Money lenders offer a wide variety of flexible financing options, which can provide funding for a variety of situations.
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Simply put, money lenders provide financing for people for a range of reasons. They provide a host of financing options, which include personal loans, business loans, credit cards, bank overdrafts, equipment financing and more. The right lender, along with the most appropriate loan type, always depends on your particular personal or business situation.
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Do you really need a loan today?*
It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.
Check your options before you borrow:
- For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
- Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
- If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94
The Government's MoneySmart website shows you how small amount loans work and suggests other options that may help you.
* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.
Money lenders comparison
How do money lenders work?
Money lenders work by offering money at a given interest rate. They lend money upfront or offer financing as needed (revolving credit) and charge an interest rate on the borrowed amount. This may be a fixed or variable interest rate depending on what someone has applied for.
Money lenders also charge fees such as service fees, annual fees, transaction fees and other types of one-off and ongoing fees, which help them cover the cost of maintaining a customer's account. They may also require security, such as home or business equity, to be provided as collateral for a loan, in order to approve applicants for certain types of financing.
What kinds of money lenders are there?
There are a host of Australian money lenders and they all generally fall into one of the following categories:
- Short-term lenders. Such lenders include payday lenders and others offering short-term personal or business loans. A loan with these lenders will usually be disbursed quickly and the repayment schedule should be short. Short-term lenders require loans to be repaid over terms of 16 days to one year. These loans usually have very high rates and fees so should only be used for emergencies.
- Bad credit lenders. These lenders specialise in lending to people or businesses with bad credit. Although there may be increased flexibility in terms of approving people with negative credit histories, the rates and fees are usually much higher in order to compensate for an increased risk.
- Branch lenders. These include more traditional lenders such as banks and deposit institutions, as well as non-bank lenders with bricks-and-mortar branches, where people can actually walk in and request a loan (as opposed to online lenders, for example).
- Large-amount lenders. These types of lenders specialise in financing large personal loan amounts, anywhere from $5,000 to $10,000, for people and businesses. They include banks and deposit institutions, as well as credit unions, building societies and other non-bank lenders.
- Equipment/vehicle lenders. These could be the actual company selling the equipment, such as a car dealership, or they could be a third-party lender specialising in equipment financing.
How to choose a money lender?
Keep in mind the following factors when comparing financing options between money lenders:
- Reputation. Knowing a lender’s reputation is important, as prospective applicants will want to make sure that they choose a reliable source of funding. Therefore details such as brand, business longevity and other elements of the lender’s reputation are important points-of-difference to take note of when choosing a lender.
- Loan amount and efficiency. Borrower's should always ensure that a lender offers the amount that they require before they apply, but they should also make sure that that lender will provide the funding within the timeframe they need. It would be a huge waste of time applying for a loan only to find out that the funds won’t be available when they're required.
- Cost. Applicants should make sure that they are fully aware of their lender’s rate and any one-off or ongoing fees. Also they should be aware of the difference between fixed and variable interest rates. Loan customers should take note of the loan’s comparison rate (as opposed to the loan's advertised rate), which combines the lender’s interest rates with its fees, to better help them to compare overall loan costs between lenders. Finally, see whether your lender requires any security, such as home or business equity, as loan collateral.
- Loan term. A loan term is the timeframe in which a loan is scheduled to be paid back. Depending on whether someone is applying for a short-term or long-term loan, this may be anywhere between three months (even shorter for payday loans) and several years. A repayment schedule will be based on someone's loan term, so applicants should make sure that they are able to meet their monthly repayments prior to submitting an application.
- Service. Prospective applicants should make sure they're aware of any additional features that their lender may offer, such as online account management, customer support, ATM cards and additional sub-accounts for revolving credit.
Is there anything to consider before borrowing money?
Be aware of the following pitfalls before applying with any money lender:
- Getting into too much debt. People should always avoid getting into too much debt by being aware of a lender’s associated costs and making sure that they are able to afford them. Also, prospective applicants should make sure that they are able to meet monthly repayments and never request loan amounts larger than what they actually need.
- Disreputable money lenders and loan sharks. There are a great deal of disreputable lenders out there that offer what seem to be attractive rates or financing for bad credit applicants. Loan customers should very wary of any offer that seems too good to be true and be absolutely sure of their lender’s history and reputation before signing their name on the dotted line. Also, be wary of loan sharks who charge ridiculously high interest rates for desperate borrowers.
Frequently asked questions about money lenders
What’s the most important factor when choosing between money lenders?
There’s no single most important factor. Rather, customers should consider overall factors such as their repayment ability, what their lender is offering and how it fits with their unique needs.
Will I be approved?
Someone's chances of approval depend on several factors determined by the lender that they apply with. They usually need to be over the age of 18 and be an Australian citizen or permanent resident (although there may be loans available for temporary residents). Someone's credit history, income and personal assets are also important factors in determining eligibility.
How much financing can I apply for?
This depends on a person's personal and financial situation, as well as how much their lender approves. Customers looking to take out a loan can always find out the minimum and maximum loan amount offered by looking at our comparison tables. It's a good idea fr people to keep in mind that they should never apply for funding that exceeds their repayment ability or what their actually need.
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