured. Restriction and terms depend on the type of loan you are taking. For example, if you are taking an unsecured loan, you won’t need collateral. You can also use the loan for almost anything you want, since your lender is only interested in your ability to pay back the loan.
• Loan period. The loan period (or term) will be an agreement between you and your lender. You will tell them how long you intend to take before you complete your repayment. If you both agree, you’ll sign the contract. Most of our lenders require you to repay within 5 years.
• Loan interest. This is the extra amount you have to pay along with your loan calculated in percentage; it can be fixed or variable. In addition to the annual interest rate, you may pay some extra charges. These extra charges may include monthly fees, yearly fees, and establishment fees. Your lender may also charge you for early or extra repayment.
• Loan contract. Before you take a loan offer, you’ll need to sign a contract with your lender. The contract states your interest rate, amount you’ll repay, and the period. Be sure you agree to the terms and conditions stated before you sign.
• Application and approval. Before any process begins, you’ll have to apply to a lender. You can compare personal loans here in a few minutes, instead of scouting the internet yourself. With offers tailored to your needs and circumstance, you then apply to a lender and wait for their approval.

There are two major types of personal loans -- secured and unsecured personal loans. Secured personal loans require you to pledge a valuable asset which can be a property that you already own or the one you intend to buy with the loan you’re taking. Unsecured personal loans are not secured by any asset. You are only obligated to pay by the contract you signed, but payment defaults will affect your credit history. You can use unsecured loans to solve a range of problems that don’t need a secured loan. Other types of personal loans come under these two. They include:

• Line of credit loan - With this type of loan, your lender provides a certain amount for you to access. You only pay interest on the amount you use from the loan.
• Overdraft - Your lender or bank allows you to withdraw up to a certain amount when the money in your account finishes. Once there’s money in your account, the lender takes back their money.
• Debt consolidation - Debt consolidation loans allow you to pull all the money you owe in one place and pay them off gradually. Your interest rate and extra charges will be less now.
• Bad credit loans - If your credit score is bad, you can opt for a bad credit personal loan. Some lenders are willing to take people with bad credit.

You can get funds from our lenders on the same day. Some lenders are able to process and send the funds immediately, if they accept your application. It can take between the hour and up to 24 hours, depending on the lender. When you receive an offer, check the terms for how long you’ll wait to receive funds. Only proceed if you agree with the term.

The average interest rate on a personal loan depends on the type you take. Secured loans have a lower interest rate (8% - 12% annually) compared to unsecured loans (12% - 14%). The rate you get will also depend on your personal circumstance and how much risk your lender thinks you pose.

You can buy a car with your personal loan. An unsecured car will enable you to buy a car without using it as collateral while a secured loan will allow you to stake any property to the loan. You’ll usually use these loans if your car loan application does not go through. A car loan authorizes the lender to take back the car if you are unable to meet up with the obligation.

The interest rate on your loan has changed as a result of an adjustment in the official cash rate issued by the Reserve Bank of Australia. The cash rate change affected you because you have a variable interest rate on your loan. Variable interest rate means that your interest charge could go up or come down, depending on what the cash rate is. You can opt for a fixed interest rate if you prefer to keep your monthly repayment steady. But, this will stop you from getting the perks that come with lower cash rates.

You can borrow as low as $2,000 and as high as $50,000. The amount you should borrow depends on what you need the money for. For example, if you want to buy a car, you should check how much you need for the car plus your insurance cover. Also, you should consider your financial situation, how much you can afford to repay termly, and how long you need to pay back the money.

You don’t have to state what you need a loan for if you’re taking an unsecured loan, except your lender demands to know. For a secured loan or car loan, you have to state what the loan is for. Your lender wants to know that you’re using the loan for the reason you took it. Besides, you may need to pledge the property you’re getting for a secured loan. It’s always best to be sure you have good intentions and proper plans when taking out a loan.

Students can get a loan without a credit history. However, these loans are expensive because lenders consider them to be unknown and a risk to the business. No credit history is better than bad credit, but both receive high interest rates. Taking a student personal loan can help you build your credit history and improve your chances of getting low rate loans in the future. Be careful to borrow what you can repay promptly.

Your credit score is important because it tells your lender how you behave as a credit consumer. It tells them if you repay your loans in time and how often you have to borrow. With a good credit score, more lenders will be interested in your business. They’ll offer you low rates so that you can choose them. The reason is that they believe, through your history, that you’ll repay in time and in full. With a bad credit score, lenders will take your business as a risk. As a result, you’ll get high-interest rate offers because lenders are protecting themselves from you.

You should compare personal loans based on how they fit your needs and how competitive they are. These are the features that you should compare:

• Flexibility. Will the lender charge you for early or additional repayments? Will additional repayment reduce the interest you have to pay?
• Is the interest fixed or variable?
• Is the loan secured or unsecured? Decide if you want to stake an asset to the loan. Then check which lender will offer the type of loan you want.
• Is the rate competitive? Run your details through our platform to get a list of offers from lenders without affecting your credit file. You can see which lender’s offer gives you the best value for your money and time.

You can repay your personal loan using direct debit or internet transfer. It’s best you start the process a few days ahead of your due date so that you have enough time to complete the process. If you decide to make additional payment or early repayment, you can use internet transfers as well. In the case where you are short of money during a repayment period, ensure that you get across to your lender and work things out as soon as possible.