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How to choose your personal loan


Choosing a personal or car loan is easy when you understand the rate and repayment types, find out what questions to ask to avoid fees.

You’ve set your eyes on a goal, and worked out how much you could borrow. Now you have some choices about which loan could be right for you. 

Everyone is different, so it’s important to find a loan to suit your needs and personal situation. 

That’s why it’s a good idea to research a range of different loans.

Get to know interest rates

Interest rates are one of the first things people look at when researching personal loans. The interest rate on a personal loan can vary depending on whether the loan is secured or unsecured, and can be either variable or fixed.

If you opt for a variable rate personal loan, your interest rate can increase or decrease over the life of the loan dependent on decisions made by your lender. If your interest rate drops, your minimum repayments will drop. However, there is a downside to variable interest rates too; if interest rates go up, your repayments will too. 

Fixed rate personal loans don’t come with that worry as the interest rate will remain the same for the life of the loan and you can be certain about what your repayments will be. So think about how flexible your budget is when weighing up between fixed or variable rates.

At Newcastle Permanent, we have competitive fixed rate personal loans, which can help make budgeting easier. Some other benefits of our fixed rate personal loans include:

  • No account keeping fees or early repayment penalties
  • No restrictions on extra repayments.

Know about repayment options

When considering your repayment options for personal loans, most lenders will allow you to select from either weekly, fortnightly or monthly repayments. Depending on your personal circumstances you should select the one that suits you best. If you get paid fortnightly, it might be easiest to schedule your repayments to align with when you get paid.  

It may also be worth investigating whether you have the option to make lump sum payments. For example, if you get a bonus you may want to pay extra off your loan. This can help reduce the amount of interest you will pay and help you pay the loan off sooner.

Look out for fees and charges

Once you’ve wrapped your head around interest rates and repayments, you’ll need to understand fees and charges so you can avoid any hidden costs. Here’s what to consider when doing your research:

Application fees

  • Some lenders may charge an application fee to apply for a loan.

Monthly or ‘ongoing’ account fees

  • Some personal loans have a monthly fee attached. These fees may not appear much but over the life of the loan they can add up.

 Early repayment fees

  • Find out if there are any fees or charges for paying your loan off early.

Check the terms and conditions

Lastly, when you’re ready to apply for a personal loan, check the terms and conditions (including the loan contract). It will have all the facts about the interest rate, fees and charges, and repayments.

This article is intended to provide general information of an educational nature only. It does not have regard to your objectives, financial situation or needs and must not be relied upon as financial product advice. Before you act on this information, you should consider whether it is appropriate for your circumstances. Information in this article is current as at the date of publication. Applications subject to credit approval and fees and charges are payable. Terms and conditions apply and are available on request.

Personal loans

Our competitive fixed interest rate personal and car loans help you get what you want sooner.

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