Life can be full of surprises—and sometimes they can be expensive. Whether you’re planning a big trip, a home upgrade, or your dream wedding, a personal loan can help you cover the cost when you don’t have the money upfront.
What Is a Personal Loan?
A personal loan lets you borrow a smaller amount of money compared to a home loan. You repay it in regular amounts—weekly, fortnightly, or monthly—usually over 1 to 7 years.
There are two main types:
- Fixed rate: Your repayments stay the same
- Variable rate: Your repayments can change
Unlike a home loan, a personal loan doesn’t always need to be secured against an asset like a house or car. This is called an unsecured loan
What Can You Use a Personal Loan For?
You can use a personal loan for many things, such as:
- Home upgrades like new bathrooms, kitchens, or landscaping
- Buying furniture or appliances
- Going on holidays
- Paying for a car, caravan, or boat
- Fixing your car
- Wedding expenses
- School or university fees
- Medical or dental costs
- Legal bills
It can also help you manage your money better by:
- Combining multiple debts into one payment (debt consolidation)
- Paying for something upfront instead of using high-interest credit
How Much Can You Borrow
Most personal loans let you borrow between $4,000 and $50,000, depending on your income and financial situation. The loan usually needs to be paid back within seven years.
Why Choose a Personal Loan Instead of a Credit Card?
- Lower interest rates – Personal loans often have cheaper interest than credit cards
- Lump sum payment – You get the money all at once
- Set repayment plan – You know exactly when it will be paid off
Credit cards can be handy, but if not managed carefully, they can lead to long-term debt. A personal loan helps you stay in control and avoid long-term interest.
How to Apply for a Personal Loan
To get a personal loan, you need to show the lender that you can pay it back. You’ll need to provide:
- Proof of income and living expenses (like rent, bills, etc.)
- Details of your job and how long you’ve been employed
- Your credit history
This helps the lender decide if you qualify for the loan.
When Is a Personal Loan a Good Idea?
A personal loan is great for short-term financial needs. But before taking one, ask yourself:
- Can I afford the repayments?
- Do I already have other loans or debts?
- Will this loan help or hurt my long-term financial goals?
A personal loan isn’t a quick fix. It should be used carefully and paid off as soon as possible.
Talk to Mortgage Choice about your personal loan
The best way to know for sure if a personal loan is the right choice for you is to chat with us about your options! We’ll sit down with you and discuss your goals, your budget & find the right personal loan for you. We’ll even give you some tips on how to pay off the loan faster.
Contact Mortgage Broker in Pakenham on (03) 9118 0645 or email [email protected]