Reasons for getting a Personal Loan

If you’re not familiar with Personal Loans already, you may be wondering what they are, and what they can be used for. We’re gonna start from the beginning, and fill you in on some of the reasons people take out Personal Loans.

What is a Personal Loan?

A Personal Loan is an amount of money which a bank or lending institution loans to an individual for a worthwhile personal purpose. Usually, Personal Loans are for smaller amounts than Home Loans. You use the funds to purchase what you’re after, and you make repayments to the bank to repay the loan, with interest.

What can Personal Loans be used for?

This will usually be defined by the bank or lending institution, but generally Personal Loans can be used for any worthwhile personal purpose. You do, however, have to have a reason to take out the loan – you can’t just take out a loan because you want a large amount of money. Some uses for Personal Loans include buying a car, renovating your property, or going on vacation.

How do Personal Loans work?

When you have something big in your sights, and you aren’t prepared to save the whole amount, you can discuss a Personal Loan with your bank or lender. You nominate an amount you need, and a term (number of months or years) over which you feel comfortable to repay the loan.

Depending on the type of loan, you may also be asked to provide collateral or security against the loan. For example, if you plan to purchase a new car with your loan, the vehicle itself will usually act as security. This means that in the unfortunate event that you can’t repay your loan, your lender is able to try and recoup the funds it lent by taking ownership of the vehicle and selling it on. This is what’s known as a Secured Personal Loan, but you can also find Unsecured Personal Loans, for which you don’t need to provide collateral, but as a result, you’ll usually pay a higher rate of interest.

So, why might somebody need a Personal Loan?

Holiday Loan

As Aussies, we love travel. Maybe it’s something about the wide open spaces which surround us, but boy, do we love getting away. Whether it’s seeing the natural wonders on offer domestically or taking off (pre-COVID, anyway) to some far-flung corner of the globe, we know how to holiday.

With this in mind, it may surprise you to learn that a whopping 44% of working Australians have over 3 weeks leave in the tank*. For such a bunch of hard-working travel-lovers, often what this means is that when we decide to take a vacation, there’s no time to save for it.

This is where a Holiday Loan can come in handy. Depending on which lender you approach, some Personal Loans can be approved pretty quickly. At Greater Bank, we can approve loans in as little as 24 hours – that’s shorter than some long-haul flights!

One advantage to using a Holiday Loan to fund your vacation versus a Credit Card is in the interest rates you’ll pay. In many cases, you’ll be able to find a Holiday Loan with much cheaper interest rates than the average credit card, meaning your trip around the globe doesn’t need to cost you the earth.

Greater Bank

What’s more, if you select a lender who offers no penalties for repaying your Holiday Loan early, you’ll be able to repay your loan sooner when you’re flush for cash at tax time, or bonus time.

Apply on your own Apply with someone else

Engagement Ring Loan

Video: How would you rate your financial literacy?

How would you rate your financial literacy?

Research completed by The University of Newcastle as part of our Financial Literacy partnership has validated the need for a greater focus on financial literacy and financial wellbeing, particularly among students of high-school age.

Explore the report

If your proposal is a spontaneous bolt from the blue, saving for an engagement ring might not be an option, or you may have enough savings to cover only part of the cost of your beloved’s ring. In this case, an Engagement Rin Loan is fit for purpose.

The old adage goes that an engagement ring should cost the equivalent of three months salary. However, like many old adages, this is flawed, and you shouldn’t let this measure dictate when you decide to pop the question. When shopping for a ring, your first concern should be choosing one you think your partner will like, at a price you are comfortable paying.

A 2019 study found that the average cost spent on an engagement ring was $5,300, and that 80% of engagement rings featured a diamond. Having said this, engagement rings come in all shapes, sizes, colours, settings, stones and metals, so how you want to express your love and your budget matter.

A Secured Personal Loan from Greater Bank will allow you to borrow anywhere between $5,000 - $100,000, meaning that no matter how grandiose you want your proposal to be, we may be able to help. What’s more, loans can be pre-approved, meaning that you can shop with confidence when the time comes to start visiting jewellers.

Apply on your own Apply with someone else

Furniture Loan

Moving house is expensive, not to mention being one of the world’s least enjoyable activities. Whether you’re renting or have bought a home, you’re already covering moving costs and replacing anything broken along the way.

Especially when starting out and moving into a bigger rental or your first home, you may find a distinct shortage of furniture at your disposal, relative to your new place. One option is to set up a Pinterest board and promise yourself you’ll wait until you can fill your rooms with lavish furnishings worthy of your future dream lifestyle, while you live like a pauper.

The other option is to get a Furniture Loan.

Your home should be your sanctuary – your safe place where you long to come back to. Furnish it! Getting a furniture loan means you can fill your home and make it liveable. Even if you just need a change, or need to replace furniture that is old and worn out, do some shopping online, calculate how much you’ll need, and then speak to a lender about a furniture loan.

Again, you can even get pre-approved so that you can start taking measurements and choosing fabric colours. Using a Furniture Loan means that instead of visiting multiple different furniture outlets and purchasing items on separate interest-free credit programs, you have one simple repayment and one interest rate. Too easy.

Other Personal Loans

So why else would someone need a Personal Loan? Here are some more common purposes:

Wedding Loan

We’ve all heard stories about that one friend who ended up paying upwards of six figures for their wedding. It’s the biggest day of your life, and even if your theme is low-key, weddings can quickly become expensive.

If you’ve been saving for the big day, great. If not, or if your savings will only pay for an entrée and not dessert, a Wedding Loan can help you have the wedding of your dreams.

New Car Loan or Used Car Loan

For most of us, especially in this wide, brown land, having a car is an essential part of life as an adult. Especially for our first car, many people will usually have some of the amount required to buy their new wheels saved. If not, many lenders will offer a Personal Loan specifically for vehicle purchases, which offer competitive rates if the car is used as security.

Many buyers can be convinced by dealer finance because of the ease and convenience offered, but it can be worth your while to do your homework and make sure this option is right for you before committing.

A Greater Bank New Car Loan comes with no monthly or annual fees, and if you want to pay out your loan early – good for you. No penalties apply.

Apply for Personal Loans online

Personal Loans can be useful for those things we need or want in life that are perhaps just out of reach of our budget or savings. We know we’d be able to save for them, but we want or need them now.

Provided you do your homework and make sure that you’re getting a Personal Loan that’s offering you the best deal for your circumstances, and which you’re comfortable being able to repay, a Personal Loan is a super-useful financial tool.

If you’re ready to apply for a Greater Bank Personal Loan, complete our online application form in minutes today.

Apply on your own Apply with someone else

* http://www.roymorgan.com/findings/6974-holidays-waiting-to-happen-australian-workers-134million-days-annual-leave-201609200934