Personal loans: What’s Best for Me?
Whether it’s for house renovations, car purchasing, holiday payments or funds to cover unexpected bills such as car repairs or medical expenses, there’ll be times in life when some extra cash would come in handy – and it can be in a form of a personal loan.
A personal loan allows you to borrow money now and pay it back through regular instalments, along with interest and fees, over some time. But with so many personal loans in the market, how do you decide which one provides the best value for you?
These are some factors to consider when choosing a personal loan.
Secured loan vs. unsecured loan
A personal loan can be a secured or unsecured loan. A secured loan often has a lower interest rate than an unsecured loan but you are required to provide an asset, for example, a car or home, as security for the loan. This will mean that if you don’t pay your loan back on time, the bank or lender can repossess the asset you used as security.
With unsecured personal loans, the lenders don’t require you to provide an asset as security but the interest rate will typically be higher and they can still take you to court if you fail to pay the loan back. Some lenders will offer personal loans with a lower interest rate if you provide a loan guarantor.
Fixed interest rate vs. variable interest rate
Another factor to consider when applying for a personal loan is whether to get a loan with a fixed interest rate or a variable interest rate. With a fixed interest rate, your rate will stay the same over the life of the loan which makes it easier to plan your repayments. However, if the market interest rates fall, your rate will stay the same so you won’t reap the benefits.
With a variable interest rate, your rate can fluctuate both up and down depending on the market rate. The interest rate you are offered by your lender may be also affected by other factors such as your credit score. When assessing which loan is right for you, as well as looking at the interest rate, it is important to look at the comparison rates too.
Fees and charges
Fees will also vary between loans and lenders. Fees to look out for include the application fee, monthly or annual service fee and missed payment fees. Some lenders also charge an early repayment fee or an early exit fee. It’s a good idea to look into the fine print and find out exactly what costs are associated with the loan before going ahead.
You’ll also need to decide how long you need to borrow the money for. Often short term loans will have lower interest rates. With long term loans, each repayment may be lower but you’ll generally pay more interest over the life of the loan.
Current financial situation
Each person’s financial situation is different so you’ll need to consider your current financial position, including your income, savings and expenses, to work out the amount of money you can comfortably borrow. The last thing you want to do is to borrow more money than you can afford to pay back.
There are several online tools and calculators available that can easily help you estimate repayments and compare different loan options. They’ll also help you decide on your loan repayment terms.
Look no further!
MONEYME offers loans up to a maximum of $50,000 that can be borrowed over a 1 to 3 year period. We also have a free online loan repayment calculator to help you plan your finances. With fast approval, flexible repayment terms and no early repayment fees, MONEYME makes personal loans easy.
Applying for a loan with MONEYME is quick and straightforward. Simply let us know how much money you would like to borrow, your preferred repayment period and some personal information including your bank account details and email address.
You’ll receive a decision within a matter of minutes and, depending on who you bank with, your money could be in your bank account in as little as 60 minutes. MONEYME also offers a low rate of a virtual credit card. If you are looking for fast and uncomplicated financing, then you’ve come to the right place!