Personal Loan Repayments – Repaying What You Owe

Personal loans and personal loan repayments, what are they? Personal loans are some of the most convenient loans on the market. However, it is important to understand how they work. Arguably, repaying your loan is the most critical factor in loan success – once you have your money. You should know how to make your personal loan repayments, but also how doing so (or not doing so) can affect you.

Whether you’re seeking no credit check loans, small loans, or fast loans, you should know the ins and outs of repaying. Let’s discuss personal loans and how you can use them to your advantage in the safest way possible.

Please note that specific ideas and products presented in this article may not be on offer by Monzi or the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What are personal loans?

A personal loan, like any other loan, is a cash deposit a lender can grant you. You are then required to repay it plus interest over a certain period. There are several differences between personal loans and other loan types. The first is that personal loans, sometimes called private loans, can be granted by private lenders, not just financial institutions. The second is that personal loans are usually smaller in size as they can be taken from private lenders; you are less likely to attain a mortgage loan from a private lender. Finally, you can use a personal loan for almost anything.

These things allow personal loans to be more accessible to a variety of individuals. Private lenders in particular can offer far more flexible criteria than financial institution’s. This means that if you have poor credit, you may have a better chance of obtaining a private personal loan than any other loan type. If you have poor credit, you may only be able to borrow a small amount which means that your personal loan repayments may only have a short term. Regardless, personal loans can stand in the place of many other loan types with far fewer criteria to meet.

What are personal loan repayments?

Personal loan repayments are just like any other loan repayments. They depend on the size of your loan, your interest rate, and loan term. Essentially, you may have a loan term of typically two to seven years (depending on your lender and the loan amount). You will make small monthly personal loan repayments to your lender throughout this period, plus interest until you no longer have any outstanding debt. If your loan is larger, the amount of time you have to repay it will be longer.

As personal loans are typically smaller, however, it usually won’t take you too long by loan standards to complete your repayments. Unlike personal loans, home loans are quite large and may take up to 30 years to repay. Providing you meet all your repayment obligations promptly, you shouldn’t incur any consequences.

How do personal loan repayments vary from other loans?

As above, your personal loan repayments may vary from other loans due to the length of their term and the accompanying interest rate. The term is the loans lifetime and can be quite short. Personal loans aren’t as short as the potential 16 day repayment period for payday loans online. However, in comparison to the large loans available on the market, a term of only three or four years is quite minimal.

Some personal loan lenders may have higher interest rates. This is as the interest rate on your loan protects your lender in the instance that you are a perceived risk to them. If you have a better credit score, your interest rate may not be as high. However, this is dependent on the lender and how they operate. Generally, this is the reason that personal loans have the stigma of high interest rates. Because these lenders may be willing to work with bad credit and they need to protect their money.

How much will your personal loan repayments be?

It’s hard to make a good judgment on what your personal loan repayments might be as they depend on several factors. When you apply for a loan, your lender will tell you what your repayments will look like. They should be the sum of:

  • What you’re looking to borrow
  • How many years you would like to repay your loan in
  • How frequently you would like to repay, i.e. weekly, fortnightly, monthly
  • What you would like your interest rate to be, i.e. fixed or variable

If your credit history isn’t so good, you may receive a rate that is in line with the market standard. If your credit report looks excellent, then your rate may be decreased. When it comes to the lenders in the Monzi network, you can get a base idea of what your loan might look like on our homepage. However, each lender operates differently, and you will have to speak with the lender you match with for further information.

Personal loan repayment calculator

If you want a visual of what your repayments could look like, you do have the option of a personal loan repayment calculator. Essentially this is a free tool that you can find online that will allow you to input the above information and receive an estimation of what your personal loan repayments might look like.

These calculators are offered by several providers, particularly some of the more popular banks. Just because a bank offers a repayment calculator does not mean you have to use their services. Keep in mind that the amount generated is not concrete and you should not start strictly budgeting for it if you haven’t spoken to a lender yet. Rather, use it as a way to figure out whether you can afford the amount you are hoping to borrow.

Once you input the information mentioned above, the calculator should tell you:

  • Your minimum repayment
  • The total interest payable
  • An example rate
  • A loan term

This is so you can gain an idea of what you might be repaying each month. However, don’t put too much weight on this information, as it may vary based on what your lender has to say.

Personal loan repayment schedule

The schedule for your personal loan repayments is how frequently you repay your loan. Depending on your lender, you may be able to choose when you would like to make your repayments. Either weekly, fortnightly or monthly. This may also be loan type applicable.

For example, you may only have the option to repay a payday loan weekly due to how small it is. Or, perhaps you can only repay a home loan monthly as the repayments are usually quite large. You may be able to agree on a varying schedule depending on your lender. However, this is not guaranteed, as most lenders look to stick to a consistent structure.

Can you repay a personal loan faster?

Yes. If you are in the appropriate financial position to make your personal loan repayments faster, there are some ways to do so. These include:

  1. Increasing your repayment amounts. Depending on what kind of rate your loan has, you may have the opportunity to agree with your lender to repay more each month.
  2. Again, depending on your loan type and your lender, you may be able to make additional repayments. This can mean that if you have some extra cash left over at the end of the month, you can put it towards your loan.
  3. Change the frequency of your personal loan repayments. You may have the option to switch from paying monthly to paying fortnightly to condense your loan term.
  4. Increase the frequency and the amount. If you want to fast track your loan and have had some life changes that allow this, why not increase both?

A variable interest rate will usually give you the desired flexibility to easily make changes to how you repay your personal loan. If you currently have a fixed loan, you may be able to refinance a personal loan to allow yourself to make extra repayments. A refinance calculator may help you make this decision.

How do repayments change?

There are several ways your personal loan repayments could change. For example, if you think you originally want to borrow $2,000 and then decide to borrow $3,000 without changing the loan term, your monthly repayments will increase in size.

Alternatively, if you opt for a variable rate loan and this rate fluxes, you are also going to see either an increase or a decrease in the size of your repayments. The state of your credit score could also influence your personal loan repayments. Hence, a repayment calculator may not be the most reliable as there are an abundance of factors that could alter what you pay.

Personal loan extra repayments

If you would like to finish your personal loan repayments sooner, you do have the option of paying extra. Most lenders will allow you to contribute extra towards your loan when you like. Speak with your lender to investigate whether they permit this and how this could take place.

Alternatively, if you have just had a pay rise at your job, you may realise you can continuously pay extra. If this is the case, it may be wiser to speak to your lender about increasing your repayments rather than contributing extra here and there. Consistency can help you repay your loan faster, in this case.

What happens if you can’t repay your loan?

Sometimes, life hits hard. If you lose your job or fall ill and find yourself unable to repay your debts, you will want to act fast. The first thing you should do is contact your lender. Most lenders can offer payment plans or repayment freezes, providing you can prove your situation to them. This may help you to get through the upcoming months without financial stress. Your payments may then resume once you reach a previously agreed date.

If the situation is slightly worse than this, however, and you truly cannot repay your debts. You may want to reach out to the National Debt Helpline and seek some free financial advice before making your next move. You may be able to take debt agreements or Centrelink grants to help you get on top of your debt. The Government’s MoneySmart site has an informative page on urgent help with money that may be useful to read. Finally, if all else fails, you may need to consider declaring bankruptcy and wiping the slate clean. However, you should avoid this as it may bar you from certain aspects of life in the future.

If you are already receiving Centrelink payments and are truly desperate, you may have the option of loans for people on Centrelink. However, ensure you try all the other options before turning to this.

Can you put personal loan repayments on hold?

Yes, depending on your lender and your circumstances, you may be able to pause your personal loan repayments. This is generally called a repayment freeze. Essentially this means your lender may agree to freeze your repayments for an agreed-upon period, appropriate for your situation. Typically, for this to occur, you may need to provide evidence of your situation, such as a medical certificate.

Monzi cannot say what the procedure is for the lenders in our network. However, all our lenders should be able to work with you in some capacity to try and minimise the burden, should things go sour with your private life.

Making personal loan repayments

Why is it smarter to repay your personal loans fast?

As with any loan type, it is smart to do your best to repay your loan promptly or as fast as you are capable. This is because the longer you have an outstanding loan, the longer you are also paying interest.

If you take a large personal loan and are slow with your repayments and let it drag out, you will be allowing this interest to stack up. This could result in you paying hundreds more on your personal loan repayments. Or, if it is a home loan, you could end up paying thousands more than planned.

How is your credit score affected by your repayments?

Your credit score can be either positively or negatively affected by your personal loan repayments. This depends on whether you are timely with your payments or not. For example, if you can meet all your repayment deadlines and pay the full required amount, this is going to aid the state of your credit.

On the other hand, however, if you fail to meet the deadlines and your payments are either late or missed altogether, this is going to affect your credit. This information can display as a default, lasting on your credit report for quite some time, meaning you may struggle to get future loans. Consider how desperately you need credit before applying.

How fast can you receive personal loan approval?

Monzi can’t speak for every lender regarding personal loan approval times. We can, however, tell you how we operate. When you apply with Monzi, if you place your application during business hours, we may be able to match you to a lender in as little as 60 minutes. Please note that whilst you can apply any time 24/7, you can only match with a lender during office hours. This means that if you apply on Friday night, you may need to wait until Monday morning for an outcome.

If this takes place in the morning and your lender contacts you promptly, you may be able to attain same day approval loans. However, note that banks can only process transfers during business hours, and there may be a delay between receiving your approval and seeing cash in your account. This process has the potential to be quite fast, meaning when you need quick loans now, Monzi is available to help.

How soon will you receive the cash?

As mentioned, it may be quite difficult to get same day loans, even if you do get same-day approval. This is because your cash loans may rely on cross-bank transfers. Banks cannot process these transfers outside of business hours, meaning it may require some patience on your part.

Regardless, this is still much faster than you would receive money when working with traditional bank loans or larger loans such as home loans.

Where to get short term personal loans?

Short term loans are generally small personal loans. Small loans typically only come with a repayment term of around a year in length. These loans can typically double as payday loans, emergency loans, or loans for small costs such as a bond loan.

If you have an average credit score Australia, you are most likely going to have the best approval chances if you apply for a small loan. When you match a Monzi lender, they may find that you don’t qualify for your desired amount. Although perhaps you do have the capacity for a smaller amount. If so, they may be able to counteroffer you. We can’t guarantee that all our lenders will do this, but it does mean that you can still walk away with some money rather than no money.

Can you get long term personal loans?

On the other hand, long term personal loans are often for larger personal loans. Your personal loan repayments on a large loan will most likely be over multiple years. In some cases, your interest may also be lower due to the time frame you will be working with.

If you seek large personal loans, you may need to undergo a credit check. It is usually only smaller sized loans that allow you to forgo a credit evaluation. However, if you are unsure, check with your lender for their policy.

What other calculators are available?

There are several other similar tools to the personal loan repayment calculator available for you to use. They help make financial decisions easier, although, are only estimates and should not be taken as exact figures. Other handy calculators include:

These are just a few examples. However, they can make life far easier. Other ways to improve the experience of choosing a lender include the use of comparison tools. You can find a free personal loan comparison tool online that can help you easily view all your options. This involves the interest rates, personal loan repayments, terms, and any extra fees. Once you narrow your options down to one or two, you can contact those lenders directly for more information.

Or, you could apply through the Monzi lender-finder. We can do all that on your behalf in as little as 60 minutes. Once we match you, all you’ll have to do is wait for your lender to get in contact with you. Easy as!

What would you use a personal loan for?

The beauty of personal loans is that you can use them for just about anything you like. As they often have more relaxed criteria, it becomes easier for them to stand in the place of many other loan types. Whether for a car loan, caravan loans, or a travel loan, personal loans can boost your funds to get any jobs you like done.

These loans can be very convenient alternatives to more specific loan types. Providing you can stay on top of your personal loan repayments. Not to mention their accessibility. Traditional bank loan criteria don’t only prevent people with poor credit from taking a loan. It also stops people from other walks of life, such as single parents, people with disabilities and small business owners. Not only this, but you may also be likely that you’ll receive better customer service through a small private lender.

There are many reasons why people turn to personal loans from non bank lenders. However, the best description for these types of loans is that they can be accessible to anyone who needs them. They can be for whatever reason you may have.

Monzi lenders and credit checks

Speaking on inclusivity, the lenders in the Monzi network can listen to you and your situation. However, in some circumstances, you may be able to request that your lender doesn’t perform a credit check. Your lender may not require a credit check for their process. This is a great way to be judged on your current circumstances, not your past.

When a Monzi lender chooses not to conduct a credit check, they will instead look at several other aspects. These include your income and expenses over the past three months. Along with the stability of your job and any debt you may be in. Meaning that you will receive a fair evaluation to ensure you can make your personal loan repayments.

However, if your lender does need to conduct a credit check, this may not be the end of the world. They will also look at everything else in your financial and personal life to evaluate whether you can repay. And, in some instances, you may also have the option of bad credit loans.

Collateral and deposits

When it comes to most loans, you are likely to encounter either collateral or deposits. Maybe it’s putting down a percentage of the loan to value ratio to avoid lenders mortgage insurance for a home loan. Or securing a car loan against the vehicle. You will likely encounter security at some point.

Monzi cannot say what all personal loan lenders will require when it comes to securing your loan. If you seek an amount over $2,000 through a Monzi lender, you may have to submit some form of collateral.

You can speak with your lender about their requirements for collateral when they get in contact with you. Hopefully, after being matched through the lender-finder.

Monzi and personal loan repayments

Monzi cannot say what your personal loan repayments for the lenders in our network might look like. If you are looking for an example of how your loan might look, you can find this on our home page. Please note that this is just a guide and may vary by lender.

Monzi may be able to save you the hassle of finding a personal loan lender independently. All you have to do is begin an application. You can click ‘apply now’ or scroll up to our loan slider at the top of the page.

If you have any questions before doing so, don’t hesitate to contact the team. We’re happy to help with any queries you may have; just reach out to us at hello@monzi.com.au.

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Factor In

Costs

Two credit cards
Two credit cards

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months (minimum)

12 months (maximum)

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. The minimum and maximum loan term is 12 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Loan amount

$2,001 - $4,600

Terms

13 months (minimum)

24 months (maximum)

Costs

48% Annual Percentage Rate (APR)

67.41% Comparison Rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principal Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Annual Percentage Rate (APR) for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. The minimum loan term is 13 months and the maximum loan term is 24 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months (minimum)

24 months (maximum)

Costs

21.24% Annual Percentage Rate (APR)

48% Comparison Rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principal Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Annual Percentage Rate (APR) for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. The minimum loan term is 13 months and the maximum loan term is 24 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.