Types of Loans in Australia

types of loans australia
types of loans australia

If you want to apply for a loan as an Australian citizen, you need to know the types of loans in Australia well to find the loan that suits you and your needs better and is easier to repay for you.

Unsecured/Secured Personal Loans

There are 2 main types of loans, you will be offered secured or unsecured loans issued by the banks, credit union or private lenders to pay back from 1 to 7 years.

These type of loans offered in Australia require you to be 18 years old or older, have a good credit score and have a regular income. Applying for an unsecured personal loan, you can generally get from $1,000 up to $50,000 to repay in installments and you can use that loan almost for anything you want to. But, if you want to get a bigger amount of money with lower interest rates, you may consider applying for a secured personal loan as long as you have a valuable asset. You can receive from $1,000 up to $80,000.

You need to offer up your property as security and reduce the risk for the lender. Thus, you may get a more reasonable interest rate. But, you have to be prepared to lose possession of your asset if you fail to repay.

Car Loan

By purchasing a new or used car (up to 10 years old), applying for a car loan would be a better option rather than receiving a personal loan. If you and the vehicle you want to buy meet the criteria, you can usually get from $1,000 up to $80,000 to pay back within 1 to 7 years. You have to shop wisely and compare different lenders and their terms to get the lowest interest rate and fee.

Short Term Loan

Lastly, if you have an urgent need of cash and the amount you need to get is not that large, you may consider applying for a short term loan. Likely, as long as you have a regular income, the main point the lender would focus on would not be your credit score. You may borrow from $100 up to $10,000 to pay back within 16 days to a year. If you get approved, you generally receive the money within an hour and use the money you get for your emergency expenses, unforeseen costs and overdue bills.