Getting together enough cash to pay for large purchases like a car, holiday or home renovation can be difficult and often result in you resorting to credit.
A personal loan, however, is usually a better option that can attract a much lower interest rate: the reason being that you need to repay it within a specific time frame.
There are three types of personal loans that you can choose from:
1. Secured personal loans: requires you to put up an asset (such as a car or house) which can be repossessed if loan repayments aren’t met. This type usually has lower interest rates.
2. Unsecured personal loans: common for purchases, but since there’s no security for this loan type they usually have higher interest rates. You may also need to provide additional evidence to the lender that you’ll be able to pay the loan off.
3. Line-of-credit: These are less common and are typically used by people with higher incomes. A line-of-credit loan usually has more flexible repayment options.
There are also multiple features in a personal loan that will keep your debt as light as possible, in comparison to a credit card:
- Fixed loan amount: you can’t increase the amount borrowed on a personal loan, removing any temptation to borrow more.
- Set repayment deadline: as you’ll have to finish paying the loan off by a certain deadline, this will put a cap on your interest outlay.
- Better interest rate: the average rate for a personal loan is almost 6% cheaper than the average credit card.
A personal loan can be the solution to anything you need: whether it’s for medical expenses, an upcoming wedding, that back-packing trip you’ve always wanted to go on, Pembertown can get you covered fast! If you’d like to discuss more about each type of personal loan or which one would best suit your needs, give us a call on 1800 803 017!
