Personal loans could be a great way to cover an unexpected expense or make a dream a reality. It can, however, be difficult and time-consuming finding the right lender online. In addition, it may be tempting to apply with lenders offering easy payday loans. Monzi is, therefore, here to fill you in on personal loans and our lender-finder service.
What exactly are personal loans?
These loans can be used to cover most personal expenses. In other words, you can use your personal loan to help pay for something special, or to cover an unexpected cost. As a result, you can use a personal loan for almost anything from a holiday to covering rental bond or even car repairs.
Usually, these loans will have repayment periods ranging from several months to years. The repayment terms will usually be determined by the loan amount. In addition, borrowers will also need to pay interest, as well as fees and charges on top of the loan principal.
Before we get any further, we thought we had better introduce ourselves. We’re Monzi Loans, a lender-finder service run by Aussies for Aussies. We’ve made it our mission to connect people all over Australia to the lenders they need.
What do we do? In short, we make finding fast finance online a breeze.
When you use Monzi’s lender-finder service, you simply fill out one online submission form. From there, we scan through hundreds of different loan products and try to pair you with a lender who can help – potentially all within minutes. Pretty easy, right?
Gone are the days of spending hours on hold, or waiting for weeks to find out if you’ve been approved for a loan. Put simply, if you’re frantically googling, loans near me, then Monzi is the lender-finder that could help. No matter where you are in Australia, Monzi can always try and pair you with a lender.
Personal loans vs. payday loans
Australia is experiencing a rapid rise in the number of people moving away from the banks, and towards alternative lending options online. After all, it’s not hard to see why. Traditional lenders like banks are, especially, becoming much harder to qualify for.
Online lenders are, however, not all the same. The distinction between a personal loan and a payday loan is important for consumers to be aware of.
|Personal loans||Payday loans|
Which banks give personal loans easily?
Most banks will offer personal loans to borrowers. It must be noted, however, banks often have much more stringent eligibility criteria than other lenders.
If you are, in particular, receiving Centrelink or have poor credit, qualifying for a loan from a bank may feel almost impossible. As a result, many Australian consumers are turning to alternative financing options.
Are you wondering where is the best place to get a personal loan? The answer simply depends on your individual situation and circumstances.
If you, however, wish to find out exactly how bank loans work, it may be a good idea to get in contact with a bank directly.
When you apply with a bank, what do they look at?
Generally, banks will ask you to provide copies of your:
- bank account statements; and
- copies of other credit contracts or bills.
In addition, banks may pay close attention to your credit report.
Your credit report includes information about your credit history, collected from credit providers, courts and other organisations. All this information is then compiled by credit reporting agencies. In short, your credit report and score give lenders an idea of how trustworthy you are as a borrower.
Banks will consult these documents to verify your ability to afford the loan’s repayments. This is because all credit providers are required by law to assess your suitability towards a loan. In short, it is illegal for lenders to lend you credit if they know it is unsuitable for you.
How do personal loans work?
Generally, you will repay your loan in weekly, fortnightly or monthly instalments over the repayment term. Your repayments will normally include the principal loan amount plus any fees and interest. Finally, a direct debit will often be set up from your account, and your repayments will come out automatically until your loan has been fully repaid.
How is the interest calculated on my loan?
When you apply for a personal loan, there are certain factors that will affect what you will be charged:
Principal amount: The amount you’re looking to borrow will affect what rate you’re charged. For example, the interest on a small unsecured personal loan ($2,000 or under) will often be higher than that of a larger loan.
Security: Larger loans may be secured loans. In short, attaching security to a loan reduces the risk posed to the lender. As a result, the lender may charge a lower rate.
Credit history: Your credit history may also affect the interest rate you’ll be charged. In short, if you have a better credit score, you will be seen as a less-risky borrower. Inversely, if you have a lower score, lenders may perceive you to be higher risk.
What is a comparison rate?
A comparison rate makes it easy for borrowers to get a better idea of the true cost of their loan. In addition, comparison rates make it easy to compare loan products from different lenders.
A comparison rate is calculated by taking the interest plus most of the fees and charges and reducing them all down to a single percentage figure.
Comparison rates are useful because, otherwise, it can be difficult to compare different loan products.
A simple example of how comparison rates are calculated is included below:
|Interest rate||Fees & charges||Comparison rate|
Personal loan rates – fixed and variable
Some lenders may offer both fixed and variable rate loans. As a result, you may wonder which rate is the best option for you. You will, however, need to assess your own situation and what you value as a borrower.
Fixed rates, as the name suggests, stay the same throughout the life of your loan. In other words, your repayments will stay the same. Fixed rate personal loans offer stability, and can make it easier to budget.
Variable rate loans, on the other hand, charge a rate that is subject to change. Therefore, your repayments may change throughout the life of your loan.
To conclude, choosing between a fixed and variable comes down to personal preference and the costs and benefits of each choice.
How do I find a low interest loan?
Low interest loans are what every borrower is, ideally, looking for. However, finding one is more difficult than it sounds. Put simply, there are a myriad of variables at play that may affect the rate you’re charged.
For example, unsecured and secured loans will vary in the rate charged. In addition, your credit score may affect what you end up paying.
Although, there are a few steps you could take to help improve your chances of finding a loan you’re happy with.
- Know your credit score: Your credit score may affect which loans you will be approved for. Therefore, understanding your credit score gives you a better idea of where you stand.
- Get documents together: Having all relevant information (assets, income, debts and expenses) will help you prove you can comfortably afford the repayments.
- Compare online: Shop around on the internet and compare different lenders. Additionally, there are many comparison sites that make this process easier.
So, while everyone is looking for low rates, there is no sure fire way to find the best loan rates Australia.
What else do I need to consider?
It may be tempting to focus solely on the comparison rate when comparing personal loans. There are, however, other loan features that you should consider. In short, it is important to reflect on what you value as a borrower.
Is this loan type correct? There are different types of personal loan, therefore it is important to consider which loan type of best for you. For example, weigh up whether you would prefer a secured or unsecured loan.
Does this loan come with extra features? This could be in the form of a convenient mobile app, the ability to redraw additional money or even frequent flyer points.
Am I eligible? Certain lenders will have different eligibility criteria. Therefore, it is important to examine all relevant criteria and make sure you are eligible.
Is the loan flexible? In other words, are you able to make changes to the loan terms if your lifestyle changes?
Easily find personal loans online
Everything these days is moving online, and finding quality finance is no different.
However, as you may notice, there are a lot of lender options available online. In addition, it can be difficult to know who is legitimate and who is less-than-reputable. Furthermore, you may find yourself applying with multiple lenders, which can, in turn, hurt your credit score.
Luckily, Monzi is here. We make it easy to find fast finance online. In short, we’ll scan through hundreds of loan products to find you a lender who may be able to help. We can, generally, do this all in the space of a few minutes.
Interested? Well, here’s how to apply:
Our online application process couldn’t be simpler. All you need to do is take a few minutes to fill out our online application form. We ask a little bit about you, your circumstances, and your reasons for needing a loan. In addition, there’s no paperwork – just a few simple answers which you can complete from the comfort of your own home. After you hit submit, that’s the hard part done. From there, it’s up to us to do the rest!
We get to work
We work with some of the best online lenders in Australia that can offer a huge range of different loans to a variety of people. Once we’ve received your application form, it’s our job to search through these lenders to find one that might be able to offer you a loan. Because this is automated, you can expect to hear from us soon. If you apply in normal business hours, we could get back to you on the same working day, sometimes even as quickly as within an hour!
It’s a match!
If we’ve found you a match, we’ll be in touch. Next, we will pass on your details to the lender so they can contact you directly.
Your new lender will now conduct their own assessment of your application. If you’re approved, you should be sent a contract which you will need to sign if you’re happy with the terms. Finally, from there you will set up repayments via direct debit.
Am I eligible?
To use Monzi’s service, you will just need to make sure you meet our eligibility criteria. Therefore, before getting started, just make sure you:
- are 18-years or older;
- hold an Australian Citizenship or Permanent Residency;
- have a personal email address and mobile number; and
- have been receiving income into a personal bank account for the last 90 days.
But, what if I have bad credit?
If you have poor credit, you may have been knocked back by traditional lenders in the past. Indeed, loans from lenders like banks and credit unions can be difficult to be approved for, especially if your credit is lacklustre.
Monzi, on the other hand, works with a network of lenders who can look past your bad credit. After all, both Monzi and our network of lenders understand you’re so much more than a credit score.
With this in mind, we’ve employed some of the latest in safe-banking technology, to give your application the shine it deserves.
When you fill out our online form, we’ll ask for your online banking credentials. As a result, we are able to securely access a read-only copy of your bank statements. We can, therefore, pass this on to a potential lender. If a lender can see you’ve been receiving a regular income and have been responsible with whatever other repayments you may have, you may be considered for approval.
So, if you have poor credit but are looking for a personal loan, Monzi may still be able to pair you with a lender. You could, additionally, apply for a loan of up to $10,000.
Will Monzi conduct a credit check on my application?
No, Monzi will not conduct any credit check on your application.
Keep in mind, however, that this is because we are the lender-finder. The lender we pair you with, on the other hand, may conduct one.
As we mentioned above, however, Monzi works with lenders who could look past your credit score. Therefore, even if they perform a credit check on your application, you may still be approved.
I have a credit score of 550 – is it possible to get a personal loan?
The importance of your credit score will vary from lender to lender. Usually, traditional lenders like banks and credit unions will put much more importance on your credit score. Therefore, it is important to understand how your credit score will be interpreted by lenders.
A table outlining the different credit bands is displayed below:
|Excellent||800 – 1,000||833 – 1,200|
|Very good||700 – 799||726 – 832|
|Good||625 – 699||622 – 725|
|Fair / Average||550 – 624||510 – 621|
|Weak / Below average||0 – 549||0 – 509|
Having a credit score of 550 puts you within the bottom 21-40% of the credit-active population. In other words, a score of 550 infers that it is likely you will incur an adverse event in the next 12 months.
However, having a credit score of 550 does not automatically disqualify you from being approved for personal loans. Admittedly, it may be difficult to be approved for a loan from a traditional lender like a bank or credit union with this credit score. Monzi, however, may be able to pair you with a lender who could say yes!.
Okay, but I’m receiving Centrelink
Yes! Monzi can still try to pair you with a lender.
After all, we work with a wide network of lenders who may regard Centrelink as a form of income.
You will just need to show you have been receiving regular Centrelink payments for the last 90 days. So, when you are applying, you may be asked to supply your myGov details.
Are there guaranteed approval loans in Australia?
Have you been searching online for bad credit personal loans guaranteed approval Australia?
Unfortunately, it would be illegal for a lender to offer a guaranteed approval loan. And, any lender that does, should be treated with caution.
It is, after all, illegal for a lender to offer a loan product that would be unsuitable for the borrower. The Australian Securities And Investments Commission (ASIC) has outlined a number of responsible lending obligations that credit providers must adhere to.
In short, these obligations have been designed to prevent lenders from offering, suggesting or aiding a consumer in applying for a credit contract if it is unsuitable for them. Credit providers are, amongst other things, expected to make inquiries into the consumer’s financial situation. In addition, credit providers are expected to make an assessment as to whether the loan product is not unsuitable for the consumer.
To conclude, any lender offering guaranteed approval is obviously not making any assessment of your suitability towards the loan product. In other words, they are not complying with responsible lending practices.
When you use Monzi, you can be assured we will only pair you with licenced and responsible lenders. As a result, you don’t need to worry about being taken for a ride.
Get started today
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