When your clients borrow money as a legal loan, they've got flexibility in how they use the funds – but they can’t use them for just anything.

Accessing high-quality legal advice

If your clients don’t have income to cover the cost of their family law matter, or their money is tied up in a property settlement, a legal loan helps cover the cost of getting the advice they need, when they need it. 

Existing legal debts 

Because marriage breakdowns can be complicated, your clients may already have legal debts to handle. Legal loans can be used to pay outstanding fees, as well as for future legal costs. 

Matters handled outside of court

There’s no need to head to a courtroom to access funds through a legal loan. If your clients are hoping to avoid litigation, legal loans can also be used for non-confrontational alternative dispute resolution (ADR) like mediation, arbitration and pre-action procedures. 

Assorted fees 

A legal loan also isn't just for legal fees – it can be used to cover a variety of costs associated with the legal process. These can include third-party costs like valuers and accountants valuing the asset pool, complicated structures and asset protection schemes.

Limited personal reasons

Your clients might also be able to access a small amount of the overall loan for personal reasons. What are legal loans used for in everyday life? Your clients can use them to:

• Improve their house prior to putting it on the market to increase the sale price
• Repay family members who have loaned them money
• Pay for advice on their new circumstances, such as from a financial planner
• Pay off a high-cost debt, such as a credit card or tax bill
• Tide them over while you’re waiting on a property settlement, helping them avoid interim applications and partial property orders

If you’re a young student juggling studies and part-time work, or just beginning your first full-time job, chances are you have limited or no credit history. We get it – we all have to start somewhere! 

Applying for a car loan without a credit score can be a little tricky. Lenders may view you as a ‘risky’ borrower because there’s no report card available that evaluates how well (or badly) you’ve handled your debts and repayments in the past.

Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed in the past. It also notes your history of repaying debts on time, including bills such as mobile phone plans.

But don’t lose heart. Follow this guide and you’ll soon be on the road to buying your very own sweet ride, even without a credit history.

Will I be approved?

If you can show that you have the means to make regular repayments on your car loan without going into financial difficulty, you’ll have a better chance of being approved for a car loan. Here are 5 ways to prove you’re a trustworthy borrower:

1. Have a secure job with a regular income (it doesn’t need to be full-time).

2. Make sure your income is high enough to easily meet the repayments for the loan you want.

3. Show that you save money from your income each month.

4. Make sure there’s no history of late payments on your bills (this includes Afterpay).

5. Save for a deposit in a high-interest savings account.

Proof of life 

Before agreeing to loan you the funds for your dream car, the lender will want to be sure you have a stable home and job. Basically, they want to know you’re not a flight risk. Makes sense, right? 

Gather together the paperwork you need to show the following:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill, etc.
  
• Proof of income, such as recent payslips, current bank statements and a letter from your employer stating your employment details.
  
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.
  
• Contact details for people who can authenticate these details, such as your employer, landlord or accountant.
  

Build your credit history

There’s no doubt about it, having a positive credit report makes it much easier to get approved for a car loan. The good news is it’s easy to build your credit history and you don’t need to take out a credit card to do it. 

Simply by paying your bills on time, such as mobile phone and electricity, you will start to build a positive financial report. Think about setting up direct debit payments for these bills so that you always pay on time. 

Guaranteed security

Having a family member or friend with good financial status and credit history act as a guarantor application could improve your chances of being approved for a car loan if you have no credit score yourself. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Number crunch! 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Once you have a particular car loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  

Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees

Peer-to-peer lending

When you’re researching student car loans, it pays to look beyond the ‘Big Four’ banks. Online lending platforms, also known as peer-to-peer lenders, often provide a faster approval process and lower interest rates than traditional lenders. 

This type of lender, also known as ‘peer-to-peer’ lending or marketplace lending, allows you to seek a loan from a private lender. All P2P lenders set their own loan requirements and terms. 

It’s a good idea to check the comparison rates of various lenders to make sure you find the best loan to suit your needs. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily, including loans offered by P2P lenders. 

Car dealer finance

Many car dealerships offer their own loans when you buy directly from their car yard. This type of finance is usually very swift to arrange and may include a tempting up-front offer, such as zero interest for the first few months. 

But beware the fine print! Car dealer finance may come with hidden fees and charges, such as up-front and monthly administration fees, and/or a ‘balloon’ payment. A balloon payment is a large sum paid at the end of your loan in order for you to own the car. 

It’s a good idea to calculate whether the total repayments on the loan will end up being higher with the extra fees and balloon payment before committing. 

Banks and credit unions 

Some banks and credit unions offer car loans specifically for students, while others will simply offer their regular car loan products. You probably have a long history with your bank through your savings accounts, which might help if you have no credit history. 

A traditional car loan from a bank or credit union can be secured or unsecured. 

Secured car loan: This type of loan is usually secured by the car. This means if you can’t make repayments, the lender can take the car and sell it to recover the cost of the loan. Some lenders will approve a new car loan for cars that are 2 or 3 years old. The higher the value of the car, the lower the interest rate may be on this type of car loan. 

Unsecured car loan: An unsecured car loan usually has a higher interest rate than a new car loan or secured car loan. This is because an unsecured car loan does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. The lender assesses your credit score and income to approve the loan.

Fixed or variable interest rate?

When you apply for a car loan, you have the option to choose between a fixed or variable interest rate. 

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation. 

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan. 

Pros

• You know exactly how much your repayments are each month.
• You can plan and budget with certainty, knowing your repayments won’t change.
  
• You’re protected from future interest rate rises.
  

You know exactly how much your repayments are each month.

You can plan and budget with certainty, knowing your repayments won’t change.

You’re protected from future interest rate rises.

Cons

• If the market interest rate falls, you pay more interest with a fixed rate.
• Some lenders may insist upon a shorter lending period.
  
• Fixed rate personal loans may not have a redraw facility.
  

If you want to pay back your car loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early.

Variable Interest Rate

A variable rate rises and falls with the market interest rate as it responds to current economic conditions. This means you could end up paying more or less for your car loan, depending on the market rate.  

Pros

• If the market rate drops, you could pay less for your car loan overall.
• Most lenders offer longer repayment terms with a variable interest rate.
  
• You may have the option to make additional repayments which could save you money over the life of your car loan.
  
• You may be able to redraw from any additional repayments you have made if you need some extra cash along the way.
  

Cons

• If the market rate rises your repayments increase.
• Interest rate rises are unpredictable and could make it harder to budget and make plans for the future.
  

Choosing between a fixed or variable interest rate is an important decision that could have a big financial impact down the track. Some people prefer the predictability of a fixed rate personal loan, while others prefer the flexibility of a variable rate. 

Things to consider

When calculating how much you can afford to borrow, don’t forget to factor in the cost of actually running and maintaining your car, including stamp duty, registration, car insurance, petrol, regular services and road tolls. 

Navigating Australia’s vast country regions and urban centres can be challenging without a set of wheels to get you from A to B. If you have just moved to Australia to work or study and don’t have the funds to purchase a car up front, you might be wondering if a car loan is a viable option. 

Although most lenders will only loan funds to Australian citizens or permanent resident, there are some who will provide car loans to people on temporary work visas such as 457.

Visa duration

The challenge that most 457 visa holders face is that their visa duration may only allow them to stay 2 – 3 years in the country. Lenders will assess your ability to repay the car loan within the period of your visa. Generally, the loan term will end at least three months before the expiration of your visa. Depending on your income and other factors, repaying the car loan in just 2 or 3 years could make the loan unaffordable. 

Even if you believe your visa will be extended after the initial period, the lender will only take into consideration the current visa status as approved by the Department of Immigration. Lenders won’t take into consideration any visa extensions that are awaiting approval. Similarly, provisional visa holders are unlikely to be approved. 

Will I be approved?

As a temporary resident, you are unlikely to have a significant credit history in Australia. Instead, lenders will consider a range of other factors to assess whether you are a ‘safe’ borrower. 

These factors include: 

• Visa length. Is your visa valid for longer than the duration of the loan applied for?
• Visa type. Lenders may only offer a car loan to temporary residents holding certain type of visas. You have a better chance of success if your visa is sponsored by an employer.
  
• Visa validity. If you are working multiple jobs, you could be in breach of your visa.
  
• Income and profession. Can you show that you have regular income and a stable employer? Lenders will also take your profession into consideration.
  
• Savings. If you can show that you have saved a deposit, or save money regularly from your income, lenders are more likely to view you as a safe borrower.
  
• Expenses and debts. Lenders will consider your everyday expenses and other debts to determine whether you can afford to make repayments on the car loan without falling into financial difficulty.
  
• Loan guarantor. If a close relative with a good credit report co-signs your loan, you may have a higher chance of being approved. Your loan guarantor accepts responsibility for the repayments if you default for any reason. Keep in mind, your loan guarantor will need to be an Australian citizen or permanent resident.
  

Special requirements

Depending on your profession and visa status, some lenders may require you to provide a cash deposit to reduce the amount you need to borrow. Generally, the car would be used as security against the loan. This means that if you are unable to make repayments, or you leave the country before the loan is repaid, the lender can repossess the car to cover the costs of the loan. 

The lender may also specify the type of car you can purchase with the loan. For example, the car may need to be less than 4 years old. 

Can I get a car loan if I am an international student?

Applying for a car loan as an international student can be challenging. Not all lenders will offer car loans to international students and those that do are likely to include restrictions and conditions on the loan. 

It’s a good idea to spend some time researching your options to find out which lenders are willing to offer car loans to people who hold your specific visa. You can do this by speaking with a loan specialist who is experienced in finding car loans for people in a wide range of situations. 

You sure can! Anyone over the age of 18 can apply for a car loan as long as you have a steady income and can make repayments without falling into financial difficulty.

Your income may come from investments, assets or even government benefits, such as the Age Pension, Disability Pension or Veteran Payment. But keep in mind, your car loan options could be more limited than someone who is employed full-time. 

It’s a good idea to find out if you’re eligible for a loan before you apply. That way, your credit report won’t be negatively impacted and you’ll avoid paying multiple application fees.  

Will I be approved?

Before agreeing to finance your car, a lender will examine your income, savings, assets and expenses to determine whether you’ll be able to repay the loan amount, plus interest, without falling into financial difficulty. They will take into account your:

• Income received from pension payments and other government benefits
• Credit history
  
• Assets, including your home and savings
  
• Residency status – you will need to be an Australian citizen or permanent resident

A lender will compare your income with the car loan repayment amounts, to ensure you can easily meet your loan obligations. 

Play the odds

Here are 5 ways to improve your chances of having a car loan approved:

1. Make sure your income is high enough to easily meet the repayments for the loan you want.
2. Save for a deposit or look at buying a used car so you can borrow a smaller amount.
   
3. Make sure there’s no history of late payments on your bills (the occasional lapse is OK).
   
4. Use an asset as collateral. Using an asset as security against the loan, reduces the risk to the lender as they can use the asset to recover the cost of the loan if you are unable to make repayments down the track. It may also mean you can secure a lower interest rate on your car loan.
   
5. Have a family member or friend with good financial status and credit history act as a guarantor on your car loan. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds.

Number crunch! 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. 

When comparing loan rates, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period

Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees

When comparing rates between lenders, be sure to check out the comparison rates. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

In Australia, lenders are required to show a comparison rate as an annual percentage when they advertise an interest rate. It’s a helpful tool when researching the cost of the loan. Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on personal loans quickly and easily. 

Next steps 

Once you’ve made a short list of the best loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail. 

Remember, the best personal loans aren’t just about what’s written down in black and white. It’s worth checking customer service ratings and reviews to find a personal loan provider with a friendly, helpful and responsive team. Good customer service can make a big difference to your overall experience. 

Once you’ve decided on the best personal loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit. 

You sure can! Anyone over the age of 18 can apply for a car loan as long as you have a steady income and can make repayments without falling into financial difficulty.

Your income may come from investments, assets or even government benefits, such as the Age Pension, Disability Pension or Veteran Payment. But keep in mind, your car loan options could be more limited than someone who is employed full-time. 

It’s a good idea to find out if you’re eligible for a loan before you apply. That way, your credit report won’t be negatively impacted and you’ll avoid paying multiple application fees.  

Will I be approved?

Before agreeing to finance your car, a lender will examine your income, savings, assets and expenses to determine whether you’ll be able to repay the loan amount, plus interest, without falling into financial difficulty. They will take into account your:

• Income received from pension payments and other government benefits
• Credit history
  
• Residency status – you will need to be an Australian citizen or permanent resident
  
• A lender will compare your income with the car loan repayment amounts, to ensure you can easily meet your loan obligations. 
  

Play the odds

Here are 5 ways to improve your chances of having a car loan approved:

1. Make sure your income is high enough to easily meet the repayments for the loan you want.
2. Save for a deposit or look at buying a used car so you can borrow a smaller amount.
   
3. Make sure there’s no history of late payments on your bills (the occasional lapse is OK).
   
4. Use an asset as collateral. Using an asset as security against the loan, reduces the risk to the lender as they can use the asset to recover the cost of the loan if you are unable to make repayments down the track. It may also mean you can secure a lower interest rate on your car loan.
   
5. Have a family member or friend with good financial status and credit history act as a guarantor on your car loan. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds.
   

Number crunch! 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. 

When comparing loan rates, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees
  

When comparing rates between lenders, be sure to check out the comparison rates. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

In Australia, lenders are required to show a comparison rate as an annual percentage when they advertise an interest rate. It’s a helpful tool when researching the cost of the loan. Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on personal loans quickly and easily. 

Next steps 

Once you’ve made a short list of the best loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail. 

Remember, the best personal loans aren’t just about what’s written down in black and white. It’s worth checking customer service ratings and reviews to find a personal loan provider with a friendly, helpful and responsive team. Good customer service can make a big difference to your overall experience. 

Once you’ve decided on the best personal loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit. 

If you’ve got your eye on your dream car, you need a car for work, or you just need something to get you from A to B, a car loan can get you there faster. With a car loan, you can shop for a car using finance instead of waiting until you’ve saved enough to buy the vehicle outright. 

A car loan allows you to borrow an amount of money and agree to pay it back over a certain time period (called a term), including interest. These payments can be made in regular payments (weekly, fortnightly or monthly) and a typical term is between 12 months and 10 years depending on the lender you choose and the amount you borrow.

The question is, can anyone get a car loan? Use this guide to find out what you should consider before applying for a car loan and the likelihood of being approved. 

Risk versus reward 

Have a think about how much you need to spend on your car. A go-to rule is to spend no more than 35% of your annual income. Make sure you can afford the monthly repayments in addition to your other bills. Are you sure your income and expenses will remain the same throughout the whole term of the loan? If your circumstances change, could you still afford this additional debt? When considering your application, lenders always like to see that you have chosen a loan you can afford and that suits your financial circumstances. 

To be eligible for a Plenti car loan you must:

• Be aged 21 or over
• Be an Australian citizen or permanent resident
  
• Be earning over $25,000 per year from a regular source of income that you can demonstrate
  
• Have a good credit history

Plenti will consider a loan application if you are self-employed. Additional credit assessment criteria and requirements may apply.

The fine details 

To obtain a car loan, you’ll need to provide details about the car you’re buying, proof of identity and evidence that you’re able to make repayments. The type of information that you’ll be asked to provide includes:

Keep in mind, lenders might need to speak to your employer, landlord and/or accountant to make sure your information is accurate and to check your credit history. 

Know the score 

It pays to check your credit score before applying for a car loan. 

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you are a trustworthy borrower. 

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report by contacting one of these credit reporting agencies:

• Proof of identity (passport or driver’s license)
• Proof of income (pay slip or tax return)
  
• Assets (such as property, vehicles or jewellery)
  
• Other debts (credit cards and loans)
  
• Regular expenses (rent and bills)
  
• Bank statements to show savings and repayments made in the past on loans or credit cards
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. Checking your credit report will NOT impact your credit score.

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you buy. You can do this by:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

Take the step 

At Plenti, your first step in applying for a car loan is to  request a RateEstimate. Your RateEstimate assesses whether you’re eligible to apply for a loan with Plenti. We simply ask you a few questions so we can calculate an initial estimate of your borrowing potential, along with the rates, fees and charges that may apply to your loan.

Requesting a RateEstimate won’t impact your credit score and there’s absolutely no obligation for you to proceed with a loan application. It’s free, secure, and only takes one minute to complete.

A bad credit score can make it tough to get a car loan, as lenders may view you as a ‘risky’ borrower. But don’t lose heart. Your credit score isn’t the only factor that lenders consider when deciding whether to approve you for a car loan. 

Some lenders are willing to provide car loans for people with bad credit scores as long as they feel sure you’re able to make repayments regularly without falling into financial difficulty. 

Plenti can tailor a car loan solution to suit your circumstances, including competitive rates and flexible feature, even without a good credit score.

Let’s look at what defines a bad credit score and the steps you can take to improve it. 

What is a credit score?

When you apply for a car loan, you can expect the lender to check your credit history, current debt and income so they feel confident you can repay the loan. 

Your credit score is a number that sums up the information on your credit report. It tells the lender whether or not you are a trustworthy borrower. 

Around 50 major Australian lenders, including Plenti, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. It means you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

What is a bad credit score?

A bad credit score can make it hard to obtain a car loan with a competitive interest rate and may also limit the amount you can borrow. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

According to this credit score table from credit bureau Equifax, a bad credit score ranges from 0 – 509. A score within this range places you in the bottom 20% of Equifax’s credit-active population.  

If you’re a young student, just beginning your first full-time job, or returning from a long stint overseas, chances are you have limited or no credit history at all. In this case, it’s worth taking the time to build up a positive score so that you can more easily borrow money in the future. 

Simply by paying your bills on time, such as mobile phone plans and electricity, you will start to build a positive financial report. Think about setting up direct debit payments for these bills so that you always pay on time. 

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report by contacting one of these credit reporting agencies:

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. Checking your credit report will NOT impact your credit score. 

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

There’s no doubt about it, having a positive credit report makes it much easier to get approved for a car loan. The good news is it’s easy to build and polish your credit history and you don’t need to take out a credit card to do it. 

Consider lowering your credit card limit and try to pay more than the minimum repayment. Remember, applying for multiple loans over a short period of time can look bad on your credit report. Reducing the number of applications you make for credit will improve your credit score over time. 

Avoid late payments on your bills, including mobile phone plans and Afterpay. Setting up direct debit payments for these bills will mean you always pay on time and will begin to create a more positive credit history. 

The amount of time it takes for negative incidents to be erased from your credit report depends on the type of credit event that occurred.  

How much can I borrow if I have bad credit? 

Just as everyone is different, every car loan is also different. The amount you can borrow will depend on your individual life circumstances, including your income, expenses and other debts. 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. 

Remember, every time you apply for credit (including credit cards, personal loans and car loans) it affects your credit score. Find out which lenders are likely to approve your loan before you submit an application to prevent a black mark on your credit report. You can do this by contacting the lender to make an initial enquiry, rather than submitting a full application. 

When considering your application, lenders will take into account:

Will my car loan be secured or unsecured?

Even if you have a bad credit score, the lender may agree to offer you a secured car loan. This type of loan is usually secured by the car itself. This means if you can’t make repayments, the lender can take the car and sell it to recover the cost of the loan. 

An unsecured car loan, on the other hand, does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. Keep in mind, even if you are approved for an unsecured car loan, there is always the possibility of the lender taking you to court if you default on the loan. In this situation, your credit rating would be negatively impacted. 

Which lenders offer car loans to borrowers with bad credit?

Peer-to-peer lenders

When you’re researching car loans, it pays to look beyond the ‘Big Four’ banks. Online lending platforms, also known as peer-to-peer lenders, often provide a faster approval process and lower interest rates than traditional lenders. 

This type of lender, also known as ‘peer-to-peer’ lending or marketplace lending, allows you to seek a loan from a private lender. All P2P lenders set their own loan requirements and terms. 

If you have a bad credit score, it’s possible that your car loan will come with higher interest rates and fees, so it’s a good idea to check the comparison rates of various lenders to make sure you find the best loan option to suit your needs. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily, including loans offered by P2P lenders. 

Car dealer finance

Many car dealerships offer their own loans when you buy directly from their car yard. This type of finance is usually very swift to arrange and may include a tempting up-front offer, such as zero interest for the first few months. 

But beware the fine print! Car dealer finance may come with hidden fees and charges, such as up-front and monthly administration fees, and/or a ‘balloon’ payment. A balloon payment is a large sum paid at the end of your loan in order for you to own the car. 

It’s a good idea to calculate whether the total repayments on the loan will end up being higher with the extra fees and balloon payment before committing. 

Banks and credit unions 

Some banks and credit unions may approve car loans for people with bad credit scores, but only if they meet their additional strict criteria. 

Specialist bad credit lenders

Some lenders offer loans designed specifically for borrowers with bad credit. But it’s important to be aware of the loan features listed in the terms and conditions. Often, these types of loans come with high interest rates and fees to offset the risk to the lender. Make sure you can afford the total cost of the loan before you sign on the dotted line. 

Guarantor car loan 

Having a family member or friend with good financial status and credit history act as a guarantor application could improve your chances of being approved for a car loan if you have no credit score yourself. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Need a helping hand?

When you fall into financial hardship, it can be hard to see the wood for the trees. Remember, you’re not alone. You can seek help from qualified professionals free of charge through the National Debt Helpline (NDH). Call 1800 007 007 to find a counsellor near you. 

Life happens. Sometimes unexpected emergencies arise that put us in a tricky financial situation. Maybe you have a history of making late payments to lenders, or perhaps you simply haven’t built up enough years of credit history. No matter how you got there, it’s worth understanding how a low credit score can affect your ability to get approval for a car loan.  

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. A score that falls below 629 is generally described as ‘poor’. A poor credit score may impact how much you can borrow, the interest rate you are offered, as well as other loan features. 

The good news is that while a poor credit score can make borrowing money for a car challenging, that doesn’t mean it can’t be done. Many lenders are willing to provide car loans for people with poor credit scores, as long as they feel sure you’re able to make repayments regularly without falling into financial difficulty. 

Plenti can tailor a car loan solution to suit your circumstances, including competitive rates and flexible feature, even if you have poor credit. 

How much can I borrow if I have poor credit? 

Just as everyone is different, every car loan is also different. The amount you can borrow will depend on your individual life circumstances, including your income, expenses and other debts. 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. 

Remember, every time you apply for credit (including credit cards, personal loans and car loans) it affects your credit score. Find out which lenders are likely to approve your loan before you submit an application to prevent a black mark on your credit report. You can do this by contacting the lender to make an initial enquiry, rather than submitting a full application. 

When considering your application, lenders will take into account:

• Credit history
• Income
  
• Other debts
  
• Every-day expenses
  
• Loan amount
  

Will my car loan be secured or unsecured?

Even if you have a poor credit score, the lender may agree to offer you a secured car loan. This type of loan is usually secured by the car itself. This means if you can’t make repayments, the lender can take the car and sell it to recover the cost of the loan. 

An unsecured car loan, on the other hand, does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. Keep in mind, even if you are approved for an unsecured car loan, there is always the possibility of the lender taking you to court if you default on the loan. In this situation, your credit rating would be negatively impacted. 

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. Checking your credit report will NOT impact your credit score.

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

There’s no doubt about it, having a positive credit report makes it much easier to get approved for a car loan. The good news is it’s easy to build and polish your credit history and you don’t need to take out a credit card to do it. 

Simply by paying your bills on time, such as mobile phone and electricity, you will start to build a positive financial report. Think about setting up direct debit payments for these bills so that you always pay on time. 

Consider lowering your credit card limit and try to pay more than the minimum repayment. Remember, applying for multiple loans over a short period of time can look bad on your credit report. Reducing the number of applications you make for credit will improve your credit score over time. 

Which lenders offer car loans to borrowers with poor credit?

Peer-to-peer lenders

When you’re researching car loans, it pays to look beyond the ‘Big Four’ banks. Online lending platforms, also known as peer-to-peer lenders, often provide a faster approval process and lower interest rates than traditional lenders. 

This type of lender, also known as ‘peer-to-peer’ lending or marketplace lending, allows you to seek a loan from a private lender. All P2P lenders set their own loan requirements and terms. 

If you have a poor credit score, it’s possible that your car loan will come with higher interest rates and fees, so it’s a good idea to check the comparison rates of various lenders to make sure you find the best loan option to suit your needs. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily, including loans offered by P2P lenders. 

Car dealer finance

Many car dealerships offer their own loans when you buy directly from their car yard. This type of finance is usually very swift to arrange and may include a tempting up-front offer, such as zero interest for the first few months. 

But beware the fine print! Car dealer finance may come with hidden fees and charges, such as up-front and monthly administration fees, and/or a ‘balloon’ payment. A balloon payment is a large sum paid at the end of your loan in order for you to own the car. 

It’s a good idea to calculate whether the total repayments on the loan will end up being higher with the extra fees and balloon payment before committing. 

Banks and credit unions 

Some banks and credit unions may approve car loans for people with poor credit scores, but only if they meet their additional strict criteria. You probably have a long history with your bank through your savings accounts, which might help if you have no credit history or a poor credit score. A traditional car loan from a bank or credit union can be secured or unsecured. 

Guaranteed security

Having a family member or friend with good financial status and credit history act as a guarantor application could improve your chances of being approved for a car loan if you have no credit score yourself. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Make a move.

The first step in applying for a Plenti loan is to request a RateEstimate. It only takes around 1 minute to complete and will quickly tell you whether you’re eligible to apply for a loan with Plenti. It will also provide you with an estimate of the fees, charges and interest rate that may apply to your loan. 

If you’re happy with your rate estimate, we’ll typically finalise successful loans within a day or two of receiving your complete application. It’s that simple! 

Remember, requesting a free RateEstimate won’t impact your credit score and there’s absolutely no obligation for you to proceed with a loan application. 

Make the first move and you could be hitting the road sooner than you think. 

If you’re shopping around for a car loan, you’re probably comparing interest rates between lenders. But what about those hidden fees and costs that can catch you off-guard? Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan.

In Australia, lenders are required to show a comparison rate as an annual percentage when they advertise an interest rate. 

It’s a helpful tool when researching the cost of the loan. But remember, a comparison rate doesn’t include early repayment fees, late repayment fees or deferred establishment fees, and it only applies to car loans that have a fixed term.

Why is the comparison rate important?

You might be surprised to learn that the loan with the lowest interest rate isn’t always the cheapest. Once you factor in the relevant fees and charges, the true cost of the loan could be very different.

A comparison rate takes into account the:

·       loan amount

·       interest rate

·       loan term

·       fees and charges

·       repayment frequency

The comparison rate paints a more realistic picture of the loan than you can get by simply comparing interest rates. It helps you weigh up your options and find a car loan that best suits your needs.

Where can I find comparison rates?

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on personal loans quickly and easily. Keep in mind, comparison sites could be influenced by advertising. It’s always a good idea to check a variety of sources to see a broad range of options and compare the ratings and rankings.

Next steps

Once you’ve made a short list of the best loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail.

Remember, the best car loans aren’t just about what’s written down in black and white. It’s worth checking customer service ratings and reviews to find a car loan provider with a friendly, helpful and responsive team. Good customer service can make a big difference to your overall experience.

Once you’ve decided on the best car loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit.

Shopping around for the best car loan can save you thousands in interest and fees. Right now, car loan rates range from around 3.00% to 12.00%.

But the interest rate is only half the story.

It’s tempting to jump on the loan with the lowest interest rate. But what about those hidden fees and costs that can catch you off-guard? Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your car loan.

Why is the comparison rate important?

You might be surprised to learn that the car loan with the lowest interest rate isn’t always the cheapest. Once you factor in the relevant fees and charges, the true cost of the loan could be very different.

A comparison rate takes into account the:

·       loan amount

·       interest rate

·       loan term

·       fees and charges

·       repayment frequency

The comparison rate paints a more realistic picture of the car loan than you can get by simply comparing interest rates. It helps you weigh up your options and find a car loan that best suits your needs.

Where can I find comparison rates?

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily. Keep in mind, comparison sites could be influenced by advertising. It’s always a good idea to check a variety of sources to see a broad range of options and compare the ratings and rankings.

Just remember, it doesn’t make sense to compare apples with oranges. Make sure you’re assessing the same loan type. For example, only compare an unsecured loan with other unsecured loans.

In Australia, lenders are required to show a comparison rate as an annual percentage when they advertise an interest rate. It’s a vital tool when researching the cost of the loan but it’s not perfect. Comparison rates don’t include early repayment fees, late repayment fees or deferred establishment fees, and it only applies to car loans that have a fixed term.

Keep these factors in mind when deciding which car loan is right for you:

·       Interest rate: check the comparison rates

·       Loan type: decide between a secured and unsecured loan type

·       Fees: upfront plus ongoing fees

·       Loan term: car loans are generally repaid over 1 – 7 years

·       Features: does the loan include a redraw facility and/or can you make extra repayments without penalty?

·       The Lender: choose a lender with excellent customer service

Will I qualify for a low rate?

The best way to know whether you will qualify for a low rate on a car loan is to know your credit score. Generally speaking, the higher your credit score and the newer the car, the better. Other factors that will impact your chances of being approved include:

·       Strong, steady employment background

·       Home ownership

·       Purpose of the vehicle (business or personal use)

Find out your credit score before you apply for a car loan. You can do this online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time.

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better!

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency.

Next steps.

Once you’ve made a short list of the best car loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail.

Remember, the best car loans aren’t just about what’s written down in black and white. It’s worth checking customer service ratings and reviews to find a lender with a friendly, helpful and responsive team. Good customer service can make a big difference to your overall experience.

Once you’ve decided on the best car loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit. 

Hot tip!

If you want to pay back your car loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early. It’s your life. You’re in control. 

Consider this.

When calculating how much you can afford to borrow, don’t forget to factor in the cost of actually running and maintaining your car, including stamp duty, registration, car insurance, petrol, regular services and road tolls.

If you’re itching to get behind the wheel of your dream car, or you just need something to get you from A to B, a car loan can get you there faster. 

Whether you’re after a new car loan or a used car loan, shopping around for the best deal can save you thousands over the life of the loan. 

So, who’s offering the lowest rate right now?

Right now, car loan rates range from around 3.00% to 12.00%. But the interest rate is only half the story. 

When you’re shopping for a car loan, it’s tempting to go for the loan with the lowest current interest rate. But what about those hidden fees and costs that can catch you off-guard? Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your car loan. 

Where can I find comparison rates?

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily. Keep in mind, comparison sites could be influenced by advertising. It’s always a good idea to check a variety of sources to see a broad range of options and compare the ratings and rankings. 

Just remember, it doesn’t make sense to compare apples with oranges. Make sure you’re assessing the same loan type. For example, only compare an unsecured loan with other unsecured loans. 

In Australia, lenders are required to show a comparison rate as an annual percentage when they advertise an interest rate. 

It’s a helpful tool when researching the cost of the car loan. However, a comparison rate doesn’t include early repayment fees, late repayment fees or deferred establishment fees, and it only applies to car loans that have a fixed term. 

Keep these factors in mind when deciding which car loan is right for you:

• Interest rate: check the comparison rates

• Loan type: decide between a secured and unsecured loan type

• Fees: upfront plus ongoing fees

• Loan term: car loans are generally repaid over 1 – 7 years

• Features: does the loan include a redraw facility and/or can you make extra repayments without penalty?

• The Lender: choose a lender with excellent customer service 

Why is the comparison rate important?

You might be surprised to learn that the car loan with the lowest interest rate isn’t always the cheapest. Once you factor in the relevant fees and charges, the true cost of the loan could be very different. 

A comparison rate takes into account the:

• loan amount

• interest rate

• loan term

• fees and charges

• repayment frequency

The comparison rate paints a more realistic picture of the car loan than you can get by simply comparing interest rates. It helps you weigh up your options and find a car loan that best suits your needs. 

Next steps. 

Once you’ve made a short list of the best car loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail. 

Remember, the best car loans aren’t just about what’s written down in black and white. It’s worth checking customer service ratings and reviews to find a lender with a friendly, helpful and responsive team. Good customer service can make a big difference to your overall experience. 

Once you’ve decided on the best car loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit. 

Hot tip!

If you want to pay back your car loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early. It’s your life. You’re in control.  

Consider this.

When calculating how much you can afford to borrow, don’t forget to factor in the cost of actually running and maintaining your car, including stamp duty, registration, car insurance, petrol, regular services and road tolls. 

Plenti uses risk-based pricing to set the overall cost of your loan. This is good news for you! Risk-based pricing assesses multiple factors, including your full credit history, income and debts, to determine an appropriate interest rate for you.

This means if you’re a trustworthy borrower with a positive history of making repayments on time and sticking to your loan terms, you will be rewarded with a lower, more personalised interest rate. 

The reverse is also true. Risk-based pricing means that borrowers who have a poor credit history, other debts, and/or an unstable income will be charged higher rates of interest. This is because the lender views them as being less likely to repay their loans in full and on time. 

How is it calculated?

When applying risk-based pricing, your lender will look at a many factors to make sure they have a clear picture of your financial behaviour and habits, including things like your: 

• Credit score
• Employment status
  
• Income and expenses
  
• Assets
  
• Collateral
  
• Presence of a guarantor
  
• A steady residential address
  

Comprehensive Credit Reporting (CCR) allows for more accurate risk-based pricing. Consider applying with a lender who participates in CCR and you will be rewarded for your positive financial habits, like making repayments on time. 

What is comprehensive credit reporting?

In Australia, around 50 lenders, including all major banks, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. If you have the ability to take out a car loan, you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

Plenti uses comprehensive credit reporting AND risk-based pricing to determine the right interest rate for your loan. Rather than focusing on any black marks from the past, we understand your full credit history, including good financial behaviour, such as making loan repayments on time. This means we can offer you a personalised interest rate that matches your true credit history and suits your current circumstances. 

When you apply for a car loan, you can expect the lender to check your credit history, current debt and income so they feel confident you can repay the loan. 

Your credit score is a number that sums up the information on your credit report. It tells the lender whether or not you are a trustworthy borrower. 

A poor credit score can make it hard to obtain a car loan with a competitive interest rate. 

What is a good credit score?

Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

Check out this credit score table from Equifax so you know where you stand:

• Excellent: 833 – 1,200
• Very good: 726 – 832
  
• Good: 622 – 725
  
• Average: 510 – 621
  
• Below average to average: 0 – 509
  

If your credit score is over 600, chances are you will be able to secure a car loan interest rate between 5% - 10% per annum. Scores below 510 are likely to attract a higher rate. 

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency. 

Comprehensive credit reporting

Around 50 major Australian lenders, including Plenti, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. If you have the ability to take out a car loan, you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

Give it a polish!

There are ways to clean up your credit report and increase your credit score to improve your chances of being approved for a car loan:

• Pay your rent, mortgage and utility bills on time
• Make credit card repayments on time and try to pay more than the minimum repayment
  
• Lower your credit card limit
  
• Limit how many applications you make for credit
  
• All of these things will help your credit score to improve over time. 
  

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

When it comes to choosing the best personal loan for your unique circumstances, there’s no one-size-fits-all. Your loan conditions should be tailored to suit your budget and income to help you reach your personal goals faster. 

Step one is deciding whether to go for a secured or unsecured loan. So, what’s the difference, and how do you know which one is right for you?

Secured personal loan

If you own an asset, like a car, home or term deposit, you may be able to obtain a lower interest rate with a secured personal loan. When applying for a secured loan, you agree that if you can’t make repayments, the lender gets to take your asset and on-sell it to pay for the loan.

Lenders offer a lower interest rate for secured loans because they view them as less risky. Providing an asset to guarantee your loan may also mean you can borrow a larger amount or pay it back over a longer period than you could with an unsecured loan.

Unsure about whether you have the right assets for a secured personal loan? Depending on the size of the loan, lenders may allow you to secure your loan with a cash or term deposit, property, vehicles, such as a car, boat or motorbike, and even equipment like farm machinery. Valuable items may also be used as collateral for a loan in some cases, like art and jewellery.

Keep in mind, the approval process is often longer for a secured loan, with more documents required, and there are more restrictions around how you can use the funds. For example, if you take out a secured personal loan to purchase a car, the lender may place limits on the minimum value and age of the vehicle being purchased. In some cases, the lender might also restrict you to purchasing a car intended for personal use only.

Unsecured personal loan

An unsecured personal loan doesn’t require an asset (like a car, or house) to protect the lender. This means you can quickly and easily secure the funds that you need without putting your assets on the line. 

Instead of securing the loan with collateral, the lender looks at your credit history, current debt and your ability to make repayments. The loan is paid back over an agreed period of time, with a personal loan interest rate. It’s that simple! 

An unsecured personal loan buys you the freedom to use the funds for almost anything. We’re talking about starting up a business, home renovations, debt consolidation, an overseas holiday, buying a car, or even planning a wedding. 

While some Australian lenders of unsecured personal loans will provide as much as $70,000 to be paid back over seven years, most will allow you to borrow between $2000 and $50,000, paid back across six months to five years. 

With your personal assets safely out of the firing line, the lender can’t claim your possessions or the contents of your bank account if you default on the loan. But remember, if you can’t make repayments, your credit rating will be affected. If your lender passes your account onto a collections agency or takes legal action against you, this information is also recorded on your credit report. A low credit score makes it harder for you to obtain loans or credit in the future.

Make an informed choice

It’s a good idea to shop around and compare the offers you receive from different lenders to make sure you’re securing the best personal loan rate. Getting the best deal on a personal loan can save you thousands in interest and fees. It’s well worth doing your homework!

When deciding between a secured and unsecured personal loan, consider the pros and cons. While a secured loan may offer lower interest rates, are you willing to risk the asset that you provide as collateral? 

You’ll never have to worry about losing your assets if you default on an unsecured loan, but it’s likely to come with higher interest rates and your credit rating will take a hit if you can’t make repayments. 

Whether secured or unsecured, a personal loan should be customised to your unique circumstances so that you can move forward with confidence on your own personal journey.

If you’re in the market for a personal loan, you probably already know you’ll have to pay interest to your lender. But what about those hidden costs that can catch you off-guard? Shopping around for a personal loan with fewer fees can save you thousands in the long run. 

Here are some of the extra charges that could apply to your personal loan:

• Establishment/upfront fee: You could be charged a fee when you apply for a personal loan to cover the cost of assessing your application and preparing loan documents.
• Service fee: Monthly account keeping fees add up over time. It’s worth calculating the total cost for the life of the loan so you’re not caught by surprise.
  
• Late payment fee: Your lender may charge a fee if you default on your loan or miss a payment.
  

• Early repayment fee: Do you hope to pay your loan off sooner? Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.
•  Other fees: Check out the terms and conditions of your loan for a full list of fees and charges.

At Plenti, we believe in tailoring unsecured personal loans to suit your unique financial situation and lifestyle. This means rewarding your strong credit history with attractive rates that are personalised to you and offering the flexibility to pay it back faster. In fact, we’ll never charge you fees or penalties for paying your loan back early. 

It’s your life. You’re in control. 

Hot tip!

Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. This means the comparison rate will be higher than the interest rate charged on the loan. In Australia, lenders are required to show a comparison rate when they advertise an interest rate.  

For personal loans, there is a standardised measure for how comparison rates are calculated:

• For personal loans 3 years and under comparison rates are calculated on a $10,000 loan amount over 36 months.
• For personal loans 4 years and over comparison rates are calculated on a $30,000 loan amount over 60 months.
  

An establishment fee is a common fee charged by lenders when you apply for a loan. It might also be called an ‘application’ fee or ‘upfront’ fee. 

An establishment fee covers the costs of processing your application, including things like administrative costs, credit assessment, loan set-up and document preparation. 

Make sure you take the establishment fee into account when calculating the full cost of your loan over its lifetime.

How is it charged?

This fee can be charged in several ways:

A flat fee is a standard amount that doesn’t change, no matter how much you’re borrowing. 

A tiered fee is based on the total amount borrowed. For example, it could be $250, $500 or $750, depending on the size of the loan. 

A percentage fee is based on the total amount borrowed and your credit profile. For example, it could be 4% of the loan amount. 

A hybrid fee is a combination of a flat fee and a percentage fee. For example, $200 + 2% of the loan value.

Your establishment fee is usually added to the amount you wish to borrow, rather than paid up front. This means if you’re borrowing $10,000 with an establishment fee of $300, your total loan amount will be $10,300.  

Why is this important?

By adding the establishment fee to the total loan amount, it means you pay interest on a higher amount. For example, if you borrow $30,000 with an establishment fee of 4%, your total loan amount is $31,200. This means you’ll be paying interest on the full $31,200 balance. You’d be surprised at how this adds up over the course of the loan!

Let’s do the maths

When you’re comparing lenders, make sure you check the establishment fee. Some lenders who charge lower interest make up for it with a high establishment fee. This means you could end up paying more overall. 

Some lenders don’t charge an establishment fee but it’s important to look at the full picture. They may instead charge higher interest rates or monthly servicing fees.

In Australia, lenders are required to show a comparison rate when they advertise an interest rate. Comparison rates do the hard maths for you by rolling together the interest rate, establishment fee and monthly fee into one percentage figure.

It’s a good idea to check the comparison rate to better understand the loan’s true cost and then compare them to identify the best lender.

So, you’re ahead of the game? High five!

Making extra repayments on your personal loan is not only admirable, it could also mean you’ll repay your loan earlier and save a chunk of money on interest.

But if circumstances change along the way, you might need some extra funds. That’s where your redraw facility comes in. If your personal loan has a redraw facility, you can access the additional repayments for your own use.

Best of both worlds.

One advantage of a redraw facility is that it allows you to pay down your personal loan which will also lower the amount of interest you have to pay, while allowing you access to any extra repayments if you need them.

What’s the catch?

First, you’ll need to check whether your personal loan includes a redraw facility as part of its conditions. Usually, personal loans with a variable rather than fixed interest rate offer a redraw option.

Keep in mind, redraw facilities are designed for occasional use only and you can only access those extra repayments over and above the monthly required amount. Your lender might also need you to make a certain number of additional repayments before you’ll be permitted to redraw the funds.

Also, be aware that you may be hit with a fee if you redraw the money, so it’s a good idea to check with your lender before you proceed.

What’s the alternative?

If you find yourself in a situation where you need to redraw more funds than you have available, or you’re concerned about being stung with a redraw fee, you might want to consider refinancing your personal loan instead.

Need a little top up?

When you refinance your personal loan, it means you take out a new loan to repay the existing loan.

Refinancing your personal loan can be a great way to reach your financial goals faster. If you find a better deal with a lower interest rate or you wish to consolidate multiple debts, refinancing can work to your advantage.

Why refinance?

The two main reasons people choose to refinance their personal loan is to take advantage of a lower interest rate or to consolidate debts. Rolling together outstanding credit cards and other personal loans into one simple repayment each month makes your budget easier to manage. And by locking in a more competitive interest rate, you could clear your debt faster while saving money!

Everything in moderation

So, why not refinance every time a better deal comes along? It might sound like a good idea, but refinancing multiple times will impact your credit score.

The aim of the game is to keep your credit score as high as possible so that you’re more likely to be approved when you apply for a loan. When you take out a loan of any kind, your credit score decreases slightly. This is okay, as long as you make repayments on time and pay back the loan by the due date.

However, repeated applications for a loan within a short time frame could harm your credit score, making it more difficult to obtain a loan in the future.

But remember, refinancing a personal loan is always better than defaulting! If refinancing a loan helps you stick with your repayment schedule, you might even improve your credit score in the process.

Are you eligible to refinance?

Tick the boxes before you start! To refinance your personal loan, make sure:

• You are aged 21 or over
• You are an Australian citizen or permanent resident
  
• You have a regular source of income that you can demonstrate
  
• You have a good credit history

To see if you qualify for a Plenti personal loan, you can get a RateEstimate. It only takes 1 minute and won’t affect your credit score. We will simply ask you a few questions so we can calculate an initial estimate of your borrowing potential, along with the rates, fees and charges that may apply to your loan.

Before you refinance

Spend a little time doing your homework before you take the plunge:

1.   Check your credit rating. You can do this online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.
2. Check the comparison rates of various loans to find the most competitive option.
   
3. Calculate the cost of an early repayment fee (if there is one) on your existing loan and establishment/upfront fees on your new loan.
   
4. To see if you qualify for a Plenti personal loan, you can get a RateEstimate. It only takes 1 minute and won’t affect your credit score. We will simply ask you a few questions so we can calculate an initial estimate of your borrowing potential, along with the rates, fees and charges that may apply to your loan.
   

What will it cost?

If you’re looking to refinance, you’re probably seeking a loan with the lowest interest rate. But what about those hidden costs that can catch you off-guard? Shopping around for a personal loan with fewer fees can save you thousands in the long run.

Here are some of the extra charges that could apply to your new loan:

• Establishment/upfront fee: You could be charged a fee when you apply for a personal loan to cover the cost of assessing your application and preparing loan documents.
• Service fee: Monthly account keeping fees add up over time. It’s worth calculating the total cost for the life of the loan so you’re not caught by surprise.
  
• Late payment fee: Your lender may charge a fee if you default on your loan or miss a payment.
  
• Early repayment fee: Do you hope to pay your loan off sooner? Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.
  
• Other fees: Check out the terms and conditions of your loan for a full list of fees and charges.
  

Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. This means the comparison rate will be higher than the interest rate charged on the loan. In Australia, lenders are required to show a comparison rate when they advertise an interest rate. 

It’s a helpful tool when researching the cost of the loan. It allows you to compare loans to find the perfect one for you. But remember, a comparison rate doesn’t include early repayment fees, late repayment fees or deferred establishment fees.

Refer to the terms and conditions of your loan if you’re unsure about these extra charges.

Refinancing is as easy as 1, 2, 3

1. Get your rate: Discover your personalised interest rate in just 1 minute. It’s fast, simple and won’t have any impact on your credit score.
2. Apply in 10 minutes: Make sure you have your driver’s license or passport, an address verification document (like an electricity bill), bank details and existing loan documents handy. You will be asked to verify your income and expenses and may be asked for bank statements or payslips.
   
3. Enjoy your funds: Once your loan is approved your funds will be with you the next business day.

What do I need to apply?

Refinancing your existing personal loan is easy.

First, to verify your identification, we’ll ask to see one or more of these documents:

•  Australian state or Territory-issued driver’s license
•  Australian or foreign passport
  
•  A document proving your address, such as an electricity bill

Next, we need to assess whether the loan you’re applying for suits your current life circumstances. To do this, we’ll look at your:

•  Employment stability
• Income
  
• Expenses
  
•  Repayment history
  
• Credit rating

We will ask for bank statements and/or payslips to verify your income and expenses.

Lastly, you will need to provide the following documents to verify your existing loan:

• Current loan statement showing the last 12 months of transactions
• Loan payout letter from your existing lender

If it sounds confusing, don’t worry. We’ll remind you of all the documents you need to provide during the loan application process.

To put it simply, an interest rate is the amount of interest that you will pay on your personal loan each year. The interest rate on your personal loan varies between lenders and depends on things like your credit score, income and whether the loan is secured or unsecured.

How can I find the lowest interest rate?

The interest rate on your personal loan might end up being different to the advertised rate. Sound confusing? The reason for this is because your lender will assess your personal circumstances, including your credit history, other debts and savings. If you have a low credit score or your income is unstable, you might only qualify for loans with high interest rates.

It’s a good idea to check the comparison rates on a wide range of loans to make sure you find the best deal. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. This means the comparison rate will be higher than the interest rate charged on the loan. In Australia, lenders are required to show a comparison rate when they advertise an interest rate. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare personal loans quickly and easily by providing the comparison rates.

Keep in mind, comparison sites could be influenced by advertising. It’s always worth checking a variety of sources to see a broad range of options and compare the ratings and rankings. And remember, comparison rates don’t include early repayment fees, late repayment fees or deferred establishment fees.

Once you’ve made a short list of the best loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail. Finally, contact the loan provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit.

Are interest rates fixed or variable?

Have a think about whether you prefer a variable interest rate, rather than a fixed rate. A variable rate could fluctuate throughout the life of the loan, which means your repayments may increase or decrease from time to time.

On the other hand, a fixed interest rate provides a sense of certainty. You’ll know exactly how much will come out of your bank account each month and you’re protected from the possibility of future interest rate rises.

A loan with a variable interest rate usually has no early exit fee. This means you won’t be penalised if you pay back the loan early. Consider the full picture when deciding which option works best for you.

Can I qualify for a low interest rate?

The interest rate that you receive will be influenced by many factors, including your income, expenses and credit score. 

You can find out your credit score for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar. Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time.

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! If your credit score is low, there may be steps you can take to polish it up.

Having a guarantor on your personal loan might improve your chances of securing a lower interest rate. This means a friend or family member co-signs the loan and agrees to accept responsibility for the repayments if you default for any reason. A guarantor personal loan may come with a lower interest rate because your guarantor acts as a type of security, making it less risky for your provider to loan you the funds.

If you’re shopping around for a personal loan, you’re probably comparing interest rates between lenders. But what about those hidden fees and costs that can catch you off-guard? Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan.

In Australia, lenders are required to show a comparison rate as an annual percentage when they advertise an interest rate. 

It’s a helpful tool when researching the cost of the loan. But remember, a comparison rate doesn’t include early repayment fees, late repayment fees or deferred establishment fees, and it only applies to personal loans that have a fixed term.

Why is the comparison rate important?

Why is the comparison rate important?

You might be surprised to learn that the loan with the lowest interest rate isn’t always the cheapest. Once you factor in the relevant fees and charges, the true cost of the loan could be very different.

A comparison rate takes into account the:

• loan amount
• interest rate
  
• loan term
  
• fees and charges
  
• repayment frequency
  

The comparison rate paints a more realistic picture of the loan than you can get by simply comparing interest rates. It helps you weigh up your options and find a personal loan that best suits your needs.

Where can I find comparison rates?

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on personal loans quickly and easily. Keep in mind, comparison sites could be influenced by advertising. It’s always a good idea to check a variety of sources to see a broad range of options and compare the ratings and rankings.

Next steps

Once you’ve made a short list of the best loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail.

Remember, the best personal loans aren’t just about what’s written down in black and white. It’s worth checking customer service ratings and reviews to find a personal loan provider with a friendly, helpful and responsive team. Good customer service can make a big difference to your overall experience.

Once you’ve decided on the best personal loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit.

When you apply for a personal loan, you have the option to choose between a fixed or variable interest rate.

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation.

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan.

Pros

•  You know exactly how much your repayments are each month.
•  You can plan and budget with certainty, knowing your repayments won’t change.
  
•  You’re protected from future interest rate rises.

Cons

• If the market interest rate falls, you pay more interest with a fixed rate.
• Some lenders may insist upon a shorter lending period.
  
• Fixed rate personal loans may not have a redraw facility.
  
• If you want to pay back your loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early.
  

Variable Interest Rate

A variable rate rises and falls with the market interest rate as it responds to current economic conditions. This means you could end up paying more or less for your loan, depending on the market rate. 

Pros

•  If the market rate drops, you could pay less for your loan overall.
• Most lenders offer longer repayment terms with a variable interest rate.
  
• You may have the option to make additional repayments which could save you money over the life of your loan.
  
• You may be able to redraw from any additional repayments you have made if you need some extra cash along the way.

Cons

• If the market rate rises your repayments increase.
• Interest rate rises are unpredictable and could make it harder to budget and make plans for the future.

Choosing between a fixed or variable interest rate is an important decision that could have a big financial impact down the track. Some people prefer the predictability of a fixed rate personal loan, while others prefer the flexibility of a variable rate.

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on personal loans quickly and easily. Once you’ve decided on the best personal loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit.

When you apply for a personal loan, you can expect the lender to check your credit history, current debt and income so they feel confident you can repay the loan. 

Your credit score is a number that sums up the information on your credit report. It tells the lender whether or not you are a trustworthy borrower. 

A poor credit score can make it hard to obtain a personal loan with a competitive interest rate.

What is a good credit score?

Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

Check out this credit score table from Equifax so you know where you stand:

• Excellent: 833 – 1,200
• Very good: 726 – 832
  
• Good: 622 – 725
  
• Average: 510 – 621
  
• Below average to average: 0 – 509
  

If your credit score is over 600, chances are you will be able to secure a car loan interest rate between 5% - 10% per annum. Scores below 510 are likely to attract a higher rate. 

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency.

Comprehensive credit reporting

Around 50 major Australian lenders, including Plenti, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. If you have the ability to take out a personal loan, you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

Give it a polish!

There are ways to clean up your credit report and increase your credit score to improve your chances of being approved for a personal loan:

• Pay your rent, mortgage and utility bills on time
• Make credit card repayments on time and try to pay more than the minimum repayment
  
• Lower your credit card limit
  
• Limit how many applications you make for credit 

All of these things will help your credit score to improve over time. 

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
  
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Plenti uses risk-based pricing to set the overall cost of your loan. This is good news for you! Risk-based pricing assesses multiple factors, including your full credit history, income and debts, to determine an appropriate interest rate for you.

This means if you’re a trustworthy borrower with a positive history of making repayments on time and sticking to your loan terms, you will be rewarded with a lower, more personalised interest rate. 

The reverse is also true. Risk-based pricing means that borrowers who have a poor credit history, other debts, and/or an unstable income will be charged higher rates of interest. This is because the lender views them as being less likely to repay their loans in full and on time.

How is it calculated?

When applying risk-based pricing, your lender will look at a many factors to make sure they have a clear picture of your financial behaviour and habits, including things like your: 

• Credit score
• Employment status
• Income and expenses
  
• Assets
• Collateral
• Presence of a guarantor
  
• A steady residential address
  

Comprehensive Credit Reporting (CCR) allows for more accurate risk-based pricing. Consider applying with a lender who participates in CCR and you will be rewarded for your positive financial habits, like making repayments on time. 

What is comprehensive credit reporting?

In Australia, around 50 lenders, including all major banks, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. If you have the ability to take out a personal loan, you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

Plenti uses comprehensive credit reporting AND risk-based pricing to determine the right interest rate for your loan. Rather than focusing on any black marks from the past, we understand your full credit history, including good financial behaviour, such as making loan repayments on time. This means we can offer you a personalised interest rate that matches your true credit history and suits your current circumstances. 

In Australia, around 50 lenders, including all major banks, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. If you have the ability to take out a personal loan, you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

Plenti uses comprehensive credit reporting AND risk-based pricing to determine the right interest rate for your loan. Rather than focusing on any black marks from the past, we understand your full credit history, including good financial behaviour, such as making loan repayments on time. This means we can offer you a personalised interest rate that matches your true credit history and suits your current circumstances. 

What is risk-based pricing?

Plenti uses risk-based pricing to set the overall cost of your loan. This is good news for you! Risk-based pricing assesses multiple factors, including your full credit history, income and debts, to determine an appropriate interest rate for you.

This means if you’re a trustworthy borrower with a positive history of making repayments on time and sticking to your loan terms, you will be rewarded with a lower, more personalised interest rate. 

The reverse is also true. Risk-based pricing means that borrowers who have a poor credit history, other debts, and/or an unstable income will be charged higher rates of interest. This is because the lender views them as being less likely to repay their loans in full and on time.

How is it calculated?

When applying risk-based pricing, your lender will look at a many factors to make sure they have a clear picture of your financial behaviour and habits, including things like your:

• Credit score
• Employment status
• Income and expenses
  
• Assets
  
• Collateral
  
• A steady residential address
  

Comprehensive Credit Reporting (CCR) allows for more accurate risk-based pricing. Consider applying with a lender who participates in CCR and you will be rewarded for your positive financial habits, like making repayments on time. 

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

We all want tomorrow to be better than today - and most of us have a big idea in mind and know just where we’d like to start. No matter what you’re looking to plan, a personal loan can get you there faster.

The cheapest personal loan is bound to be the one with the lowest interest rate, right? Well, not necessarily.

Up-front fees, ongoing service charges and other hidden costs can make your personal loan more expensive than you bargained for. It’s also important to consider the features of your personal loan. A loan with slightly higher interest rate might allow you to make extra repayments and pay off the loan early, reducing the cost of your loan overall.

Here are some of the extra charges that could apply to your personal loan:

• Establishment/upfront fee: You could be charged a fee when you apply for a personal loan to cover the cost of assessing your application and preparing loan documents.
• Service fee: Monthly account keeping fees add up over time. It’s worth calculating the total cost for the life of the loan so you’re not caught by surprise.
  
• Late payment fee: Your lender may charge a fee if you default on your loan or miss a payment.
  
• Early repayment fee: Do you hope to pay your personal loan off sooner? Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.
  
• Other fees: Check out the terms and conditions of your car loan for a full list of fees and charges.
  

It’s worth taking the time to understand how personal loans work. Finding the right loan for your personal circumstances will help you enjoy your tomorrows even more.

Take your pick

Whether you’re planning to complete your studies, marry in style or take to the water, a personal loan can be a great way to make your dreams come true when you don’t have enough savings to go ahead outright.

Personal  loans usually range from $5,000 to $100,000 with loan terms from one to 10 years. Interest rates can be as low as 2.99% up to 10% for secured loans, and up to 15% for unsecured loans.

The amount you can borrow depends on your financial situation, including your income, expenses and other debts. Lenders will also check out your credit history to assess whether you’re a trustworthy borrower. 

It’s helpful to research your options when deciding which type of personal loan is right for you.

Fixed or variable interest rate?

When you apply for a personal loan, you have the option to choose between a fixed or variable interest rate.

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation.

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan.

Pros

• You know exactly how much your repayments are each month.
•  You can plan and budget with certainty, knowing your repayments won’t change.
  
• You’re protected from future interest rate rises.

The reality is that most of us have an idea we’d like to make a reality - that will make a real difference to our lives. If you are unable to save enough to go ahead right away, one, a personal loan can help bridge the gap in your budget and keep you moving forward.

Sometimes unexpected emergencies arise that put us in a tricky financial situation. Perhaps a lender rejected your car loan application due to poor credit or you have a history of making late payments to lenders. Maybe you simply haven’t built up enough years of credit history to acquire a good credit score. No matter how you got there, it’s worth understanding your options for obtaining a car loan without a credit check.

It is a legal requirement in Australia for lenders to act responsibility when providing loans. This includes carrying out credit checks on all applicants to ensure the borrower will be able to repay the loan without falling into financial hardship.

A bad credit score can make it tough to get a car loan, as lenders may view you as a ‘risky’ borrower. But don’t lose heart. Your credit score isn’t the only factor that lenders consider when deciding whether to approve you for a car loan and some lenders are willing to offer finance with no credit check needed.

Things to consider

Before you apply for a car loan, remember that lenders who are willing to provide funds without checking your credit history are likely to charge you higher fees and interest rates because they view you as a ‘risky’ borrower. They may also require a large deposit before they will loan you the funds.

If you already have significant debts or you’ve struggled to repay loans in the past, a car loan may not be the best option for you. If you’ve fallen into financial hardship, you can seek help from qualified professionals free of charge through the National Debt Helpline (NDH). Call 1800 007 007 to find a counsellor near you.

Whether it’s time to consolidate your debts or plan your dream wedding, sometimes we all need a little help. A renovation loan can bridge the gap in your budget and help you reach your goals faster.

When you apply for a renovation loan, some lenders will allow you to have a family member or friend act as a guarantor. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. 

Pros and cons

Having a guarantor on your renovation loan might improve your chances of being approved, especially if you are self-employed or have a low credit score. This is because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds.

You might also be able to secure a lower interest rate if you have a guarantor on your renovation loan, which means you’ll save money over the life of the loan.

These are some of the pros to having a guarantor on your renovation loan. But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics.

Before you take this step, make sure you can afford the monthly repayments in addition to your other bills. Are you sure your income and expenses will remain the same throughout the whole term of the loan? If your circumstances change, could you still afford this additional debt?

Who can go guarantor?

Every lender is different. While all of them will allow your parents or guardians to take on the role of guarantor, others might also allow relatives, like siblings and grandparents. In some cases, lenders may even permit friends to act as guarantors, if you can prove a long and steady relationship.

Make sure your guarantor meets these basic criteria:

• Over 18 years of age.
• A citizen or permanent resident of Australia.
  
• A good credit rating.
  
• Able to prove their income and employment.
  
• Able to show sufficient savings and have an asset they can put up as security against the renovation loan.

Secured guarantor renovation loans

When a family member or friend acts as guarantor, they may choose to use their car, property or other valuable asset as security for the renovation loan. This means that if you’re unable to repay the loan, the lender has the right to seize and sell the asset to cover the cost of the loan.

A secured loan is less risky for the lenders, which often means they’ll offer a lower interest rate and may allow you to borrow a larger amount than would be available to you if the loan was unsecured.

Unsecured guarantor renovation loans

In the case of an unsecured guarantor renovation loan, you and your guarantor don’t need to provide an asset as security against the loan. Instead, the lender looks at the credit history of both you and your guarantor, and your ability to make repayments.

The good news is your guarantor’s renovation assets are safely out of the firing line if you default on the loan. But if you can’t make repayments, the credit rating of both you and your guarantor will be affected.

A low credit score will make it harder for both of you to obtain loans or credit in the future. This could impact not only your financial health, but also the health of your relationship with your loved one.

Lenders tend to view unsecured guarantor renovation loans as riskier, which means they come with a higher interest rate than secured guarantor renovation loans. Spend some time comparing the different types of loans on the market before you decide on a secured or unsecured renovation loan.

For guarantors: Things to consider

Going guarantor for a loved one brings with it the emotional satisfaction of knowing you are helping them achieve their goals and take control of their finances.

Before you take on this financial responsibility, make sure you understand exactly what you’re getting into. Here are some things to consider:

·       If the borrower cannot make repayments, you will be responsible for paying back the loan, including interest and fees. If you are unable to pay it back, the lender may take the asset you nominated as security, such as your car or home, to cover the cost of the loan.

·       If things don’t work out, it could damage your relationship.

·       Going guarantor on a renovation loan will appear on your credit record, even if the borrower repays the loan on time. This could affect your ability to secure loans and credit in the future.

·       If the borrower misses a payment, it could be listed as a default on your credit report. A low credit score makes it hard for you to take out a loan in the future.

·       Could going guarantor impact your own long-term financial goals, such as retirement?

·       Are you better off gifting the money or loaning the funds directly to your loved one?

If you’ve decided to go ahead as guarantor, make sure you do your homework to safeguard against any nasty surprises down the track.

·       Take the time to understand the loan conditions, including the amount, interest rate, fees and loan term.

When it comes to choosing the best renovation loan for your unique circumstances, there’s no one-size-fits-all. Your loan conditions should be tailored to suit your budget and income to help you reach your renovation goals faster. 

Step one is deciding whether to go for a secured or unsecured loan. So, what’s the difference, and how do you know which one is right for you?

Secured renovation loan

If you own an asset, like a car, home or term deposit, you may be able to obtain a lower interest rate with a secured renovation loan. When applying for a secured loan, you agree that if you can’t make repayments, the lender gets to take your asset and on-sell it to pay for the loan.

Lenders offer a lower interest rate for secured loans because they view them as less risky.  Providing an asset to guarantee your loan may also mean you can borrow a larger amount or pay it back over a longer period than you could with an unsecured loan. 

Unsure about whether you have the right assets for a secured renovation loan? Depending on the size of the loan, lenders may allow you to secure your loan with a cash or term deposit, property, vehicles, such as a car, boat or motorbike, and even equipment like farm machinery. Valuable items may also be used as collateral for a loan in some cases, like art and jewellery. 

Keep in mind, the approval process is often longer for a secured loan, with more documents required, and there are more restrictions around how you can use the funds. For example, if you take out a secured renovation loan to purchase a car, the lender may place limits on the minimum value and age of the vehicle being purchased. In some cases, the lender might also restrict you to purchasing a car intended for renovation use only. 

Unsecured renovation loan

An unsecured renovation loan doesn’t require an asset (like a car, or house) to protect the lender. This means you can quickly and easily secure the funds that you need without putting your assets on the line. 

Instead of securing the loan with collateral, the lender looks at your credit history, current debt and your ability to make repayments. The loan is paid back over an agreed period of time, with a renovation loan interest rate. It’s that simple! 

An unsecured renovation loan buys you the freedom to use the funds for almost anything. We’re talking about starting up a business, home renovations, debt consolidation, an overseas holiday, buying a car, or even planning a wedding. 

While some Australian lenders of unsecured renovation loans will provide as much as $70,000 to be paid back over seven years, most will allow you to borrow between $2000 and $50,000, paid back across six months to five years. 

With your renovation assets safely out of the firing line, the lender can’t claim your possessions or the contents of your bank account if you default on the loan. But remember, if you can’t make repayments, your credit rating will be affected. If your lender passes your account onto a collections agency or takes legal action against you, this information is also recorded on your credit report. A low credit score makes it harder for you to obtain loans or credit in the future.

Make an informed choice

It’s a good idea to shop around and compare the offers you receive from different lenders to make sure you’re securing the best renovation loan rate. Getting the best deal on a renovation loan can save you thousands in interest and fees. It’s well worth doing your homework!

When deciding between a secured and unsecured renovation loan, consider the pros and cons. While a secured loan may offer lower interest rates, are you willing to risk the asset that you provide as collateral? 

You’ll never have to worry about losing your assets if you default on an unsecured loan, but it’s likely to come with higher interest rates and your credit rating will take a hit if you can’t make repayments. 

Whether secured or unsecured, a renovation loan should be customised to your unique circumstances so that you can move forward with confidence on your own renovation journey.

An establishment fee is a common fee charged by lenders when you apply for a loan. It might also be called an ‘application’ fee or ‘upfront’ fee. 

An establishment fee covers the costs of processing your application, including things like administrative costs, credit assessment, loan set-up and document preparation. 

Make sure you take the establishment fee into account when calculating the full cost of your loan over its lifetime. 

How is it charged?

This fee can be charged in several ways:

A flat fee is a standard amount that doesn’t change, no matter how much you’re borrowing. 

A tiered fee is based on the total amount borrowed. For example, it could be $250, $500 or $750, depending on the size of the loan. 

A percentage fee is based on the total amount borrowed and your credit profile. For example, it could be 4% of the loan amount. 

A hybrid fee is a combination of a flat fee and a percentage fee. For example, $200 + 2% of the loan value.

Your establishment fee is usually added to the amount you wish to borrow, rather than paid up front. This means if you’re borrowing $10,000 with an establishment fee of $300, your total loan amount will be $10,300.  

Why is this important?

By adding the establishment fee to the total loan amount, it means you pay interest on a higher amount. For example, if you borrow $30,000 with an establishment fee of 4%, your total loan amount is $31,200. This means you’ll be paying interest on the full $31,200 balance. You’d be surprised at how this adds up over the course of the loan!

Let’s do the maths

When you’re comparing lenders, make sure you check the establishment fee. Some lenders who charge lower interest make up for it with a high establishment fee. This means you could end up paying more overall. 

Some lenders don’t charge an establishment fee but it’s important to look at the full picture. They may instead charge higher interest rates or monthly servicing fees.

In Australia, lenders are required to show a comparison rate when they advertise an interest rate. Comparison rates do the hard maths for you by rolling together the interest rate, establishment fee and monthly fee into one percentage figure.

It’s a good idea to check the comparison rate to better understand the loan’s true cost and then compare them to identify the best lender. 

An upfront fee is a common fee charged by lenders when you apply for a loan. It might also be called an ‘application’ fee or ‘establishment’ fee. 

An upfront fee covers the costs of processing your application, including things like administrative costs, credit assessment, loan set-up and document preparation. 

The best plan is to take the upfront fee into account when calculating the full cost of your loan over its lifetime. 

How is it charged?

This fee can be charged in several ways:

A flat fee is a standard amount that doesn’t change, no matter how much you’re borrowing. 

A tiered fee is based on the total amount borrowed. For example, it could be $250, $500 or $750, depending on the size of the loan. 

A percentage fee is based on the total amount borrowed and your credit profile. For example, it could be 4% of the loan amount. 

A hybrid fee is a combination of a flat fee and a percentage fee. For example, $200 + 2% of the loan value.

Your upfront fee is usually added to the amount you wish to borrow, rather than paid up front. This means if you’re borrowing $10,000 with an upfront fee of $300, your total loan amount will be $10,300.  

Why is this important?

By adding the upfront fee to the total loan amount, it means you pay interest on a higher amount. For example, if you borrow $30,000 with an upfront fee of 4%, your total loan amount is $31,200. This means you’ll pay interest on the full $31,200 balance. You’d be surprised at how this adds up over the course of the loan!

Let’s do the maths

When you’re comparing lenders, make sure you check the upfront fee. Some lenders who charge lower interest make up for it with a high percentage upfront fee. This means you could end up paying more overall. 

Some lenders don’t charge an upfront fee but it’s important to look at the full picture. They may instead charge higher interest rates or monthly servicing fees.

In Australia, lenders are required to show a comparison rate when they advertise an interest rate. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and monthly fee into one percentage figure.

It’s a good idea to check the comparison rate to better understand the loan’s true cost and then compare them to identify the best lender. 

Even if you’re no mathematician, you’re probably aware that the earlier you pay off your debt, the less interest you’ll pay overall. There may come a time during the life of your renovation loan where you find yourself able to pay the loan off more quickly. Or perhaps you’ve been able to budget and save enough to pay the loan back entirely (high five if this is you!).

Before you throw your ‘debt-free’ party, it’s important to check whether you’ll be stung with an early repayment fee for paying back your loan early. An early repayment fee, or ‘break cost’, is a penalty charged if you pay back more than your fixed monthly repayment or pay the whole loan off too early.

The whole story.

It might seem rough that you’re hit with a fee for your financial diligence, but there is a method in the madness. Early repayment fees are designed to cover the lender’s loss incurred if you end your loan early.

To fully understand why these fees are sometimes imposed, it helps to know the backstory of your loan (cue flashback music): 

1.  Your renovation loan is approved

2.  Your lender borrows money in order to provide your loan

3.  Your lender uses the interest you pay on YOUR loan in order to make payments on THEIR loan

4.  You choose to repay your loan early

5.  Your lender charges an early repayment fee to cover their losses caused by the interest you will no longer be paying

To fee or not to fee?

That’s a good question! It’s worth doing the sums to figure out whether you’re better off suffering the dreaded early repayment fee in order to finish your loan early. You may still be ahead of the game by reducing the amount of interest you’ll pay over the long term.

The fee is usually calculated by looking at the remaining loan balance and loan term. For example, fixed rate renovation loans often charge an “economic cost” or “fixed cost” for repaying a loan earlier than expected.

If you’re feeling unsure, call your lender to discuss the early repayment fee so that you know exactly how much you’ll be expected to pay.

The good news.

This is one fee you can avoid.

Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.

At Plenti, we believe in tailoring renovation loans to suit your unique financial situation and lifestyle. This means rewarding your strong credit history with attractive rates that are personalised to you and offering the flexibility to pay it back faster. In fact, we’ll never charge you fees or penalties for paying your loan back early.

This means you can increase your scheduled monthly repayment, make an extra payment, or pay off the loan in full at any time without being stung for extra charges.

It’s your life – you’re in control.

You’ll need to provide some documents to back up the information in your personal loan application. 

Lenders ask for these documents to prove your identity and financial situation so that they can assess whether you will be a trustworthy borrower. Basically, they want to know that you have the ability to repay the personal loan without falling into financial difficulty. 

Follow our guide for an overview of the type of documents you may need to provide when you apply for your personal loan:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill that confirms your address.
  
• Proof of income, such as recent payslips, a tax return, a group certificate or current bank statements. Lenders may also ask for a letter from your employer stating your employment details.
  
• Proof of savings, such as bank statements or investment documents that show you have the ability to regularly save money from your income.
  
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.
  
• Contact details for people who can authenticate these details, such as your employer, landlord or accountant.
  

These days, the process of applying for a personal loan is quick and hassle-free. With most of the application handled online, it’s possible to complete your application and be approved for a personal loan within 48 hours.  

Make a move

It’s worth taking a minute to request a RateEstimate to find out if you’re eligible to apply for a loan with Plenti. It will also provide you with an estimate of the fees, charges and interest rate that may apply to your loan. 

If you’re happy with your rate estimate, we’ll typically finalise successful loans within a day or two of receiving your complete application. It’s that simple! 

Remember, requesting a free RateEstimate only takes 1 minute. It won’t impact your credit score and there’s absolutely no obligation for you to proceed with a loan application. 

To be eligible for a Plenti personal loan you must:

• Be aged 21 or over
• Be an Australian citizen or permanent resident
  
• Be earning over $25,000 per year from a regular source of income that you can demonstrate
  
• Have a good credit history
  

Plenti will consider a loan application if you are self-employed. Additional credit assessment criteria and requirements may apply.

Make the first move and you could be moving forward sooner than you think. 

Necessary paperwork

Lenders will ask for a range of documents to prove your identity and financial situation so that they can assess whether you will be a trustworthy borrower. Basically, they want to know that you have the ability to repay the personal loan without falling into financial difficulty. 

It’s a good idea to prepare your paperwork ahead of time to speed up the process. Here is an overview of the type of documents you may need to provide when you apply for your personal loan:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill that confirms your address.
  
• Proof of income, such as recent payslips, a tax return, a group certificate or current bank statements. Lenders may also ask for a letter from your employer stating your employment details.
  
• Proof of savings, such as bank statements or investment documents that show you have the ability to regularly save money from your income.
  
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.

Number crunch! 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Next, figure out how much you can contribute as a deposit, should you be approved for a personal loan. 

Make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees

Experiencing delays?

There are a few things that could stand in the way of a speedy personal loan approval process.:

A poor credit score: If you have a poor credit score or no credit history, you may find it more difficult to be approved for a personal loan. 

Limited deposit: If you have no deposit saved, or your deposit is too small, it may slow down the approval process and you may be required to provide more documentation.

Incomplete paperwork: If you are unable to provide all the required information about yourself, the approval process will be delayed.  

These days, the process of applying for a personal loan is quick and hassle-free. With most of the application handled online, it’s possible to complete your application and be approved for a personal loan within 48 hours.

Make a move

It’s worth taking a minute to request a RateEstimate to find out if you’re eligible to apply for a loan with Plenti. It will also provide you with an estimate of the fees, charges and interest rate that may apply to your loan. 

If you’re happy with your rate estimate, we’ll typically finalise successful loans within a day or two of receiving your complete application. It’s that simple! 

Remember, requesting a free RateEstimate only takes 1 minute. It won’t impact your credit score and there’s absolutely no obligation for you to proceed with a loan application. 

To be eligible for a Plenti personal loan you must:

• Be aged 21 or over
• Be an Australian citizen or permanent resident
  
• Be earning over $25,000 per year from a regular source of income that you can demonstrate
  
• Have a good credit history
  
• Plenti will consider a loan application if you are self-employed. Additional credit assessment criteria and requirements may apply.
  
• Make the first move and you could be moving forward sooner than you think. 
  

Necessary paperwork

Lenders will ask for a range of documents to prove your identity and financial situation so that they can assess whether you will be a trustworthy borrower. Basically, they want to know that you have the ability to repay the personal loan without falling into financial difficulty. 

It’s a good idea to prepare your paperwork ahead of time to speed up the process. Here is an overview of the type of documents you may need to provide when you apply for your personal loan:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill that confirms your address.
  
• Proof of income, such as recent payslips, a tax return, a group certificate or current bank statements. Lenders may also ask for a letter from your employer stating your employment details.
  
• Proof of savings, such as bank statements or investment documents that show you have the ability to regularly save money from your income.
  
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.
  
• Contact details for people who can authenticate these details, such as your employer, landlord or accountant.
  

Number crunch! 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Next, figure out how much you can contribute as a deposit, should you be approved for a personal loan. 

Once you have a particular personal loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees

Experiencing delays?

There are a few things that could stand in the way of a speedy personal loan approval process.:

A poor credit score: If you have a poor credit score or no credit history, you may find it more difficult to be approved for a personal loan. 

Limited deposit: If you have no deposit saved, or your deposit is too small, it may slow down the approval process and you may be required to provide more documentation.

Incomplete paperwork: If you are unable to provide all the required information about yourself, the approval process will be delayed. 

Paying too much for bad credit? Debt consolidation loans might just be the breathing room you’re looking for.

Picture this. You don’t have time to save what you need, but you know you can afford to pay it off later. So you make a big purchase on a credit card. Problem is, now you’re paying much higher interest on that money than if you had taken out a personal loan — and that purchase suddenly got a lot more expensive. Debt consolidation loans can help when you know you can get a better deal on your financing. Let’s see if they’re right for you.

Is it for me?

We’re all about responsible lending. So, to be eligible for a Plenti debt consolidation loan, you must be:

• Aged 21 or over
• An Australian citizen or permanent resident
• Be earning over $25,000 p.a. from a regular source of income
• Have a good credit history

We’ll still consider a debt consolidation loan application if you’re self-employed, but additional credit assessment criteria and requirements may apply.

Unfortunately, we don’t offer debt consolidation loans for Centrelink customers, low-income earners or those with a bad credit rating[SA(1] . There are, however, other places you can go[SA(2] , so have a hunt around for finance that works for you. There are free government debt consolidation programs you can check for advice.

Sign me up
Ready to say goodbye to bad credit? Debt consolidation loans with Plenti are quick and easy.

Head to our RateEstimate tool to get a summary of your loan options and borrowing power. This will include your personalised interest rate and fees for different loan terms. Then just select your preferred loan option and start your online application.

There’s a little paperwork to do. As part of your online application, we need to verify that you’re you, so you’ll need to have your Australian driver’s license handy. If you don’t have a driver’s license, you’ll need to provide us with a copy of your passport and documents verifying your current address.

We’ll also need to verify your income, expenses and liabilities (e.g. credit cards, loans etc.). We can do this online, so we’ll ask you to login to a portal which will allow you to connect to your bank account and share your data with us. You’ll need your bank login details on hand to complete this step.

Finally, you guessed it, we also need the details about the debt you want to consolidate. So you’ll need to share further information and documents regarding the loans or credit cards you are looking to consolidate (e.g. your latest statement) and whether you intend to close these accounts. We’ll let you know if we require anything further from you at this stage.

Finally, we’ll need you to provide us with your bank account so we know where to send the money. This account will be the same account we use to set up your direct debit payment schedule. You’ll also have the flexibility to make extra repayments at any time.

Then we’ll look at your application and assess if a debt consolidation loan is right for you. We’ll look at:

• Your employment stability
• Your income (e.g. salary, rent, interest, etc.)
• Your expenses (e.g. mortgage, groceries, etc.)
• Your repayment history
• Credit bureau information
• Other details you communicate to us

If it all looks good – loan approved.

Legal fee loans exist to help you level the legal playing field.

A relationship breakdown can be a challenging and confusing time to begin with – and worrying about how to pay for legal advice can make it even harder. With a legal fee loan, you can focus on finding the right advice, without worrying about how to pay for it upfront. 

A legal fee loan is a special type of personal loan designed to help you pay for family law matters. It can give you the funds you need to get the right advice from your lawyer and is repaid once a resolution is reached. Unlike a standard personal loan or a credit card, legal fee loans are specially designed to support you through this difficult stage. 

Financing for your unique situation

When it comes to most other personal loans, you have to make choices about your loan type. Will it be secured or unsecured? Do you want a fixed or variable interest rate?

Legal fee loans work differently. They’re specifically designed to allow you to borrow what you need, when you need it. Unlike some other loans, you don’t need to draw down the full amount upfront. And you only need to repay the loan once you’ve received your property settlement. Plus, you only pay interest on what you use. 

It’s a form of asset-based lending, helping you unlock cash tied up in your assets by securing them against your loan. But that doesn’t mean you have to own real estate – other assets, like funds in trust, may be used in some circumstances.

What can I use the funds for?

If you’re wondering more specifically what a legal fee loan is for, the good news is, it isn’t just a loan for legal fees – it’s there to help you cover all of the costs associated with the legal process.

That can include a wide range of associated third-party costs like:

• Your barrister
• Valuers
• Accountants to investigate the total value of the asset pool, complicated structures and asset protection schemes 
• Non-confrontational alternative dispute resolution (ADR) like mediation, arbitration and pre-action procedures

Anything that is connected to the matter can be covered. It can also be used for personal reasons, such as paying for a financial planner or making home improvements prior to putting the property on the market. 

How much can I borrow?

With a legal fee loan, you can borrow between $25,000 and $400,000 – usually up to 30% of the expected property settlement. You won’t face any repayments until the division of your property is complete.

A wedding loan is a sum of money that you borrow from a lender, such as a bank or credit union, over an agreed time period. The loan is paid back in regular weekly, fortnightly or monthly instalments with interest, which may be fixed or variable across the life of the loan.

With a wedding loan you can borrow between $2,000 and $50,000 across 6 months to 7 years. However, there are some lenders that offer up to $100,000 for individual or joint applicants. In addition to a set repayment schedule, some lenders will also allow you to make early repayments. This gives you the flexibility to reduce the time to repay your wedding loan, meaning you save on interest costs.

Low rate wedding loans can be more cost-effective than other types of finance. Each lender will offer different interest rates that you have to pay on the amount you owe.  When comparing against other sources of finance, (e.g. credit card, line of credit, home loan top-up), it’s worth checking carefully for any fees and the amount of time you have to pay back the loan when comparing against other sources of finance (e.g. credit card, line of credit, home loan top-up).

Interest rates and comparison rates can sometimes hide the true cost of a loan. Your monthly and total repayments provide a clear basis for comparing the value of wedding loans from different lenders. 

Each lender will have its own criteria for assessing loan purpose, so it’s important you make sure your purpose is clear before you apply. For example, things like tax bills, court fines or penalties and margin loans are unlikely to be acceptable purposes to lenders for a wedding loan. Neither are borrowing for overseas transfers, gambling, weapons, savings or for anything deemed to be illegal. Rest assured, however, if you have a genuine purpose for the funds and a demonstrated ability to repay you will find a lender to suit your needs.

We want to reward the person who has made the highest growth with Plenti over the promotion period by offering a Plenti prize pack worth $795 including: 

• Plenti trophy 
• $150 worth of merch 
• 5 cases of Plenti beer 

This partner will also win $5,000 to spend on our prize list packed with exciting experiences and gifts that features something for everyone.

We will be choosing this winner based on the individual who has settled the highest number of loans in January 2022 compared to November 2021. 

We will be awarding five prizes to the companies that settle the most loans in New South Wales, Victoria, Queensland, South Australia and Western Australia. Each of the winners in this category will receive a Plenti prize pack worth $795 including:

• Plenti trophy
• $500 worth of merch
• 5 cases of Plenti beer

They will also win $2,000 each to spend on our prize list packed with exciting experiences and gifts that features something for everyone.

A legal fee loan isn’t right for everyone or every situation. Legal fee loans are ideal for those in situations where a clear settlement outcome is expected. In cases where there’s no clear expected outcome, or where clients are simply hoping for a positive outcome, a legal fee loan is generally not approved.

Legal fee loans cannot be used by people involved with disputes concerning only parenting matters. However, if your clients have a property settlement matter as well as a parenting matter, they may still be eligible.

There are a few general requirements your clients must meet in order to qualify:

• They must be involved with a family law matter
• There must be a property settlement component and a clear entitlement to some property division under the Family Law Act
• They must be able to provide some form of security against the loan
• They must be an Australian resident, with the majority of their assets in Australia

Keep in mind, Plenti is not an unsecured lender for family law loans. Our loans are usually secured against a house or property. In some instances, security may be difficult to obtain, as funds might be in a lawyer’s trust account, however, this is generally not an issue. In cases where there is no security available at all, a legal fee loan is unlikely to be approved. Plenti’s dedicated team will always work with your lawyer to explore all options that may be available.

When considering a new car purchase, it’s essential to understand what costs you’ll incur past the actual sticker price. Things like taxes, registration fees, insurance and maintenance can add up quickly. When buying a traditional car, these costs are relatively straightforward.

However, if you’re shopping for an electric vehicle (EV), things are a little more complicated. When it comes to driving an EV, you’d be forgiven if you couldn’t quite decipher whether the government wants to reward you or tax you for going green. Let’s break down the two, somewhat polarising, types of government programs surrounding EVs. 

Electric vehicle incentives:

Put simply, if you drive an EV, you’re polluting less. Every time you drive, you’re reducing the impact you have on your environment. Logically, your contribution deserves a reward. To do this, some state and territory governments have introduced incentives to drive people to buy EVs. These incentives may come in the form of tax reductions, a reduction in stamp duty, or a reduction in registration fees. 

Electric vehicle road tax / usage charges:

On the other hand, governments rely on the taxes people pay at the petrol pump. When you drive an EV, you stop paying tax on petrol altogether. On a large scale, this can create problems for governments who need those tax dollars to build and maintain roads and other driving infrastructure. To combat this, some governments require EV drivers to pay a special EV tax to make up the difference. However, some governments have opted to delay the start of these taxes to help support EV adoption. 

Let’s explore which EV incentives and taxes apply where

Federal policies

There are no specific federal incentives for buying or driving an EV. However, there does exist a small incentive to drive a more fuel-efficient vehicle. The luxury vehicle tax is a 33% tax on vehicles that cost more than $69,152. However, that threshold is increased to $79,659 for “fuel-efficient” vehicles. According to the ATO, a fuel-efficient vehicle is one that does not exceed seven litres of fuel per 100 kilometres. 

Electric vehicles incentives by state

With no significant taxes or incentives on a federal level, the state or territory you live in will have a more direct impact on the savings and costs that come with your EV. 

Australian Capital Territory

With just over 1,000 EVs registered in ACT, there’s plenty of room for the industry to grow. 

ACT grants EV buyers a full stamp duty exemption on new EVs as well as two years of free registration on new or used EVs. ¹

To qualify for the stamp duty exemption, vehicles must be purchased brand new and produce no emissions. Zero-emissions vehicles purchased new or used before 30 June 2024 are eligible to receive two years of free registration. 

Read more about ACT EV incentives here. 

New South Wales

As one of the states with the largest existing EV charging infrastructure, it’s no surprise NSW offers strong incentives. 

NSW grants EV buyers a full stamp duty exemption on the purchase of a brand new EV that costs less than $78,000. It also offers a $3,000 rebate on EV purchases that cost less than $68,750. Altogether, this means EV buyers in NSW can save up to $5,540 over the costs of buying a comparable traditional vehicle.²

Keep in mind, only the first 25,000 EVs purchased in NSW after 1 September, 2021 qualify for the rebate. 

Once EVs make up 30% of the vehicles on the road, (or on 1 July, 2027, whichever comes first) NSW will implement a road user charge – also known as a tax – for EV drivers. The charge will cost drivers 2.5 cents per km, which is expected to amount to around $315 per year. The average petrol or diesel car driver typically pays around $613 per year in fuel excise, so the tax still represents a significant savings over traditional vehicle taxes. 

Read more about the NSW EV strategy here. 

Victoria

In Victoria, EVs come with some important incentives to reward drivers. 

EVs are exempt from paying the ‘luxury vehicle’ rate on stamp duty, but do carry a flat rate stamp duty of $8.40 per $200 of market value. In addition, EVs qualify for a $100 annual discount on registration. In addition, the first 4,000 EV buyers in Victoria can also get a $3,000 subsidy if the vehicle costs less than $68,740.³

Road use charges took effect in Victoria on 1 July, 2021. The charge taxes drivers 2.5 cents per km, which will amount to around $315 each year. 

Read more about the Victorian EV strategy here and learn about the road user charge here. 

Queensland

The Sunshine State’s EV programme is relatively young, but the state has made it a priority to further develop its incentives. 

In Queensland, hybrid and electric vehicles pay a reduced rate on stamp duty: $2 per $100 in value up to $100,000 and $4 per $100 thereafter. This represents a significant savings, as traditional stamp duty is set at $6 per $100.⁴

Read more about Queensland’s zero-emission strategy here. 

Tasmania

Incentives in Tasmania are relatively new, but we expect to see further development of an EV strategy soon. 

In Tasmania, stamp duty is waived on all new and used EVs. This represents an average savings of around $2,000 per vehicle. ⁵

Read more about Tasmania’s EV programme here.

Northern Territory

Incentives for EVs are brand new to the NT, established in July of 2021. With just 38 EVs registered in the territory, the incentives are designed to drive increased uptake. 

Starting in July 2022, EVs will carry no registration costs and a $1,500 reduction in stamp duty.⁶

Read more about the NT’s EV plan here. 

South Australia

At present moment, there are no existing EV incentives in South Australia. 

However, South Australia plans to introduce a road usage charge for EV drivers starting in July 2022. The tax will cost drivers 2.5 cents per km.⁷

Western Australia

The largest state in Australia has fallen behind on EV incentives and infrastructure. 

At present moment, there are no incentives for EVs in Western Australia.⁸

However, the issue has no been ignored by the WA government. Learn more about the state’s strategy here.

¹https://www.environment.act.gov.au/cc/zero-emissions-vehicles 
²https://www.nsw.gov.au/initiative/nsw-governments-electric-vehicle-strategy/ev-rebates 
³https://www.energy.vic.gov.au/renewable-energy/zero-emissions-vehicles
⁴https://www.qld.gov.au/transport/projects/electricvehicles
⁵https://www.dpac.tas.gov.au/divisions/climatechange/Climate_Change_Priorities/reducing_emissions/transport/electric_vehicles_in_tasmania_-_current_state_of_play/current_state_of_play
⁶https://dipl.nt.gov.au/strategies/electric-vehicle
⁷https://www.treasury.sa.gov.au/Growing-South-Australia/incentives-for-electric-vehicles 
⁸https://www.wa.gov.au/service/environment/environment-information-services/electric-vehicle-strategy

If you have just moved to Australia to work or study and don’t have the funds to purchase a personal up front, you might be wondering if a personal loan is a viable option. 

Although most lenders will only loan funds to Australian citizens or permanent residents, there are some who will provide personal loans to people on temporary work visas such as 457.

Visa duration

The challenge that most 457 visa holders face is that their visa duration may only allow them to stay 2 – 3 years in the country. Lenders will assess your ability to repay the personal loan within the period of your visa. Generally, the loan term will end at least three months before the expiration of your visa. Depending on your income and other factors, repaying the personal loan in just 2 or 3 years could make the loan unaffordable. 

Even if you believe your visa will be extended after the initial period, the lender will only take into consideration the current visa status as approved by the Department of Immigration. Lenders won’t take into consideration any visa extensions that are awaiting approval. Similarly, provisional visa holders are unlikely to be approved. 

Will I be approved?

As a temporary resident, you are unlikely to have a significant credit history in Australia. Instead, lenders will consider a range of other factors to assess whether you are a ‘safe’ borrower. 

These factors include: 

• Visa length. Is your visa valid for longer than the duration of the loan applied for?
• Visa type. Lenders may only offer a personal loan to temporary residents holding certain types of visas. You have a better chance of success if your visa is sponsored by an employer.
  
• Visa validity. If you are working multiple jobs, you could be in breach of your visa.
  
• Income and profession. Can you show that you have regular income and a stable employer? Lenders will also take your profession into consideration.
  
• Savings. If you can show that you have saved a deposit, or save money regularly from your income, lenders are more likely to view you as a safe borrower.
  
• Expenses and debts. Lenders will consider your everyday expenses and other debts to determine whether you can afford to make repayments on the personal loan without falling into financial difficulty.
  
• Loan guarantor. If a close relative with a good credit report co-signs your loan, you may have a higher chance of being approved. Your loan guarantor accepts responsibility for the repayments if you default for any reason. Keep in mind, your loan guarantor will need to be an Australian citizen or permanent resident.
  

Special requirements

Depending on your profession and visa status, some lenders may require you to provide a cash deposit to reduce the amount you need to borrow

Can I get a personal loan if I am an international student?

Applying for a personal loan as an international student can be challenging. Not all lenders will offer personal loans to international students and those that do are likely to include restrictions and conditions on the loan. 

It’s a good idea to spend some time researching your options to find out which lenders are willing to offer personal loans to people who hold your specific visa. You can do this by speaking with a loan specialist who is experienced in finding personal loans for people in a wide range of situations. 

A legal loan is a type of personal loan. While the pieces are the same, a legal loan works a little differently from what you might expect from a standard personal loan. Let’s look at the elements that make up a legal loan: 

Interest rate

Borrowing money helps people access the financial support they need, but it does come at a cost. Like most loans, legal loans need to be paid back with interest. The amount of interest paid on top of the amount borrowed is a percentage of the amount owed. It’s usually measured as an annual rate and is called the Annual Percentage Rate (APR) or Advertised Rate.

And remember, the lowest interest rate doesn’t always mean the best loan for your clients. Be sure to consider the total cost of the loan including interest, fees and other costs to get a complete picture.

Repayments

This is where most personal loans and legal loans differ. With a standard personal loan, once your clients receive their loan, they need to start paying it back through regularly scheduled repayments, either weekly, fortnightly or monthly.

A legal loan is different. It’s secured against your client's forthcoming property settlement and it’s not expected that they will have the cash to start repaying the loan until they receive this settlement. So, rather than repay the loan in instalments, they'll repay it as a lump sum out of their share of the property settlement once it’s finalised.

Your clients also only access the money when they need it. So if they don’t draw down their entire loan amount, they'll only pay interest on the amount they actually accessed.

Loan amount

The loan amount is the amount of money your clients borrow, plus any fees and charges capitalised into the loan amount. It’s this amount that they'll pay interest on. However, with a legal loan, they only draw down the money as they need it. So they only pay interest on the amount they access.

In Australia, legal loans usually range from $25,000-$400,000.

Loan term

When your clients take out a standard personal loan, they agree to the length of time it will take them to repay the loan. For personal loans, where they also commit to making regular repayments, lenders usually offer loan terms between 1 and 7 years.

With a legal loan, however, your clients are only expected to repay the loan once their property settles. So the loan term for legal loans allows for this process to happen – typically up to 2 years. If their property doesn’t settle within the 2-year loan term, an extension may be available.

Upfront fees

Most loans also come with an upfront cost to set up the loan. Known as upfront, establishment or application fees, they can include:

• A flat fee (e.g. $499) that applies regardless of the value of the loan
• A tiered fee (e.g. $250, $500, $750) based on the value of the loan
• A percentage fee (e.g. 3%) based on the total amount borrowed and the credit or risk profile of the customer
• A hybrid fee (e.g. $200 + 2% of the loan amount)

It’s up to the lender what fees they choose to charge. But keep in mind, these upfront fees aren’t actually paid upfront – they’re usually capitalised to the loan balance, meaning they are paid back with the remainder of the loan. This increases the total loan amount, meaning your clients will be paying interest on those fees as well for the life of their loan. If it’s a small upfront fee, it might not make much of a difference. But if the fees are significant, they can add thousands to the total cost of the loan.

Monthly or ongoing fees

Most loans also come with a monthly cost. Also called ongoing, account-keeping or loan management fees. These fees don’t go towards paying back the loan. In general, the lower the fees, the better. But as always, the total cost of the loan should be considered including all interest payable and other charges.

With a legal loan, your clients will still be charged a monthly fee, but it will also be capitalised into the loan, so they pay it at settlement.

Penalty fees

Missed payment or ‘default’ fees are the most common penalty fee for personal loans. They’re a more relevant risk when your clients are repaying their loan monthly because one late payment can result in a fee. Late fees can vary from $10 to as much as $35 per default.

With a legal loan, your clients are not required to make monthly repayments, so they're at less risk of defaulting. If their settlement hasn’t come through by the end of your loan term, an extension might be possible.

How much does it cost?

To work out the overall cost of legal fee loans, your clients need to factor in:

1. Loan Interest Rates: The biggest factor in how much a legal loan will cost is the rate of interest your clients will pay on the amount borrowed. Legal loans can come with variable or fixed interest rates. If your clients are opting for a variable-rate loan, it is best to also calculate a worst-case scenario, one where a loan’s interest rates rise significantly in the future to be sure your clients have a comfortable buffer in the event things change. At Plenti, our legal loan interest rates are always variable. Interest is only paid on the amount outstanding, once a settlement is reached.   

2. Upfront Fees: ‘Establishment’ or application fees for all loans can vary greatly, so it’s an area where shopping around can make a difference. 

At Plenti, we have one upfront fee on our family law loans. The credit assistance fee is 4% on the amount of credit sought. This is a one-off fee capitalised to the loan at the time of the initial drawdown. This means your clients won’t actually pay the fee upfront, rather, it will be added to their repayments at the time of settlement. 

3. Ongoing Fees: These fees are charged throughout the life of the loan. Common ongoing fees include: 

• Monthly or annual fees (also called account keeping fees)
• Default, dishonour or missed payment fees
• Hidden fees in the terms and conditions of a loan 

At Plenti we never add hidden fees. We charge two types of ongoing fees for legal loans: 

• An $80 monthly fee
• A risk assurance charge, which is 5% on every dollar drawn down on the loan
• Some loans also require a security fee, if caveats are required for the security of the loan, these fees are $980 for caveats and $1300 for mortgages

Each of these fees is capitalised to the loan, so your clients only pay them once they begin making repayments.

To find the true cost of a loan, you can combine the costs of these fees with the interest rate of the loan. As long as you are comparing the same loan terms and amount, a comparison rate helps you to compare the cost of different loans. 

At Plenti, typical borrowers incur effective costs of about 11% p.a. 

Now that you understand the building blocks of a legal loan, you’ll be better able to decide which loan is suitable for your clients. Planning and considering their situation upfront will help when comparing what loan products are available that might really fit your clients needs, and offer the best value.

Life moves fast. Whether you’re commuting to work each day, juggling family commitments or just trying to get from A to B, there’s no doubt that having a car makes life easier. The good news is you could be hitting the road sooner than you think. 

These days, the process of applying for a car loan is quick and hassle-free. With most of the application handled online, it’s possible to complete your application and be approved for a car loan within 48 hours.

Make a move

It’s worth taking a minute to request a RateEstimate to find out if you’re eligible to apply for a loan with Plenti. It will also provide you with an estimate of the fees, charges and interest rate that may apply to your loan. 

If you’re happy with your rate estimate, we’ll typically finalise successful loans within a day or two of receiving your complete application. It’s that simple! 

Remember, requesting a free RateEstimate only takes 1 minute. It won’t impact your credit score and there’s absolutely no obligation for you to proceed with a loan application. 

To be eligible for a Plenti car loan you must:

• Be aged 21 or over
• Be an Australian citizen or permanent resident
  
• Be earning over $25,000 per year from a regular source of income that you can demonstrate
  
• Have a good credit history

Plenti will consider a loan application if you are self-employed. Additional credit assessment criteria and requirements may apply.

Make the first move and you could be hitting the road sooner than you think. 

Necessary paperwork

Lenders will ask for a range of documents to prove your identity and financial situation so that they can assess whether you will be a trustworthy borrower. Basically, they want to know that you have the ability to repay the car loan without falling into financial difficulty. 

It’s a good idea to prepare your paperwork ahead of time to speed up the process. Here is an overview of the type of documents you may need to provide when you apply for your car loan:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill that confirms your address.
  
• Proof of income, such as recent payslips, a tax return, a group certificate or current bank statements. Lenders may also ask for a letter from your employer stating your employment details.
  
• Proof of savings, such as bank statements or investment documents that show you have the ability to regularly save money from your income.
  
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.
  
• Proof of comprehensive car insurance to show you’re covered in case you are hit with a damages claim in the future.
  
• Contact details for people who can authenticate these details, such as your employer, landlord or accountant.
  

Details about your car 

Lenders may ask for details about the car you wish to buy so they can understand how much it will cost and how much you’ll need to borrow. You could be asked to provide documents such as:

• An invoice from the dealership or a contract of sale
• Vehicle chassis number
  
• The year, make and model of the car
  
• Registration details
  
• Details on the fuel efficiency of the car
  
• Confirmation of comprehensive car insurance
  

Number crunch! 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Next, figure out how much you can contribute as a deposit, should you be approved for a car loan. 

Once you have a particular car loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees
  

Experiencing delays?

There are a few things that could stand in the way of a speedy car loan approval process.:

A poor credit score: If you have a poor credit score or no credit history, you may find it more difficult to be approved for a car loan. 

Limited deposit: If you have no deposit saved to contribute to the cost of the car, or your deposit is too small, it may slow down the approval process and you may be required to provide more documentation.

Incomplete paperwork: If you are unable to provide all the required information about yourself and the car, the approval process will be delayed.  

Before you can taste freedom behind the wheels of your new car, you’ll need to provide some documents to back up the information in your car loan application. 

Lenders ask for these documents to prove your identity and financial situation so that they can assess whether you will be a trustworthy borrower. Basically, they want to know that you have the ability to repay the car loan without falling into financial difficulty. 

Follow our guide for an overview of the type of documents you may need to provide when you apply for your car loan:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill that confirms your address.
  
• Proof of income, such as recent payslips, a tax return, a group certificate or current bank statements. Lenders may also ask for a letter from your employer stating your employment details.
  
• Proof of savings, such as bank statements or investment documents that show you have the ability to regularly save money from your income.
  
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.
  
• Proof of comprehensive car insurance to show you’re covered in case you are hit with a damages claim in the future.
  
• Contact details for people who can authenticate these details, such as your employer, landlord or accountant.

Details about your car 

Lenders may ask for the details of the car you wish to buy so they can understand how much it will cost and how much you’ll need to borrow. You could be asked to provide documents such as:

• An invoice from the dealership or a contract of sale
• Vehicle chassis number
  
• The year, make and model of the car
  
• Registration details
  
• Details on the fuel efficiency of the car
  
• Confirmation of comprehensive car insurance
  
• Vehicle chassis number
  

These days, the process of applying for a car loan is quick and hassle-free. With most of the application handled online, it’s possible to complete your application and be approved for a car loan within just a few days. 

There’s no doubt about it. Juggling studies, work and the responsibilities of life can be tough without a car to keep you moving. For many students who can’t afford to purchase a car up front, a car loan is a great solution. 

The good news is that online lenders, banks, credit unions and car dealers all have loans available to students. 

Tick the box

To qualify for a student car loan, you must meet the following requirements:

Age: You need to be over 18 to apply for a student car loan. Some lenders will limit your loan amount if you are aged between 18 – 21 but this depends on your income and credit score. 

Residency: Most lenders will only offer car loans to student applicants that are citizens of Australia or Permanent Residents. However, some lenders will accept temporary visa holders. 

Income: As a student, you don’t need to have a very high income to qualify for a car loan. But you’ll need to show that you have stable casual or part-time work bringing in a regular income. Keep in mind, many lenders do not accept Newstart, Austudy or Youth Allowance as sources of income. 

Before you start

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Once you have a particular car loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees
  
• The repayment period
  

Know the score 

When you apply for a car loan, you can expect the lender to check your credit history, current debt and income so they feel confident you can repay the loan. 

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you are a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you buy. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency. 

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
  
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

You can also obtain your credit report through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Guaranteed security

Having a family member or friend with good financial status and credit history act as a guarantor application could improve your chances of being approved for a student car loan. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Before you take this step, make sure you can afford the monthly repayments in addition to your other bills. Are you sure your income and expenses will remain the same throughout the whole term of the loan? If your circumstances change, could you still afford this additional debt?

Peer-to-peer lending

When you’re researching student car loans, it pays to look beyond the ‘Big Four’ banks. Online lending platforms, also known as peer-to-peer lenders, often provide a faster approval process and lower interest rates than traditional lenders. 

This type of lender, also known as ‘peer-to-peer’ lending or marketplace lending, allows you to seek a loan from a private lender. All P2P lenders set their own loan requirements and terms. 

It’s a good idea to check the comparison rates of various lenders to make sure you find the best loan to suit your needs. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily, including loans offered by P2P lenders. 

Car dealer finance

Many car dealerships offer their own loans when you buy directly from their car yard. This type of finance is usually very swift to arrange and may include a tempting up-front saving, such as zero interest for the first few months. But make sure you read the fine print. Car dealer finance may come with hidden fees and charges, such as up-front and monthly administration fees, and/or a ‘balloon’ payment. A balloon payment is a large sum paid at the end of your loan in order for you to own the car. 

It’s a good idea to calculate whether the total repayments on the loan will end up being higher with the extra fees and balloon payment before committing. 

Banks and credit unions 

Some banks and credit unions offer car loans specifically for students, while others will simply offer their regular car loan products. 

A traditional car loan from a bank or credit union can be secured or unsecured. 

Secured car loan: This type of loan is usually secured by the car. This means if you can’t make repayments, the lender can take the car and sell it to recover the cost of the loan. Some lenders will approve a new car loan for cars that are 2 or 3 years old. The higher the value of the car, the lower the interest rate may be on this type of car loan. 

Unsecured car loan: An unsecured car loan usually has a higher interest rate than a new car loan or secured car loan. This is because an unsecured car loan does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. The lender assesses your credit score and income to approve the loan.

Fixed or variable interest rate?

When you apply for a car loan, you have the option to choose between a fixed or variable interest rate. 

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation. 

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan. 

Pros

• You know exactly how much your repayments are each month.
• You can plan and budget with certainty, knowing your repayments won’t change.
  
• You can plYou’re protected from future interest rate rises.an and budget with certainty, knowing your repayments won’t change.
  

Cons

• If the market interest rate falls, you pay more interest with a fixed rate.
• Some lenders may insist upon a shorter lending period.
  
• Fixed rate personal loans may not have a redraw facility.
  
• If you want to pay back your car loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early.
  

Variable Interest Rate

A variable rate rises and falls with the market interest rate as it responds to current economic conditions. This means you could end up paying more or less for your car loan, depending on the market rate.  

Pros

• If the market rate drops, you could pay less for your car loan overall.
• Most lenders offer longer repayment terms with a variable interest rate.
  
• You may have the option to make additional repayments which could save you money over the life of your car loan.
  
• You may be able to redraw from any additional repayments you have made if you need some extra cash along the way.
  

Cons

• If the market rate rises your repayments increase.
• Interest rate rises are unpredictable and could make it harder to budget and make plans for the future.
  

Choosing between a fixed or variable interest rate is an important decision that could have a big financial impact down the track. Some people prefer the predictability of a fixed rate personal loan, while others prefer the flexibility of a variable rate. 

Things to consider

When calculating how much you can afford to borrow, don’t forget to factor in the cost of actually running and maintaining your car, including stamp duty, registration, car insurance, petrol, regular services and road tolls. 

You know exactly how much your repayments are each month.

You can plan and budget with certainty, knowing your repayments won’t change.

You’re protected from future interest rate rises.

You sure can! Many lenders are willing to offer car loans to low-income earners. You might just need to look beyond the big four banks. 

At Plenti, we understand that many low-income earners are looking for an inexpensive car for travel to and from work and to manage family needs. There are many car loan packages available to get you on the road without breaking the budget. 

How will I be assessed?

When you apply for a car loan, the lender will review the following details to make a decision about how much they’re willing to lend you and the rate of interest:

• Bank statements
• Employment status
  
• Credit report
  

Let’s look at each of these in detail.

Bank statements 

When you apply for a car loan as a low-income earner, you may need to provide bank statements to show your spending habits, savings and regular expenses. If you can show that you pay credit card debts regularly and use your money responsibly, the lender is more likely to view you as a trustworthy borrower. 

But don’t panic if you’ve overdrawn on your accounts in the past. Small, occasional lapses won’t impact your chances of being approved for a car loan. 

Does your spouse or partner contribute to your daily expenses? If so, this will help your chances of being approved for a car loan and may increase the amount you can borrow. You’ll need to provide evidence of your partner’s income through bank statements or pay slips. Alternatively, you could choose to make your partner a joint borrower. This means your incomes will be combined, giving you greater borrowing power.

But remember, you’ll both be equally responsible for repaying the loan. If one of you cannot contribute to repayments down the track, the other will need to take responsibility for making full repayments.  

Employment status

If you’re a low-income earner applying for a car loan, chances are you work as a casual, part-time, or are self-employed. No two loans are the same and each lender has different requirements for employment. Many lenders will ask you to show pay slips or a letter from your employer to prove you’ve been working full time, casually or part-time for a number of months. If you’re a contractor, sole trader or freelancer, you’ll probably be asked to show evidence of income for the past 6 months to 1 year. 

To be eligible for a Plenti car loan, you must earn over $25,000 per year from a provable, regular source of income.

Keep in mind, many lenders will include government benefits as an income. This means everything from Carers Benefit, Family Tax Benefits, Aged Pension, Disability Support Pension and Partnered Parenting Payment could be considered part of your regular income. Check with your lender when you apply for the car loan to find out if government benefits will be accepted. 

Credit Report 

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you are a trustworthy borrower. 

If you have a low credit score, it could hurt your chances of being approved for a car loan, so it may be worth working on improving your score before you apply. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

Check out this credit score table from Equifax so you know where you stand:

• Excellent: 833 – 1,200
• Very good: 726 – 832
  
• Good: 622 – 725
  
• Average: 510 – 621
  
• Below average to average: 0 – 509
  

If your credit score is over 600, chances are you will be able to secure a car loan interest rate between 5% - 10% per annum. Scores below 510 are likely to attract a higher rate. 

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency. 

Comprehensive credit reporting

Around 50 major Australian lenders, including Plenti, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. It means you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

There’s no doubt about it, having your own set of wheels makes life easier. Perhaps you’re working as a casual while juggling studies or a family. We get it. Even though you might need to provide extra reassurance that you can make repayments as a casual worker, there’s still a good chance you will be eligible for a car loan. 

Before you apply for a car loan, ask yourself these questions:

• Can you prove you’ve been consistently employed for a considerable amount of time? You may need to show pay slips and a letter from your employer.
• Does your income exceed the minimum income criteria? To be eligible for a Plenti car loan, you must earn over $25,000 per year from a provable, regular source of income.
  
• Can you show proof of savings? If lenders can see that you’re capable of setting aside money for loan repayments, they’re more likely to view you as a trustworthy borrower.
  

Improve your chances

If you work as a casual, lenders will look at your credit score, employment history, income, expenses and other debts to determine whether you have the ability to make repayments. Check out these 3 things you can do to improve your chances of qualifying for a car loan:

• Select a less expensive car so you can borrow a smaller amount
• Save for a deposit so you can borrow a smaller amount
  
• Check and improve your credit score
  

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you’re a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you apply for a car loan. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

Don’t lose heart

If you are not approved for a car loan, there are other options available. You could apply for a secured personal loan, instead of a car loan. With a secured personal loan, the lender uses the car that you purchase as security against the loan. This means if you can’t make repayments down the track, the lender can repossess the car to cover the costs of the loan. 

Alternatively, you could apply for a guarantor personal loan, where you have a family member or friend co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Having a guarantor on your personal loan might improve your chances of being approve because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might also be able to secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

Turning 18 is a major life milestone, just like buying your first car. Unless you’re lucky enough to have parents willing to bank-roll your wheels, chances are you’ll need to apply for a car loan.

But you’ll need to tick some boxes first and being aged 18 or over is one of them. Australian lenders require you to be an Australian citizen or permanent resident, have a job or regular source of income and be over the age of 18 before you apply for a car loan.  

Some lenders might have extra lending criteria, and most won’t lend money if you’re an international student or if your only source of income is Austudy, Youth Allowance or Newstart. 

No credit history? No problem! 

If this is your first car loan, chances are you don’t have any personal finance history yet, also known as ‘credit history’, which means you won’t have a credit score. Without a credit score, lenders tend to view you as a ‘risky’ borrower because there’s no report card available that evaluates how well (or badly) you’ve handled your debts and repayments in the past. 

Applying for a car loan without a credit score can be a little tricky, but don’t lose heart. Follow this guide and you’ll soon be on the road to buying your very own sweet ride.

Will I be approved?

If you can show that you have the means to make regular repayments on your car loan without going into financial difficulty, you’ll have a better chance of being approved for a car loan. Here are 5 ways to prove you’re a trustworthy borrower:

1. Have a secure job with a regular income (it doesn’t need to be full-time).
2. Make sure your income is high enough to easily meet the repayments for the loan you want.
   
3. Show that you save money from your income each month.
   
4. Make sure there’s no history of late payments on your bills (this includes Afterpay).
   
5. Save for a deposit in a high-interest savings account.
   

All of these things will help improve your chances of having your car loan approved. 

Proof of life 

Before agreeing to loan you the funds for your dream car (and by ‘dream’ we mean ‘budget’), the lender will want to be sure you have a stable home and job. Basically, they want to know you’re not a flight risk. Makes sense, right? 

Make sure you gather together the paperwork you need to show the following:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill, etc.
  
• Proof of income, such as recent payslips, current bank statements and a letter from your employer stating your employment details.
  
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.
  
• Contact details for people who can authenticate these details, such as your employer, landlord or accountant.
  
• Assets, including property or other vehicles that you own.
  

Number crunch! 

Next, take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Once you have a particular car loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period

Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees

Guaranteed security

Having a family member or friend with good financial status and credit history act as a guarantor application could improve your chances of being approved for a car loan if you have no credit score yourself. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Peer-to-peer lending

When you’re researching student car loans, it pays to look beyond the ‘Big Four’ banks. Online lending platforms, also known as peer-to-peer lenders, often provide a faster approval process and lower interest rates than traditional lenders. 

This type of lender, also known as ‘peer-to-peer’ lending or marketplace lending, allows you to seek a loan from a private lender. All P2P lenders set their own loan requirements and terms. 

It’s a good idea to check the comparison rates of various lenders to make sure you find the best loan to suit your needs. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily, including loans offered by P2P lenders. 

Car dealer finance

Many car dealerships offer their own loans when you buy directly from their car yard. This type of finance is usually very swift to arrange and may include a tempting up-front offer, such as zero interest for the first few months. 

But beware the fine print! Car dealer finance may come with hidden fees and charges, such as up-front and monthly administration fees, and/or a ‘balloon’ payment. A balloon payment is a large sum paid at the end of your loan in order for you to own the car. 

It’s a good idea to calculate whether the total repayments on the loan will end up being higher with the extra fees and balloon payment before committing. 

Banks and credit unions 

Some banks and credit unions offer car loans specifically for students, while others will simply offer their regular car loan products. You probably have a long history with your bank through your savings accounts, which might help if you have no credit history. 

A traditional car loan from a bank or credit union can be secured or unsecured. 

Secured car loan: This type of loan is usually secured by the car. This means if you can’t make repayments, the lender can take the car and sell it to recover the cost of the loan. Some lenders will approve a new car loan for cars that are 2 or 3 years old. The higher the value of the car, the lower the interest rate may be on this type of car loan. 

Unsecured car loan: An unsecured car loan usually has a higher interest rate than a new car loan or secured car loan. This is because an unsecured car loan does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. The lender assesses your credit score and income to approve the loan.

Fixed or variable interest rate?

When you apply for a car loan, you have the option to choose between a fixed or variable interest rate. 

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation. 

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan. 

Pros

• You know exactly how much your repayments are each month.
• You can plan and budget with certainty, knowing your repayments won’t change.
  
• You can plan and budget with certainty, knowing your repayments won’t change.
  
• You’re protected from future interest rate rises.
  

Cons

• If the market interest rate falls, you pay more interest with a fixed rate.
• Some lenders may insist upon a shorter lending period.
  
• Fixed rate personal loans may not have a redraw facility.

If you want to pay back your car loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early.

Variable Interest Rate

A variable rate rises and falls with the market interest rate as it responds to current economic conditions. This means you could end up paying more or less for your car loan, depending on the market rate.  

Pros

• If the market rate drops, you could pay less for your car loan overall.
• Most lenders offer longer repayment terms with a variable interest rate.
  
• You may have the option to make additional repayments which could save you money over the life of your car loan.
  
• You may be able to redraw from any additional repayments you have made if you need some extra cash along the way.

Cons

• If the market rate rises your repayments increase.
• Interest rate rises are unpredictable and could make it harder to budget and make plans for the future.
  

Choosing between a fixed or variable interest rate is an important decision that could have a big financial impact down the track. Some people prefer the predictability of a fixed rate personal loan, while others prefer the flexibility of a variable rate. 

Things to consider

When calculating how much you can afford to borrow, don’t forget to factor in the cost of actually running and maintaining your car, including stamp duty, registration, car insurance, petrol, regular services and road tolls. 

Build your credit history

There’s no doubt about it, having a positive credit report makes it much easier to get approved for a car loan. The good news is it’s easy to build your credit history and you don’t need to take out a credit card to do it. Simply by paying your bills on time, such as mobile phone and electricity, you will start to build a positive financial report. Think about setting up direct debit payments for these bills so that you always pay on time. 

When you apply for a car loan, you have the option to choose between a fixed or variable interest rate.

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation.

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan.

Pros

·       You know exactly how much your repayments are each month.

·       You can plan and budget with certainty, knowing your repayments won’t change.

·       You’re protected from future interest rate rises.

Cons

·   If the market interest rate falls, you pay more interest with a fixed rate.

·       Some lenders may insist upon a shorter lending period.

·       Fixed rate personal loans may not have a redraw facility.

·       If you want to pay back your loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early.

Variable Interest Rate

A variable rate rises and falls with the market interest rate as it responds to current economic conditions. This means you could end up paying more or less for your loan, depending on the market rate. 

Pros

·       If the market rate drops, you could pay less for your loan overall.

·       Most lenders offer longer repayment terms with a variable interest rate.

·       You may have the option to make additional repayments which could save you money over the life of your loan.

·       You may be able to redraw from any additional repayments you have made if you need some extra cash along the way.

Cons

·   If the market rate rises your repayments increase.

·   Interest rate rises are unpredictable and could make it harder to budget and make plans for the future.

Choosing between a fixed or variable interest rate is an important decision that could have a big financial impact down the track. Some people prefer the predictability of a fixed rate car loan, while others prefer the flexibility of a variable rate.

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily. Once you’ve decided on the best car loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit.

To put it simply, an interest rate is the amount of interest that you will pay on your car loan each year. The interest rate on your car loan varies between lenders and depends on things like your credit score, income and whether the loan is secured or unsecured.

How can I find the lowest interest rate?

The interest rate on your car loan might end up being different to the advertised rate. Sound confusing? The reason for this is because your lender will assess your personal circumstances, including your credit history, other debts and savings. If you have a low credit score or your income is unstable, you might only qualify for loans with high interest rates.

It’s a good idea to check the comparison rates on a wide range of loans to make sure you find the best deal. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. This means the comparison rate will be higher than the interest rate charged on the loan. In Australia, lenders are required to show a comparison rate when they advertise an interest rate. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare personal loans quickly and easily by providing the comparison rates.

Keep in mind, comparison sites could be influenced by advertising. It’s always worth checking a variety of sources to see a broad range of options and compare the ratings and rankings. And remember, comparison rates don’t include early repayment fees, late repayment fees or deferred establishment fees.

Once you’ve made a short list of the best loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail. Finally, contact the loan provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit.

Are interest rates fixed or variable?

Have a think about whether you prefer a variable interest rate, rather than a fixed rate. A variable rate could fluctuate throughout the life of the loan, which means your repayments may increase or decrease from time to time.

On the other hand, a fixed interest rate provides a sense of certainty. You’ll know exactly how much will come out of your bank account each month and you’re protected from the possibility of future interest rate rises.

A loan with a variable interest rate usually has no early exit fee. This means you won’t be penalised if you pay back the loan early. Consider the full picture when deciding which option works best for you.

Can I qualify for a low interest rate?

The interest rate that you receive will be influenced by many factors, including your income, expenses and credit score. 

You can find out your credit score for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar. Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time.

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! If your credit score is low, there may be steps you can take to polish it up.

Having a guarantor on your car loan might improve your chances of securing a lower interest rate. This means a friend or family member co-signs the loan and agrees to accept responsibility for the repayments if you default for any reason. A guarantor car loan may come with a lower interest rate because your guarantor acts as a type of security, making it less risky for your provider to loan you the funds.

If you’re itching to get behind the wheel of your dream car, or you just need something to get you from A to B, a car loan can get you there faster.

The cheapest car loan is bound to be the one with the lowest interest rate, right? Well, not necessarily.

Up-front fees, ongoing service charges and other hidden costs can make your car loan more expensive than you bargained for. It’s also important to consider the features of your car loan. A loan with slightly higher interest rate might allow you to make extra repayments and pay off the loan early, reducing the cost of your loan overall.

Here are some of the extra charges that could apply to your car loan:

• Establishment/upfront fee: You could be charged a fee when you apply for a car loan to cover the cost of assessing your application and preparing loan documents.
• Service fee: Monthly account keeping fees add up over time. It’s worth calculating the total cost for the life of the loan so you’re not caught by surprise.
  
• Late payment fee: Your lender may charge a fee if you default on your loan or miss a payment.
  
• Early repayment fee: Do you hope to pay your car loan off sooner? Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.
  
• Other fees: Check out the terms and conditions of your car loan for a full list of fees and charges.
  

Ever heard of a balloon payment? They’re not as much fun as they sound. Rather than paying off your car with party balloons, some lenders will require an inflated payment at the end of your loan, in order for you to own the car. These car loans might have a low interest rate, but it’s a good idea to calculate whether the total repayments on the loan will end up being higher with the balloon payment before committing.

It’s worth taking the time to understand how car loans work. Finding the right loan for your personal circumstances will help you enjoy your new wheels even more.

Take your pick

A car loan is a type of personal loan used for buying a motor vehicle. Whether you’re after a ute for work, a 4WD, motorbike, or a family car, a car loan can be a great way to hit the road when you don’t have enough savings to buy it outright.

When you take out a car loan, your lender usually pays the car vendor on your behalf. And then it’s your responsibility make monthly repayments to the lender over a period of years.

Car loans usually range from $5,000 to $100,000 with loan terms from one to 10 years. Interest rates can be as low as 2.99% up to 10% for secured loans, and up to 15% for unsecured loans.

The amount you can borrow depends on your financial situation, including your income, expenses and other debts. Lenders will also check out your credit history to assess whether you’re a trustworthy borrower. 

It’s helpful to research your options when deciding which type of car loan is right for you:

• New car loan: Used to buy cars that are brand new, this type of loan is usually secured by the car. This means if you can’t make repayments, the lender can take the car and sell it to recover the cost of the loan. Some lenders will approve a new car loan for cars that are 2 or 3 years old. The higher the value of the car, the lower the interest rate may be on this type of car loan.
• Used car loan: Ideal for buying cars that are up to 6 years old, a used car loan is usually secured by the value of the car.
  
• Unsecured car loan: Available for buying cars older than 5 or 6 years old, an unsecured car loan usually has a higher interest rate than a new car loan or secured car loan. This is because an unsecured car loan does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. The lender assesses your credit score to approve the loan.
  

Fixed or variable interest rate?

When you apply for a car loan, you have the option to choose between a fixed or variable interest rate.

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation.

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan.

Pros

• ·You know exactly how much your repayments are each month.
• You can plan and budget with certainty, knowing your repayments won’t change.
  
• You’re protected from future interest rate rises.
  

The reality is that cars are a basic necessity for most of us. If you are unable to save enough to purchase one, a car loan can help bridge the gap in your budget and get you on the road.

In Australia, around 50 lenders, including all major banks, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. If you have the ability to take out a car loan, you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

Plenti uses comprehensive credit reporting AND risk-based pricing to determine the right interest rate for your loan. Rather than focusing on any black marks from the past, we understand your full credit history, including good financial behaviour, such as making loan repayments on time. This means we can offer you a personalised interest rate that matches your true credit history and suits your current circumstances. 

What is risk-based pricing?

Plenti uses risk-based pricing to set the overall cost of your loan. This is good news for you! Risk-based pricing assesses multiple factors, including your full credit history, income and debts, to determine an appropriate interest rate for you.

This means if you’re a trustworthy borrower with a positive history of making repayments on time and sticking to your loan terms, you will be rewarded with a lower, more personalised interest rate. 

The reverse is also true. Risk-based pricing means that borrowers who have a poor credit history, other debts, and/or an unstable income will be charged higher rates of interest. This is because the lender views them as being less likely to repay their loans in full and on time. 

How is it calculated?

When applying risk-based pricing, your lender will look at a many factors to make sure they have a clear picture of your financial behaviour and habits, including things like your: 

• Credit score
• Employment status
  
• Income and expenses
  
• Assets
  
• Collateral
  
• Presence of a guarantor
  
• A steady residential address
  

Comprehensive Credit Reporting (CCR) allows for more accurate risk-based pricing. Consider applying with a lender who participates in CCR and you will be rewarded for your positive financial habits, like making repayments on time. 

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Life happens. Sometimes unexpected emergencies arise that put us in a tricky financial situation. Or perhaps you’re still tainted by a credit debt from years ago. No matter how you got there, it’s worth understanding how a low credit score can affect your personal loan application. 

Your credit score has a huge say in whether you’ll be approved for a car loan and how much you’ll be able to borrow. It also impacts the interest rate you’ll be offered and other loan features. 

Your credit score is a number that sums up the information on your credit report. Your credit score tells the lender whether or not you are a trustworthy borrower and whether loaning you money is worth the risk. 

In a nutshell, your credit score helps lenders decide whether you’ll be approved for a personal loan, how much money they’re willing to lend you and what interest rate you qualify for. 

Comprehensive credit reporting

Around 50 major Australian lenders, including Plenti, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. If you have the ability to take out a car loan, you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

What is a good credit score?

Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

Check out this credit score table from Equifax so you know where you stand:

• Excellent: 833 – 1,200
• Very good: 726 – 832
  
• Good: 622 – 725
  
• Average: 510 – 621
  
• Below average to average: 0 – 509
  

If your credit score is over 600, chances are you will be able to secure a car loan interest rate between 5% - 10% per annum. Scores below 510 are likely to attract a higher rate. 

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency. 

Knowledge is power!

They say knowledge is power. And in this case, knowledge is your pathway to financial freedom. 

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

You can also obtain your credit report through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Give it a polish!

It makes sense to work on your credit health consistently so that you can apply for personal loans with confidence. 

There are ways to clean up your credit report and increase your credit score to improve your chances of being approved:

• Pay your rent, mortgage and utility bills on time
• Make credit card repayments on time and try to pay more than the minimum repayment
  
• Lower your credit card limit
  
• Limit how many applications you make for credit
  
• All of these things will help your credit score to improve over time. 
  

An upfront fee is a common fee charged by lenders when you apply for a loan. It might also be called an ‘application’ fee or ‘establishment’ fee. 

An upfront fee covers the costs of processing your application, including things like administrative costs, credit assessment, loan set-up and document preparation. 

The best plan is to take the upfront fee into account when calculating the full cost of your loan over its lifetime.

How is it charged?

This fee can be charged in several ways:

A flat fee is a standard amount that doesn’t change, no matter how much you’re borrowing. 

A tiered fee is based on the total amount borrowed. For example, it could be $250, $500 or $750, depending on the size of the loan. 

A percentage fee is based on the total amount borrowed and your credit profile. For example, it could be 4% of the loan amount. 

A hybrid fee is a combination of a flat fee and a percentage fee. For example, $200 + 2% of the loan value.

Your upfront fee is usually added to the amount you wish to borrow, rather than paid up front. This means if you’re borrowing $10,000 with an upfront fee of $300, your total loan amount will be $10,300. 

Why is this important?

By adding the upfront fee to the total loan amount, it means you pay interest on a higher amount. For example, if you borrow $30,000 with an upfront fee of 4%, your total loan amount is $31,200. This means you’ll pay interest on the full $31,200 balance. You’d be surprised at how this adds up over the course of the loan!

Let’s do the maths

When you’re comparing lenders, make sure you check the upfront fee. Some lenders who charge lower interest make up for it with a high percentage upfront fee. This means you could end up paying more overall. 

Some lenders don’t charge an upfront fee but it’s important to look at the full picture. They may instead charge higher interest rates or monthly servicing fees.

In Australia, lenders are required to show a comparison rate when they advertise an interest rate. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and monthly fee into one percentage figure.

It’s a good idea to check the comparison rate to better understand the loan’s true cost and then compare them to identify the best lender. 

Let’s talk about monthly fees, also known as ongoing fees, loan management fees or administration fees. 

A monthly fee on your personal loan covers the cost of maintaining your loan and is charged on a regular basis. This monthly fee amount does not go towards repaying your loan principal.

Let’s do the maths

Even a small monthly fee of $10 adds up to $600 over 5 years, so it pays to consider all charges when comparing lenders. 

Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and monthly fee into one percentage figure. In Australia, lenders are required to show a comparison rate when they advertise an interest rate.

It’s a good idea to check the comparison rate to better understand the loan’s true cost and then compare them to identify the best lender.

Paying off your personal loan early is a commendable goal. The sooner you’re out of debt, the better, right?

Well, maybe.

Some lenders will sting you with an early repayment fee if you manage to pay your personal loan off ahead of schedule. Early repayment fees can range from $0 -$800.

The whole story.

It might seem rough that you’re charged for your financial diligence, but there is a method in the madness. Early repayment fees are designed to cover the lender’s loss incurred if you end your loan early.

To fully understand why these fees are sometimes imposed, it helps to know the backstory of your loan (cue flashback music): 

1.  Your personal loan is approved
2. Your lender borrows money in order to provide your loan
   
3. Your lender uses the interest you pay on YOUR loan in order to make payments on THEIR loan
   
4.  You choose to repay your loan early
   
5. Your lender charges an early repayment fee to cover their losses caused by the interest you will no longer be paying

To fee or not to fee?

That’s a good question! It’s worth doing the sums to figure out whether you’re better off suffering the dreaded early repayment fee in order to finish your loan early. You may still be ahead of the game by reducing the amount of interest you’ll pay over the long term.

The fee is usually calculated by looking at the remaining loan balance and loan term. For example, fixed rate personal loans often charge an “economic cost” or “fixed cost” for repaying a loan earlier than expected.

If you’re feeling unsure, call your lender to discuss the early repayment fee so that you know exactly how much you’ll be expected to pay

The good news.

This is one fee you can avoid.

Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your financial diligence.

At Plenti, we believe in tailoring personal loans to suit your unique financial situation and lifestyle. This means rewarding your strong credit history with attractive rates that are personalised to you and offering the flexibility to pay it back faster. In fact, we’ll never charge you fees or penalties for paying your loan back early.

This means you can increase your scheduled monthly repayment, make an extra payment, or pay off the loan in full at any time without being stung for extra charges.

It’s your life – you’re in control.

Life happens. Sometimes unexpected emergencies arise that put us in a tricky financial situation. Or perhaps you’re still tainted by a credit debt from years ago. No matter how you got there, it’s worth understanding how a low credit score can affect your personal loan application. 

Your credit score has a huge say in whether you’ll be approved for a personal loan and how much you’ll be able to borrow. It also impacts the interest rate you’ll be offered and other loan features. 

Your credit score is a number that sums up the information on your credit report. Your credit score tells the lender whether or not you are a trustworthy borrower and whether loaning you money is worth the risk. 

In a nutshell, your credit score helps lenders decide whether you’ll be approved for a personal loan, how much money they’re willing to lend you and what interest rate you qualify for. 

Comprehensive credit reporting

Around 50 major Australian lenders, including Plenti, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history.

This is a good thing. If you have the ability to take out a personal loan, you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

What is a good credit score?

Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

Check out this credit score table from Equifax so you know where you stand:

• Excellent: 833 – 1,200
• Very good: 726 – 832
  
• Good: 622 – 725
  
• Average: 510 – 621
  
• Below average to average: 0 – 509

If your credit score is over 600, chances are you will be able to secure a personal loan interest rate between 5% - 10% per annum. Scores below 510 are likely to attract a higher rate. 

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency. 

Knowledge is power!

Knowledge is power!

They say knowledge is power. And in this case, knowledge is your pathway to financial freedom. 

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

You can also obtain your credit report through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Give it a polish!

It makes sense to work on your credit health consistently so that you can apply for personal loans with confidence.

There are ways to clean up your credit report and increase your credit score to improve your chances of being approved:

• Pay your rent, mortgage and utility bills on time
• Make credit card repayments on time and try to pay more than the minimum repayment
  
• Lower your credit card limit
  
• Limit how many applications you make for credit 

All of these things will help your credit score to improve over time. 

Shopping around for the best personal loan can save you thousands in interest and fees. Right now, personal loan rates range from around 3.00% to 12.00%.

But the interest rate is only half the story.

It’s tempting to jump on the loan with the lowest interest rate. But what about those hidden fees and costs that can catch you off-guard? Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your personal loan.

Why is the comparison rate important?

You might be surprised to learn that the personal loan with the lowest interest rate isn’t always the cheapest. Once you factor in the relevant fees and charges, the true cost of the loan could be very different.

A comparison rate takes into account the:

•  loan amount
•  interest rate
  
•  loan term
  
•  fees and charges·      
  

The comparison rate paints a more realistic picture of the personal loan than you can get by simply comparing interest rates. It helps you weigh up your options and find a personal loan that best suits your needs.

Where can I find comparison rates?

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily. Keep in mind, comparison sites could be influenced by advertising. It’s always a good idea to check a variety of sources to see a broad range of options and compare the ratings and rankings.

Just remember, it doesn’t make sense to compare apples with oranges. Make sure you’re assessing the same loan type. For example, only compare an unsecured loan with other unsecured loans.

In Australia, lenders are required to show a comparison rate as an annual percentage when they advertise an interest rate. It’s a vital tool when researching the cost of the loan but it’s not perfect. Comparison rates don’t include early repayment fees, late repayment fees or deferred establishment fees, and it only applies to personal loans that have a fixed term.

Keep these factors in mind when deciding which personal loan is right for you:

• Interest rate: check the comparison rates
• Loan type: decide between a secured and unsecured loan type
  
• Fees: upfront plus ongoing fees
  
•  Loan term: personal loans are generally repaid over 1 – 7 years
  
• Features: does the personal loan include a redraw facility and/or can you make extra repayments without penalty?
  
• The Lender: choose a lender with excellent customer service

Will I qualify for a low rate?

The best way to know whether you will qualify for a low rate on a personal loan is to know your credit score. Generally speaking, the higher your credit score the better. Other factors that will impact your chances of being approved include:

•  Strong, steady employment background
• Home ownership
  
• Purpose of the loan
  

Find out your credit score before you apply for a personal loan. You can do this online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time.

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better!

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency.

Next steps.

Once you’ve made a short list of the best personal loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail.

Remember, the best personal loans aren’t just about what’s written down in black and white. It’s worth checking customer service ratings and reviews to find a lender with a friendly, helpful and responsive team. Good customer service can make a big difference to your overall experience.

Once you’ve decided on the best personal loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit.

Hot tip!

If you want to pay back your personal loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early. It’s your life. You’re in control. 

If you’ve got a big idea you want to bring to life, a personal loan can get you there faster. With a personal loan, you can make your dreams a reality today, using finance instead of waiting until you’ve saved enough to pay for your plans outright.

A personal loan allows you to borrow an amount of money and agree to pay it back over a certain time period (called a term), including interest. These payments can be made in regular payments (weekly, fortnightly or monthly) and a typical term is between 12 months and 10 years depending on the lender you choose and the amount you borrow.

The question is, can anyone get a personal loan? Use this guide to find out what you should consider before applying for a personal loan and the likelihood of being approved.

Risk versus reward 

To be eligible for a Plenti personal  loan you must:

• Be aged 21 or over
• Be an Australian citizen or permanent resident
  
• Be earning over $25,000 per year from a regular source of income that you can demonstrate
  
• Have a good credit history

Plenti will consider a loan application if you are self-employed. Additional credit assessment criteria and requirements may apply.

The fine details 

To obtain a personal loan, you’ll need to provide details about what you’re spending the money on, proof of identity and evidence that you’re able to make repayments. The type of information that you’ll be asked to provide includes:

• Proof of identity (passport or driver’s license)
• Proof of income (pay slip or tax return)
  
• Assets (such as property, vehicles or jewellery)
  
• Other debts (credit cards and loans)
  
• Regular expenses (rent and bills)
  
• Bank statements to show savings and repayments made in the past on loans or credit cards
  

Keep in mind, lenders might need to speak to your employer, landlord and/or accountant to make sure your information is accurate and to check your credit history. 

Know the score 

It pays to check your credit score before applying for a personal loan. 

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you are a trustworthy borrower. 

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. Checking your credit report will NOT impact your credit score.

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you buy. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit 

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a personal loan and securing a competitive interest rate.

Take the step 

At Plenti, your first step in applying for a personal loan is to  request a RateEstimate. Your RateEstimate assesses whether you’re eligible to apply for a loan with Plenti. We simply ask you a few questions so we can calculate an initial estimate of your borrowing potential, along with the rates, fees and charges that may apply to your loan.

Requesting a RateEstimate won’t impact your credit score and there’s absolutely no obligation for you to proceed with a loan application. It’s free, secure, and only takes one minute to complete. 

Turning 18 is a major life milestone, and the world becomes your oyster. Unless you’re lucky enough to have parents willing to bank-roll your adventures, chances are you’ll need to apply for a personal loan. 

But you’ll need to tick some boxes first and being aged 18 or over is one of them. Australian lenders require you to be an Australian citizen or permanent resident, have a job or regular source of income and be over the age of 18 before you apply for a personal loan.  

Some lenders might have extra lending criteria, and most won’t lend money if you’re an international student or if your only source of income is Austudy, Youth Allowance or Newstart.

No credit history? No problem! 

If this is your first personal loan, chances are you don’t have any personal finance history yet, also known as ‘credit history’, which means you won’t have a credit score. Without a credit score, lenders tend to view you as a ‘risky’ borrower because there’s no report card available that evaluates how well (or badly) you’ve handled your debts and repayments in the past.

Applying for a personal loan without a credit score can be a little tricky, but don’t lose heart. Follow this guide and you’ll soon be seeing your own big idea come to life.

Will I be approved?

If you can show that you have the means to make regular repayments on your personal loan without going into financial difficulty, you’ll have a better chance of being approved. Here are 5 ways to prove you’re a trustworthy borrower:

1. Have a secure job with a regular income (it doesn’t need to be full-time).
2. Make sure your income is high enough to easily meet the repayments for the loan you want.
   
3. Show that you save money from your income each month.
   
4. Make sure there’s no history of late payments on your bills (this includes Afterpay).
   
5. Save for a deposit in a high-interest savings account.
   

All of these things will help improve your chances of having your personal loan approved. 

Proof of life 

Before agreeing to loan you the funds for your dream (and by ‘dream’ we mean ‘budget’), the lender will want to be sure you have a stable home and job. Basically, they want to know you’re not a flight risk. Makes sense, right? 

Make sure you gather together the paperwork you need to show the following:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill, etc.
  
• Proof of income, such as recent payslips, current bank statements and a letter from your employer stating your employment details.
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.
•  Contact details for people who can authenticate these details, such as your employer, landlord or accountant.
  

Number crunch! 

Next, take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Once you have a particular personal loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees
  

Guaranteed security

a guarantor application could improve your chances of being approved for a personal loan if you have no credit score yourself. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Peer-to-peer lending

When you’re researching student personal loans, it pays to look beyond the ‘Big Four’ banks. Online lending platforms, also known as peer-to-peer lenders, often provide a faster approval process and lower interest rates than traditional lenders. 

This type of lender, also known as ‘peer-to-peer’ lending or marketplace lending, allows you to seek a loan from a private lender. All P2P lenders set their own loan requirements and terms. 

It’s a good idea to check the comparison rates of various lenders to make sure you find the best loan to suit your needs. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on car loans quickly and easily, including loans offered by P2P lenders.

Banks and credit unions 

Some banks and credit unions offer personal loans specifically for students, while others will simply offer their regular personal loan products. You probably have a long history with your bank through your savings accounts, which might help if you have no credit history. 

A traditional personal loan from a bank or credit union can be secured or unsecured.

Secured personal loan: This type of loan is usually secured by an asset. This means if you can’t make repayments, the lender can take the asset and sell it to recover the cost of the loan. 

Unsecured personal loan: An unsecured personal loan usually has a higher interest rate than a secured personal loan. This is because an unsecured loan does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. The lender assesses your credit score and income to approve the loan.

Fixed or variable interest rate?

When you apply for a personal loan, you have the option to choose between a fixed or variable interest rate. 

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation.

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan. 

Pros:

• You know exactly how much your repayments are each month.
• You can plan and budget with certainty, knowing your repayments won’t change.
  
• You’re protected from future interest rate rises.

Cons:

• If the market interest rate falls, you pay more interest with a fixed rate.
• Some lenders may insist upon a shorter lending period.
• Fixed rate personal loans may not have a redraw facility.
  
• If you want to pay back your loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early. 
  

Variable Interest Rate

A variable rate rises and falls with the market interest rate as it responds to current economic conditions. This means you could end up paying more or less for your personal loan, depending on the market rate.

Pros:

• If the market rate drops, you could pay less for your car loan overall.
•  Most lenders offer longer repayment terms with a variable interest rate.
• You may have the option to make additional repayments which could save you money over the life of your loan.
  
• You may be able to redraw from any additional repayments you have made if you need some extra cash along the way. 
  

Cons:

• If the market rate rises your repayments increase.
• Interest rate rises are unpredictable and could make it harder to budget and make plans for the future. 
  

Choosing between a fixed or variable interest rate is an important decision that could have a big financial impact down the track. Some people prefer the predictability of a fixed rate personal loan, while others prefer the flexibility of a variable rate.

Build your credit history

There’s no doubt about it, having a positive credit report makes it much easier to get approved for a personal loan. The good news is it’s easy to build your credit history and you don’t need to take out a credit card to do it. Simply by paying your bills on time, such as mobile phone and electricity, you will start to build a positive financial report. Think about setting up direct debit payments for these bills so that you always pay on time. 

If you’re in the market for a renovation loan, you probably already know you’ll have to pay interest to your lender. But what about those hidden costs that can catch you off-guard? Shopping around for a renovation loan with fewer fees can save you thousands in the long run. 

Here are some of the extra charges that could apply to your renovation loan:

• Establishment/upfront fee: You could be charged a fee when you apply for a renovation loan to cover the cost of assessing your application and preparing loan documents.
• Service fee: Monthly account keeping fees add up over time. It’s worth calculating the total cost for the life of the loan so you’re not caught by surprise.
  
• Late payment fee: Your lender may charge a fee if you default on your loan or miss a payment.
  
• Early repayment fee: Do you hope to pay your loan off sooner? Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.
  
• Other fees: Check out the terms and conditions of your loan for a full list of fees and charges.
  

At Plenti, we believe in tailoring unsecured renovation loans to suit your unique financial situation and lifestyle. This means rewarding your strong credit history with attractive rates that are personalised to you and offering the flexibility to pay it back faster. In fact, we’ll never charge you fees or penalties for paying your loan back early. 

It’s your life. You’re in control. 

Hot tip!

Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. This means the comparison rate will be higher than the interest rate charged on the loan. In Australia, lenders are required to show a comparison rate when they advertise an interest rate.  

For renovation loans, there is a standardised measure for how comparison rates are calculated:

• For renovation loans 3 years and under comparison rates are calculated on a $10,000 loan amount over 36 months.
• For renovation loans 4 years and over comparison rates are calculated on a $30,000 loan amount over 60 months.
  

It’s a helpful tool when researching the cost of the loan. But remember, a comparison rate doesn’t include early repayment fees, late repayment fees or deferred establishment fees. 

Refer to the terms and conditions of your loan if you’re unsure about these extra charges. 

Just as everyone’s home is different, there is no one size fits all when it comes to loans for home improvements. While not quite as much fun as poring over floor plans, you do need to do your homework to find the one best suited to your needs.  

So how can you decide which loan is right for you? You will first need to make a few key decisions.  Planning and considering your situation upfront will help when comparing what loan product is going to be the right match, and offer you the best value. 

1. Loan Amount: How much do you really need?
To decide how much you need to borrow, do some research and budgeting to work out how much (approximately) you are going to need for your renovation plan. It’s so easy to get carried away, but it’s smart to only borrow what you really need, even if more than that is offered to you by a lender.

Remember, when you borrow money to pay for something, the actual final ‘cost’ of that item becomes much higher when you factor in the cost of the loan. For example, if you borrow $20,000 to improve your bathroom with a 5 year Unsecured Loan and at a fixed interest rate of 12.50%, that bathroom may actually cost you around $27,417. 

2. Repayments: How much can you afford to repay?
Look at your everyday budget, or create one, to see how much you can realistically afford to put towards loan repayments. It’s always good to give yourself a buffer; failure to make a repayment at any time can cost you a lot in fees. 

Of course, it isn’t good for your credit rating either. Are you expecting any major expenses or changes in income in the next few years, changing where or how much you work, or perhaps hoping to have a baby? Be sure to build this in.

Whether you receive your income weekly, fortnightly or monthly, you need to know how much you have left over at the end of each pay period and how this will align with your repayments. This is to ensure there are no missed payment surprises. It may be worth opening a separate bank account for your repayments and transferring these funds in on payday so you are never caught out.

3. Loan Term: How long will you need to repay?
Divide the total amount of your ideal car loan amount by your planned monthly repayment to get a ballpark amount of time you’ll need to repay the loan. For example, Sarah and David wanted to borrow $24,000 to pay for a new kitchen. Based on their salary and existing expenses, he thought $120 per week / $480 per month would be an affordable repayment.  This would be $5,760 per year, meaning in 5 years they’d have paid $28,800— roughly the full amount, accounting for interest and charges.

A longer-term loan might seem attractive as it means lower monthly repayments, however the overall (lifetime) cost of the loan is significantly higher because you’ll pay more in interest and potential fees. That being said, provided you look for a loan with flexible repayments you’ll be able to take advantage of any future increases in salary that may allow you to pay down your loan faster without penalty.

4. Loan Type: Decide between a secured or unsecured loan
Given you already have a valuable asset — the property that you are improving — it can be very cost-effective to offer your property as security on your loan.  If you are confident in your ability to repay the loan, a secured loan will get you a better rate and may also unlock access to greater funds. It’s important to be aware that your asset will be at risk if you can’t make the repayments.

5. Compare: Start to request and examine your personalised offers
Now you know roughly how much you need to borrow, what you can afford as  a repayment, and how long you’ll need to repay your loan. Next, you can start to plug these values directly into lender or comparison sites to get an estimate of your personalised interest rate and repayments. 

Experiment with different combinations, such as different loan terms or repayment amounts, and match them against your needs. Need more help deciding? There are many third-party agencies (which don’t sell loans) that both rate and compare a broad range of loans.

Canstar is one of the most established financial comparison sites. They’ve been comparing products without bias since 1992. They release annual star-ratings for a range of personal loans from many providers. To do this, Canstar comprehensively and rigorously examines a broad range of loans available across Australia. To come up with an overall score, they award points for:

• Price — comparative pricing factoring in interest and fees
• Features — like the complexity of the application, the time involved before settlement, product management, customer service and loan closure

These are then aggregated and weighted to produce a total score. This means Canstar’s ratings are reputable and transparent, so you can trust the information they provide but still dig deeper if you want to.

Other comparison sites can also be useful, however, you should always check around, as some may have a ‘sales’ element — that is, they may receive money for the people that visit their website en route to a particular lender. So if the best rate isn’t being offered, it may not show up on their comparison. They also have ‘promoted’ or ‘featured’ loans, which they are paid to highlight, even if those loans do not truly reflect the best value car loans on the market. 

Another way to get information on your lender and loan is to read feedback from real, verified customers’ on ProductReview.com.au.

What questions should I ask when choosing a loan?Here’s a useful checklist to be confident you understand your loan:

• What are the interest rate and the comparison rate?
• How do these rates compare to other types of loans?
• What are the fees and charges? (e.g. upfront, ongoing, early exit)
• What are the terms and conditions?
• Do the loan term and loan amount fit your needs?
• Can you afford the repayments?
• Are you comfortable with the lender? Have you checked its reputation and accreditation?

Comparison rates are a good starting point, but you still need to decide what will work best for you. The costs involved are a major factor, but once you have shortlisted a few loans with similar costs, make time for these final checks:

• Are there flexible repayment options? Usually, you can choose between weekly, fortnightly or monthly repayments according to what suits your pay cycle. However, not all lenders offer this. It may matter to you, it may not
• Compare a loan’s conditions and fees around making extra repayments and paying the loan off before the end of the term. This can be a great way to reduce the overall cost of your car loan, but not if you’ll incur extra penalties
• Can you use the funds for the renovation you have planned? Or are your plans still coming together making that a difficult question. You can’t always use the borrowed money for whatever you like.
  
  For example, when extending a mortgage, you may only be able to spend the loan funds on improvements that meet the lender’s criteria. Other types of loans can be more flexible. Do make sure your purchase plans match the lender's policies
  
• What are the options for managing the loan over time? Check and compare how easy the loan will be to manage with regard to repayments, your personal details, any refinancing down the track. The option to manage your account online is often available, but not always, and some lenders have more functionality than others. Using direct debit for repayments is common, yet without it, monthly repayments will be much less convenient and you are more likely to be penalised for late payments if you aren’t perfectly disciplined
  

With this homework under your belt, you’re well on the way to being able to compare a range of loans out there, so you can feel confident you’re choosing the right one for you.

Applying for a renovation loan directly online is probably much quicker and easier than you might think. And you might be surprised at how the value stacks up compared to other kinds of loans too.

Am I eligible?

Loan application approval and how much you can borrow, varies from loan to loan, and lender to lender. 

For starters, you will need to be:

• Over 18 years of age, and in some cases over 21
• An Australian citizen or permanent resident
• Earning at least $25,000 per year, from a regular, proven source of income. If you are self-employed, you will have to provide additional information
• The holder of a provisional or full driver’s licence

If you have existing loans or debt, there may be fewer options open to you. It’s also a good idea to check the eligibility criteria for any specific lender you are considering before submitting an official application to avoid any unnecessary negative impact to your credit score. Some lenders will have a higher salary threshold for borrowers, and make a point of only lending to those with a high credit score. 

What is the process?
Once you have shortlisted your preferred lenders you can usually request a quote or rate estimate of your borrowing power and loan options, before you officially apply. This is a good idea, as this process won’t affect your credit score. 

Depending on the lender, if you want to proceed, you can apply online, over the phone or in-person if the lender has physical branches. You’ll usually need to verify your identity, connect the lender to your online banking so they can verify your income and expenses and potentially provide additional information based on your loan choice. For example, if you are applying for a secured loan, you’ll need to provide information about the property you are providing as security. 

If approved, you’ll then need to accept your loan agreement. The majority of renovation loan agreements can be signed and accepted electronically.

What documents will I need to apply?

To process your application a lender will typically ask you to show:

• Proof of identification: an Australian driver's licence or a passport
• Proof of address: copies of your recent utility bills
• Verification of a stable income: payslips, bank statements or tax returns
• Details of your expenses and liabilities: bank, credit card and loan statements

Plenti has a streamlined online application portal, where you can connect your bank details securely. That’s one of the ways we make applying for a loan simpler, faster and easier than ever. 

What will your lender consider?

• Your employment stability
• Your income (e.g. salary, rent, interest, etc.)
• Your expenses (eg mortgage, groceries, etc.)
• Your repayment history on other loans
• Credit agency/bureau information (credit report and score/ratings)

These findings will determine if you’ll be approved, and if so, for how much you’ll be able to borrow. Often the interest rate offered will be lower if you have a good credit rating. If you’ve had problems paying your bills and debts in the past, you may only be offered a loan at a higher rate.

What is my Credit Score?
Based on the information in your credit report, your credit score, or rating, is a single number that sums up how trustworthy you are as a borrower. Credit scores are typically on a scale of 0–1,200 or 0–1,000, depending on the credit agency.

The higher your credit score, the more ‘reliable’ you are perceived to be and the greater the likelihood of your loan being approved, at a lower interest rate. Now that the industry uses comprehensive credit reporting (CCR), credit reports are more detailed so that lenders have a better picture of both the positives and negatives.. 

To calculate your credit score, credit agencies will assess:

• How much money you’ve borrowed in the past
• How much credit you currently have
• How many, and what type of credit applications, you’ve made (this can now include payday loans and buy-now-pay-later services such as AfterPay)
• Whether you usually pay your bills and loan repayments on time
• Any loan defaultsAny court judgmentsInformation from your bank, telco, insurance and utility companies
• Your age, address and employment situation
• Up to two years of your general financial history

You can request your report and rating/score from credit rating agencies before you go through with a loan application. This does not usually impact your credit score. Be aware that because there are multiple credit agencies, the one your lender uses may not be exactly the same.

Get a free credit check from one of Australia’s major credit rating agencies: Equifax, Experian or Illion.

How do I improve my chances of getting approved?
Applying for a loan has the potential to impact your credit score, particularly if your application is declined.Therefore, it’s important that you put your best foot forward before beginning the application process. We’ve assembled a useful selection of tips to help you submit a strong loan application:

1. Make sure you pay your existing debts on time: Did you know that repayments that are more than 14 days late may be recorded on your credit file? While less serious than a default, a series of late repayments can have an equally negative impact on your credit score. Making late repayments also sends a bad message to a prospective lender and may result in you paying higher interest rates.

If you do ever find yourself behind on your repayments, it’s important you contact your lender directly. Working with your lender toward a mutually beneficial outcome can help to protect your credit score. Remember, it’s far easier to protect a good credit score than it is to improve a weak one.

2. Only request as much as you need to borrow: When assessing your application, a lender will look at whether you can service a loan. Essentially, this evaluates whether, after all your expenses, you have income left over to meet the repayments of your proposed loan. If you request an amount that is more than your finances say you are able to repay, it’s highly unlikely you will get approved.

In some cases, a lender may offer you a longer loan term to reduce your repayments, but it’s best to do your homework first. Use a repayment calculator and budget to figure out what you can reasonably afford.

3. Review your credit history: Australia has three main credit bureaus, Equifax, Illion, and Experian. You can request a free copy of your credit score once a year. Once you’ve verified your identity (i.e. with a driver’s license, passport, etc.) the bureau is required to provide you with your credit report within 10 days.

Your credit report will provide an overview of your credit history, including previous loans, existing debts and your performance as a borrower. You should ensure all the information contained in your credit report is accurate, and if not, contact the bureau to have it remedied. This will have a direct impact on your credit score. If you’re unsure of how to interpret your credit score, see this ASIC guide.

4. Pay down existing debts: Lenders may look unfavourably on an application for individuals with large amounts of debt, particularly if the debts are already at the limits of what you can afford. It’s important to demonstrate a concerted effort to repay your existing debts to a reasonable level.

This applies even if your personal loan is for the purpose of consolidating your debt. While a move to lower interest rates makes sense, it may be hard to get approved without opening up some additional capacity between your income and expenses.

5. Minimise your credit card balance: Using a credit card can be a great way to help boost your credit rating by demonstrating you are financially responsible. However, you need to manage your credit card carefully to ensure your balance is consistently low. Failure to make repayments can have an equally negative impact on your credit score.

Finally, lenders are now required to assess your application based on your credit card limits, not the outstanding balance. If you have unused cards or excess limits, look into reducing them before you apply for a new loan. 

Within the advertised range, most lenders apply loan capping rules.
This means they adjust the maximum loan amount you may be eligible for based on your credit score, income, mortgage status and a range of other factors. This maximum loan eligibility will usually be communicated to you when you get an initial quote or rate estimate from a lender.

Counter-offers
Even once you have applied with a lender for a specific loan amount, they may come back to you with a ‘counter-offer’. A ‘counter-offer’ is a conditional approval based on a loan amount that is lower than the amount you’ve requested, but one the lender believes you can afford and meets their responsible lending requirements.

Whilst it may be tempting to borrow as much as you can, make sure your repayments will be realistic to make within your budget. This will be a significant factor in determining whether your loan will be approved.

At Plenti, we assess your loan application in line with our credit criteria and our responsible lending obligations. Whilst no guarantee, following the tips above will go a long way to improving the prospect of successful loan approval.

How long will it take to get approved?
At Plenti, once your loan application is approved (and you have accepted your loan contract) your funds are transferred into your account the following business day. 

The funds will be transferred  into the same account that you have nominated for your direct debits. And then it’s over to you, to start that renovation!

Put your good credit history to work with a personal loan for debt consolidation.

Wondering how to consolidate debt? Debt consolidation loans aren’t a big mystery – they’re simply personal loans specifically for debt consolidation. To understand them, you simply need to understand loans.

What to look for in a debt consolidation loan:
Whether it’s a personal loan for holiday or a personal loan for debt consolidation, all loans have the same building blocks. It’s about finding the right fit for you.

Interest rate
Money costs money. So when you borrow it, you need to pay it back with interest. The interest rate, also known as Annual Percentage Rate (APR) or Advertised Rate, is the percentage that you’ll pay on top of the amount you borrow. It’s usually expressed as an annual rate. 

How is interest calculated? To work out your rate, lenders will factor in things like your credit history, your repayment schedule, the risk (both for lending to you and how the market is going) and their underlying costs.

Most lenders start with a headline advertised rate – the lowest rate they have available. But they might not offer you this rate – it’s usually only available to a small proportion of borrowers and may come with set conditions to qualify (e.g. a high credit rating plus homeownership).

So, it pays to do your research. Before you apply anywhere, get a personalised rate from a number of providers. Just be sure that the lender’s quote process is ‘credit score friendly’. That is, they only conduct a soft check on your credit file which won’t impact your credit score.

Remember, the loan with the lowest interest rate might not necessarily be the best loan for you. Be sure to consider the total cost of the loan including interest, fees and other costs to truly assess the value of any interest rate on offer.

Comparison rate
Interest isn’t the only cost of a loan; it will usually come with fees and other charges. These can be quite significant and quickly outweigh a great rate. To avoid getting caught out, look at the comparison rate, which factors in the interest rate and any fees, expressed as an annual percentage. The comparison rate is usually higher than the interest rate charged on the loan.

Because it’s so important, lenders and brokers must provide a comparison rate when they advertise a loan interest rate under the National Consumer Credit Protection Regulations.

How is it measured?
For personal loans, there is a standardised measure for how comparison rates are to be calculated and displayed. For variable and fixed-rate personal loans, the comparison rate is based on a $30,000 unsecured loan over 5 years.

But there’s a catch – not all costs are included. So you don’t get an unwelcome surprise later, you still need to factor in:

• Late payment fees
• Break costs or early termination fees
• Deferred establishment fees
• Broker fees (when taking out a loan through a broker, the broker’s service fees aren’t included in the comparison rate, which can be significant)
• Repayments

Once you’ve got all your ducks in a row and consolidated your debt into one loan,it’s time to repay the money. During the loan process you’ll agree to a regular schedule for repayments – either weekly, fortnightly or monthly. Factor these repayments into your budget and be sure that your loan repayment calculations have been quoted inclusive of any ongoing fees.

Your lenders might also offer a balloon payment, which is a lump sum repayment you make at the end of the loan term. It can reduce your regular repayments, making it a handy way to manage your cash flow. But remember, the lump sum is due at the end of the loan, so you still need to find the money along the way. You’ll also be paying interest on a higher loan balance as you go.

Upfront fees
Also known as application or establishment fees, they’re ‘one-time’ charges at the start of a loan that get the ball rolling. They can include:

• A flat fee (e.g. $499) that applies regardless of the value of the loan
• A tiered fee (e.g. $250, $500, $750) based on the value of the loan
• A percentage fee (e.g. 3%) based on the total amount borrowed and the credit or risk profile of the customer
• A hybrid fee (e.g. $200 + 2% of the loan amount)

Your lender may charge any or all of these, it’s up to them.

But, fun fact, even though they’re called ‘up front’, that’s not when you pay them. Establishment fees are usually capitalised to the loan, meaning they’re added to your loan balance.

That means you’ll be paying interest on those fees as part of your total loan. The difference might be only a few dollars on each repayment if it’s a small upfront fee. But if it’s bigger, it can quickly add up.

Monthly or ongoing fees
Your lender may charge any or all of these, it’s up to them.

Even though they’re called ‘upfront,' that’s not when you pay them. Establishment fees are usually capitalised to the loan, meaning they’re added to your loan balance.

That means you’ll be paying interest on those fees as part of your total loan. The difference might be only a few dollars on each repayment, if it’s a small upfront fee. But if it’s bigger, it can quickly add up.

Also known as account keeping or loan management fees, ongoing fees are usually paid monthly across the life of a loan. They don’t reduce what you owe at all, they just go straight to the lender. Generally the lower the fees, the better. But again, it’s all relative to the total amount you repay when you factor in all interest payable and costs.

Brokerage fees
If you use a broker to help track down your loan for you, remember they’re doing a job. That means you’re paying them, whether you realise it or not.

In the case of personal loans, the brokerage fee is often capitalised to the loan amount and is in addition to the lender’s own upfront fee. Brokers can also have commission arrangements with lenders that are either built into your interest rate or offer them a return based on the final rate you accept. Be sure to factor that in when deciding if their services are worth it.

Penalty fees
Nobody ever takes out a loan expecting to pay penalty fees. But life doesn’t always go to plan. The best you can do is try and minimise the damage.

The most common penalty fee is the ‘default’ or missed payment fee. If you make a payment late, or there are insufficient funds in your nominated account on the day a payment is due, you can get slugged with this fee.

Late fees vary from $10 to as much as $35. Some lenders may waive the fee if your account is brought up to date within 3 days of a missed payment, but it’s best not to risk it. Be sure to keep an eye on your spending and make sure you have enough in your account to pay the loan. Some borrowers even  set up a separate account dedicated to paying their loan.

Early repayment fees
If you think you want to pay your loan down ahead of schedule, look for a loan with low or no early repayment fees. Otherwise, all your hard work may go to waste if you get charged for it.

Exit fees or early repayment fees are more common with secured low-rate loans. There are different types

Ongoing fees, also known as account keeping or loan management fees, are usually paid monthly across the life of a loan. They don’t reduce what you owe at all, they just go straight to the lender. Generally the lower the fees, the better. But again, it’s all relative to the total amount you repay when you factor in all interest payable and costs.

Brokerage fees
If you use a broker to help track down your loan for you, remember they’re doing a job. That means you’re paying them, whether you realise it or not.

In the case of personal loans, the brokerage fee is often capitalised to the loan amount and is in addition to the lender’s own upfront fee. Brokers can also have commission arrangements with lenders that are either built into your interest rate or offer them a return based on the final rate you accept. Be sure to factor that in when deciding if their services are worth it.

Penalty fees
Nobody ever takes out a loan expecting to pay penalty fees. But life doesn’t always go to plan. The best you can do is try and minimise the damage.

The most common penalty fee is the ‘default’ or missed payment fee. If you make a payment late, or there are insufficient funds in your nominated account on the day a payment is due, you can get slugged with this fee.

Late fees vary from $10 to as much as $35. Some lenders may waive the fee if your account is brought up to date within 3 days of a missed payment, but it’s best not to risk it. Be sure to keep an eye on your spending and make sure you have enough in your account to pay the loan. Some borrowers even  set up a separate account dedicated to paying their loan.

Early repayment fees
If you think you want to pay your loan down ahead of schedule, look for a loan with low or no early repayment fees. Otherwise, all your hard work may go to waste if you get charged for it.

Exit fees or early repayment fees are more common with secured low-rate loans. There are different types:

• A fixed fee where the loan is repaid in full any time prior to the end of the loan term (e.g. $500)
• A fixed fee where the loan is repaid in full prior to a minimum period (e.g. $250 if full repayment is made less than 2 years into a 5-year loan)
• A variable fee based on the amount you would have paid in interest and fees had the loan run to full term

Loan amount
How much money do you need to repay your existing debt? Add it up and that’s your loan amount (plus those upfront fees). This is the principal part of your loan that you’ll make repayments on. Interest is charged on the outstanding balance of your loan.

In Australia, debt consolidation loans usually range from $2,000 to $50,000, but some lenders will go higher.

Loan term
A debt consolidation loan gives you the space you need to pay off your debt over time. In Australia, lenders offer loan terms between 1 and 7 years, with 3, 5 and 7 year terms being the most common.

If you’re tempted to take your time, just remember, a longer-term loan might have a higher interest rate, meaning loan will cost you more overall. But when it comes to cash in the bank, your monthly repayments will be lower. Do your sums and choose what’s right for you.

Customer experience
Whilst not technically part of your loan, it’s the X factor that can make all the difference on your journey to financial freedom. Because the best way to consolidate debt into one payment is with a lender that cares.

You want a lender who makes it quick and easy to apply, get approved and manage your loan. And if you have a problem, you want a lender that cares about your experience. It can go a long way towards trusting you’re getting the best deal.

Anything else?
A debt consolidation loan can affect your credit score, and unfortunately, things usually get worse before they get better. Opening a new credit account temporarily lowers your credit score. Lenders look at new credit as a new risk, causing a temporary dip in your score. You can fix this by paying your new consolidated debt on time – that should bump it up higher than before.

What can I use my debt consolidation loan for?

Consolidate credit card debt, car loans, even outstanding tax debt – it’s up to you.

There aren’t many rules when it comes to debt consolidation loans. As a personal loan, you’ll have your own personal reasons. So whether it’s to consolidate credit card debt and save on high-interest rates, or combining car finance with other personal loans to make managing your monthly repayments easier, the choice is yours.

For life’s little expenses

You can use a debt consolidation loan to repay a number of debt types, including:

• Credit card debt
• Store card
• Hire purchase debt
• Car loans
• Medical bills
• Rent owing
• Utility bills (mobile, internet, electric, gas, cable, etc)
• Personal lines of credit
• Income taxes
• Bank overdrafts

For taking the wheel
If you have repayments for credit cards, student debt, store cards and more all due on different days of the month, it can be tricky to keep track. You risk getting confused about what’s due when, it can be hard to know if you’ll have the cash in the bank when you need it, and it’s easy to miss a payment. Those late payment fees are just money down the drain. Having just one repayment to make can help you take back some control and help you avoid the risk associated with missed payments.

For an easier ride
A debt consolidation loan doesn’t mean you’re instantly on easy street – you still have to pay off the loan. It does, however, make your debt journey a little simpler. A debt consolidation loan works just like a personal loan. That is, you borrow a specific amount of money and then pay it back with interest over an agreed term. When and how much you pay is up to you. Decide on your loan amount, pay it over a set term with regular payments you can afford and breathe easy knowing you’ve got your debt covered.

For keeping more money in your pocket
Taking out a personal loan to consolidate credit card debt can be helpful if it means you pay less in fees. Debt consolidation loans generally allow you to enjoy a lower interest rate than you would receive with a credit card. They also offer a consistent repayment schedule. Manage your money right and you might even be able to make early repayments. All this good work adds up, helping save interest, pay down your debt faster, and getting you out of debt sooner.

The type of debt consolidation loan, its conditions and how quickly you pay it back impacts how much a loan costs you over its lifetime. You need to do your homework to decide what is the best debt consolidation loan for you. 

To work out the overall cost of your debt consolidation loan, you need to factor in:

1. Debt consolidation interest rates: Fixed or variable:The biggest factor in how much a debt consolidation loan will cost you is the rate of interest you’ll pay on the amount borrowed. If you are opting for a variable rate loan, it is best to also calculate a worst-case scenario, one where a loan's interest rates rise significantly in the future to be sure you have a comfortable buffer in the event things change. 

2. Upfront fees - The ‘establishment’ or application fee can vary greatly, so it’s an area where shopping around can make a difference. A loan with a low interest rate could have high fees attached. 

3. Ongoing fees - Ongoing fees that occur throughout the loan:Any monthly or annual fees (e.g. account keeping fees)Any default, dishonour or missed payment feesAny other hidden fees — check the terms and conditions to find these

These three costs can be combined to create a comparison rate. As long as you are comparing the same debt consolidation loan terms and amount, a comparison rate helps you to compare the cost of different loans. 

There may be fees for early repayments or if you pay back the loan in full early. Be sure to balance these against the benefit of reducing the amount you owe and therefore pay in interest.

Always shop around and use comparison tables, a repayment calculator and the comparison rate as a guide.

Debt consolidation loan interest rates

The interest rate, also known as Annual Percentage Rate (APR) or Advertised Rate, is the percentage that you’ll pay on top of the amount you borrow in interest, usually expressed as an annual rate. Interest rates vary depending on the lender, your credit history, your repayment schedule and a range of other factors. They are based upon the lender’s calculation of risk (for you as an individual and the market as a whole) and their underlying costs.

Many lenders market their debt consolidation loan products using a ‘headline’ advertised rate, which represents the best rate they are able to offer a customer. This low rate is often available to only a small proportion of borrowers.

Before you apply anywhere, it pays to do your research and get a personalised rate from a number of providers. You just need to make sure that the lender’s quote process is ‘credit score friendly.’ That is, they only conduct a soft-check on your credit file, which won’t impact your credit score. Asking Plenti for a RateEstimate will not affect your credit score. 

The loan with the lowest interest rate does not necessarily mean the best debt consolidation loan for you. You need to consider the total cost of the loan, including interest, fees and other costs to truly assess the value of any interest rate on offer. 

Debt consolidation loan interest rates will vary according to the type of loan: secured or unsecured. Usually a secured debt consolidation loan will attract a lower interest rate than the rate for an unsecured loan, because you’re offering something as security against defaulting on the loan. 

Debt consolidation loan comparison rates
The comparison rate represents the overall cost of a loan, including the interest rate and fees, expressed as an annual percentage. As a result, the comparison rate is usually higher than the interest rate charged on the loan. 

Under the National Consumer Credit Protection Regulations, lenders must provide a comparison rate when they advertise an interest rate. 

For car loans, there is a standardised measure for how comparison rates are calculated:

• For car loans 3 years and under, comparison rates are calculated on a $10,000 loan amount over 36 months
• For car loans 4 years and over, comparison rates are calculated on a $30,000 loan amount over 60 months

Whilst the comparison rate is a useful tool for comparing debt consolidation loans on a like for like basis, it’s important to remember that not all costs are included. For example, you still need to consider late payment fees, early repayment fees and deferred establishment fees.

Debt consolidation loan repayments
Your loan repayments are the amount you agree to pay to your lender on a regular schedule. Repayments can be weekly, fortnightly or monthly and vary by lender. Whereas interest rates and comparison rates can sometimes hide the true cost of a loan, your monthly and total repayments provide a clear basis for comparing the value of loans from different lenders. When making your comparisons, however, it is important that the loan repayment calculations have been quoted inclusive of any ongoing fees for all lenders.

Upfront fees
Upfront fees, also known as establishment fees or credit assistance fees, are ‘once-off’ charges that are applied at the commencement of a debt consolidation loan. These fees can be:

A flat fee (e.g. $150) that applies regardless of the value of the loanA tiered fee (e.g. $250, $500, $750) based on the total amount borrowedA percentage fee (e.g. 4%) based on the total amount borrowed and the credit or risk profile of the customerA hybrid fee (e.g. $200 + 2% of the loan amount)

Upfront fees are usually added to the amount you wish to borrow. For example, if you are borrowing $10,000 with an upfront fee of $300, the total loan amount on commencing the loan will be $10,300.

Why is this important? Well,that interest rate you are being offered will be applied to the total loan amount – inclusive of your upfront fee. In the case of a small upfront fee, the difference might be a few dollars on each repayment. On an upfront fee of 4%, however, you could be paying $1,200 on a $30,000 loan, meaning you will be charged interest on a $31,200 balance. Ouch!

If you’re considering a lender with a low-interest rate, it’s important to make sure there isn’t a high upfront fee that outweighs the benefit of the lower rate. This is particularly true of percentage-based fees that flex with the amount being borrowed. Checking the comparison rate and the proposed repayments will allow you to assess this compared to other lenders.

Ongoing or monthly fees
Ongoing fees, also known as account keeping fees or loan management fees, are fees that are paid every month across the life of the loan – without reducing the amount you owe. For example, a $10 monthly fee on a 5-year loan adds up to $600 across the life of the loan. That’s a lot of money that’s not going to repay your loan principal.

Banks and larger lenders often have lower upfront fees that are offset with a monthly fee of $10 to $13. This means the net cost of the upfront fee and the monthly fee may be higher than you otherwise would have paid for a lender with a higher upfront fee and no monthly fees. In the end, it pays to do the maths on ongoing fees before you commit to a particular lender.

Early repayment fees
Repaying your debt consolidation loan as quickly as possible is a clever strategy as it will reduce the overall amount of interest you pay on your loan. However, if you do find yourself in a position to do this (well done!), the last thing you want is to be hit with an early repayment fee also known as an exit fee. 

Early repayment fees can range from $0 up to $800 or a % of the loan value on repayment, with $150-175 being the most common fee. That’s a fair amount for you to pay for doing something that’s good for you. Therefore, it pays to read the fine print on fees before you commit to a loan.

It’s worth noting that some lenders have set conditions that trigger an early repayment fee that varies with the type and duration of the loan. For example, unsecured fixed interest rate loans with the banks often have far stricter early repayment terms than for their variable rate loans. Lenders with no early repayment fees ultimately provide you with the highest degree of flexibility in how and when you repay your loan. Plenti does not charge any early repayment fees. 

Market Insight. The average Plenti borrower takes just 28 months to repay a 3 year loan and 43 months to repay a 5 year loan. That’s a lot of people who are saving thousands of dollars in interest thanks to no early repayment fees.

Penalty fees
We all know we should try to avoid penalty fees at all costs — it’s just throwing your money away — but we’ve all missed a direct debit from time to time. That’s why you should always make sure you are aware of any penalty fees and make sure they are not too onerous.

The most common penalty fee associated with loans is the ‘default’, late or missed payment fee, which usually arises where there are insufficient funds in your nominated account on the day a payment is due. Late payment fees range from $20 to $35, however, some lenders will waive the fee if the account is brought up to date within 3 days. It can help to make a budget of your expenses before you agree to the loan so that you know that you’ll comfortably be able to make repayments.

You should also consider opening separate savings accounts to transfer funds into each payday, which are separate from your daily transaction account to ensure funds are always available. When it comes to penalty fees, it is a case of buyer beware. Always take the time to read the loan terms and conditions and look out for any other hidden fees, including ‘new age’ penalty fees like charges to receive paper statements.

Not all loans are the same. The one that’s right for you will depend on how much you owe and how easily you can pay it back. 

It really comes down to finding the one that’s the best for you. So how can you decide which lender to go with and what repayments and loan terms to agree to? First, you’ll need to take stock of your situation and make a few key decisions.  

Planning and considering your situation upfront will help when comparing which debt consolidation loan products are available that might really fit your needs, and offer the best value. 

1. Loan amount: How much do you really need?
To decide how much you need to borrow, do some research and budgeting to work out how much (approximately) you are going to need to take control of your finances. In the case of debt consolidation, it helps to know exactly which debts you are consolidating to really have a handle on how much money you have outstanding. 

It’s smart to only borrow what you really need, but you also don’t want to have to look for additional finance to get on top of bills that might be just around the corner. 

2. Repayments: How much can you afford to repay?
This is key for those borrowing for debt consolidation. Now is the time to take a closer look at your everyday budget, (or to create one), to see how much you can realistically afford to put towards repayments. Be sure to give yourself a bit of a buffer; failure to make a loan repayment at any time can cost you penalty fees and won’t do your credit score any favours.

Are you expecting any changes in income in the next few years, changing where or how much you work or perhaps hoping to have a baby? Be sure to build this in.

Whether you receive your income weekly, fortnightly or monthly, you need to know how much you have leftover at the end of each pay period and how this will align with your repayments. It may be worth opening a separate bank account for your repayments and transferring funds for loan payments in on payday so you are never caught out. 

3. Loan term: How long will you need to repay?
Divide the planned loan amount by your planned monthly repayment to get a ballpark amount of time you’ll need to repay the loan. For example, Tim calculated that he needed to borrow $24,000 to get on top of his student debt, credit cards and to pay off the rest of his car loan. Based on his salary and existing expenses, he thought $120 per week/$480 per month would be an affordable repayment.  This would be $5,760 per year, meaning in 5 years he’d have paid $28,800 — roughly the full amount, accounting for interest and charges.

A longer-term loan might seem attractive as it means lower monthly repayments, however the overall (lifetime) cost of the loan is significantly higher because you’ll pay more in interest, and potential fees. That being said, provided you look for a loan with flexible repayments, you’ll be able to take advantage of any future increases in salary that may allow you to pay down your loan faster without penalty.

4. Loan type: Decide between a secured or unsecured loan
Do you have an asset that you are willing, or able, to put up as security against the loan? Perhaps property, or a new or nearly new car? If you are confident in your ability to repay the loan, a secured loan will get you a better rate and may unlock access to greater funds. Be aware, however, that your asset will be at risk if you can’t make the repayments.

5. Compare: Start to request and examine your personalised offers
Now you know roughly how much you need to borrow, what you can afford as a repayment and how long you’ll need to repay your loan. Next, you can start to plug these values directly into lender or comparison sites to get an estimate of your personalised interest rate and repayments. 

Experiment with different combinations, such as different loan terms or repayment amounts and match them against your needs. Need more help deciding? There are many third-party agencies (which don’t sell loans) that both rate and compare a broad range of loans.

Canstar is one of the most established financial comparison sites, and they’ve been comparing products without bias since 1992.

They release annual star ratings for a range of debt consolidation loans from many providers. To do this, Canstar comprehensively and rigorously examines a broad range of loans available across Australia.  To come up with an overall score, they award points for:

• Price — comparative pricing factoring in interest and fees
• Features — like the complexity of the application, the time involved before settlement, product management, customer service and loan closure

These are then aggregated and weighted to produce a total score. This means Canstar’s ratings are reputable and transparent, so you can trust the information they provide but still dig deeper if you want to. Other comparison sites can also be useful, however, you should always check around, as some may have a ‘sales’ element, that is, they may receive money for the people that visit their website en route to a particular lender.

So if the best rate isn’t being offered, it may not show up on their comparison. They also have ‘promoted’ or ‘featured’ loans, which they are paid to highlight, even if those loans don’t truly reflect the best value loans on the market. 

Another way to get information on your lender and loan is to read feedback from real, verified customers on ProductReview.com.au. You’ll be able to read customer reviews that rate the best debt comparison loan providers and explain what they liked best about their service. 

What questions should I ask to choose the best debt consolidation loan?

• What is the interest rate and the comparison rate?
• How do these rates compare to other loans?
• What are the fees and charges? (e.g. upfront, ongoing, early exit)
• What are the terms and conditions?
• Do the loan term and loan amount fit your unique needs?
• Can you definitely afford the repayments?
• Are you comfortable with the lender? Have you checked its reputation and accreditation?

Comparison rate

Comparison rates are a good starting point, but you still need to decide what will work best for you. The costs involved in securing the finance are a major factor, but once you’ve shortlisted a few loans that seem similar enough from that perspective, make time for these final checks:

• Are there flexible repayment options? Usually, you can choose between weekly, fortnightly or monthly repayments according to what suits your pay cycle. However, not all lenders offer this;  this may or may not matter to you
• Compare a loan’s conditions and fees around making extra repayments and paying the loan off before the end of the term. This can be a great way to reduce the overall cost of your loan, but not if you’ll incur extra penalties
• Can you use the funds for what you need the loan for? You can’t always use the borrowed money for whatever you like. Some lenders don’t allow you to take out a debt consolidation loan for business purposes. Most won’t allow you to pay debts overseas. Debt consolidation loans are usually extremely flexible, however, do make sure your plans match the lender's policies
• What are the options for managing the loan over time? Check and compare how easy the loan will be to manage

The processing of the repayments, changing your personal details, any refinancing requests you may want to explore down the track. The option to manage your account online is often available but not always, and some lenders have more functionality than others. Using direct debit for repayments is common, yet without it, monthly repayments will be much less convenient and you are more likely to be penalised for late payments if you aren’t perfectly disciplined.

By taking stock of your complete financial situation up front, you’ll be confident that you’re moving forward financially. You’ll be better able to compare the different debt consolidation loans on the market and be equipped to choose the one that is best suited to you.

A legal fee loan is a type of personal loan. While the pieces are the same, a legal fee loan works a little differently from what you might expect from a standard personal loan. Let’s look at the elements that make up a legal fee loan: 

Interest rate

Borrowing money helps you access the financial support you need, but it does come at a cost. Like most loans, legal fee loans need to be paid back with interest. The amount of interest you’ll pay on top of the amount you borrow is a percentage of what you owe. It’s usually measured as an annual rate and is called the Annual Percentage Rate (APR) or Advertised Rate.

And remember, the lowest interest rate doesn’t always mean the best loan for you. Be sure to consider the total cost of the loan including interest, fees and other costs to get a complete picture.

Repayments

This is where most personal loans and legal fee loans differ. With a standard personal loan, once you receive your loan, you need to start paying it back through regularly scheduled repayments, either weekly, fortnightly or monthly.

A legal fee loan is different. It’s secured against your forthcoming property settlement and it’s not expected that you will have the cash to start repaying the loan until you receive this settlement. So, rather than repay the loan in instalments, you repay it as a lump sum out of your share of the property settlement once it’s finalised.

You also only access the money when you need it. So if you don’t draw down your entire loan amount, you’ll only pay interest on the amount you actually accessed.

Loan amount

The loan amount is the amount of money you borrow, plus any fees and charges capitalised into the loan amount. It’s this amount that you’ll pay interest on. However, with a legal fee loan, you only draw down the money as you need it. So you only pay interest on the amount you access.

In Australia, legal fee loans usually range from $25,000-$400,000.

Loan term

When you take out a standard personal loan, you agree to the length of time it will take you to repay the loan. For personal loans, where you also commit to making regular repayments, lenders usually offer loan terms between 1 and 7 years.

With a legal fee loan, however, you’re only expected to repay the loan once your property settles. So the loan term for legal fee loans allows for this process to happen – typically up to 2 years. If your property doesn’t settle within the 2-year loan term, an extension may be available.

Upfront fees

Most loans also come with an upfront cost to set up the loan. Known as upfront, establishment or application fees, they can include:

• A flat fee (e.g. $499) that applies regardless of the value of the loan
• A tiered fee (e.g. $250, $500, $750) based on the value of the loan
• A percentage fee (e.g. 3%) based on the total amount borrowed and the credit or risk profile of the customer
• A hybrid fee (e.g. $200 + 2% of the loan amount)

It’s up to your lender what fees they choose to charge. But keep in mind, these upfront fees aren’t actually paid upfront – they’re usually capitalised to the loan balance, meaning you pay them back with the remainder of the loan. This increases your total loan amount, meaning you’ll be paying interest on those fees as well for the life of your loan. If it’s a small upfront fee, it might not make much of a difference. But if the fees are significant, they can add thousands to the total cost of your loan.

Monthly or ongoing fees

Most loans also come with a monthly cost. Also called ongoing, account-keeping or loan management fees. These fees don’t go towards paying back your loan. In general, the lower the fees, the better. But as always, you should consider the total cost of your loan including all interest payable and other charges when you compare loans.

With a legal fee loan, you’ll still be charged a monthly fee, but it will also be capitalised into the loan, so you pay it at settlement.

Brokerage fees

If you turn to a broker to help you find finance, remember that you’ll be paying for their service, whether you realise it or not. It’s important to factor in these costs when you’re comparing your finance options. For personal loans, the brokerage fee will typically be capitalised to the loan amount and is in addition to the lender’s own upfront fee. Sometimes brokers also have commission arrangements with lenders, either built into your interest rate or offered as a return based on your interest rate.

Penalty fees

Missed payment or ‘default’ fees are the most common penalty fee for personal loans. They’re a more relevant risk when you’re repaying your loan monthly, because one late payment can result in a fee. Late fees can vary from $10 to as much as $35 per default.

With a legal fee loan, you’re not required to make monthly repayments, so you’re at less risk of defaulting. If your settlement hasn’t come through by the end of your loan term, an extension might be possible.

Customer experience

When you’re making comparisons with other ways to finance your matter, there’s one more important question to answer: who will provide me the best experience? Look for a lender that makes it quick and easy to apply, get approved and manage your loan. These are good signs that a company values your experience, and that can go a long way to help you feel satisfied with your loan and trust that you’re getting a good deal.

How much does it cost?

To work out the overall cost of your legal finance, you need to factor in:

1. Loan Interest Rates: The biggest factor in how much a legal fee loan will cost you is the rate of interest you’ll pay on the amount borrowed. Legal fee loans can come with variable or fixed interest rates. If you are opting for a variable-rate loan, it is best to also calculate a worst-case scenario, one where a loan’s interest rates rise significantly in the future to be sure you have a comfortable buffer in the event things change. At Plenti, our legal fee loan interest rates are always variable. Interest is only paid on the amount outstanding, once a settlement is reached.   

2. Upfront Fees: ‘Establishment’ or application fees for all loans can vary greatly, so it’s an area where shopping around can make a difference. 

At Plenti, we have one upfront fee on our family law loans. The credit assistance fee is 4% on the amount of credit sought. This is a one-off fee capitalised to the loan at the time of the initial drawdown. This means you won’t actually pay the fee upfront, rather, it will be added to your repayments at the time of settlement. 

3. Ongoing Fees: These fees are charged throughout the life of the loan. Common ongoing fees include: 

• Monthly or annual fees (also called account keeping fees)
• Default, dishonour or missed payment fees
• Hidden fees in the terms and conditions of a loan 

At Plenti we never add hidden fees. We charge two types of ongoing fees for legal fee loans: 

• An $80 monthly fee
• A risk assurance charge, which is 5% on every dollar drawn down on the loan
• Some loans also require a security fee, if caveats are required for the security of the loan, these fees are $980 for caveats and $1300 for mortgages

Each of these fees is capitalised to the loan, so you only pay them once you begin making repayments.

To find the true cost of a loan, you can combine the costs of these fees with the interest rate of the loan. As long as you are comparing the same loan terms and amount, a comparison rate helps you to compare the cost of different loans. 

At Plenti, typical borrowers incur effective costs of about 11% p.a. 

Now that you understand the building blocks of a legal fee loan, you’ll be better able to decide which loan suits you. Planning and considering your situation upfront will help when comparing what green loan products are available that might really fit your needs, and offer the best value.

When you borrow money as a legal fee loan, you’ve got flexibility in how you use the funds – but you can’t use them for just anything.

Accessing high-quality legal advice

If you don’t have income to cover the cost of your family law matter, or your money is tied up in a property settlement, a legal fee loan helps you cover the cost of getting the advice you need, when you need it. 

Existing legal debts 

Because marriage breakdowns can be complicated, you may already have legal debts to handle. Legal fee loans can be used to pay outstanding fees, as well as for future legal costs. 

Matters handled outside of court

There’s no need to head to a courtroom to access funds through a legal fee loan. If you’re hoping to avoid litigation, legal fee loans can also be used for non-confrontational alternative dispute resolution (ADR) like mediation, arbitration and pre-action procedures. 

Assorted fees 

A legal fee loan also isn't just for legal fees – it can be used to cover a variety of costs associated with the legal process. These can include third-party costs like valuers and accountants valuing the asset pool, complicated structures and asset protection schemes.

Limited personal reasons

You might also be able to access a small amount of the overall loan for personal reasons. What are legal fee loans used for in everyday life? You can use them to:

• Improve your house prior to putting it on the market to increase the sale price
• Repay family members who have loaned you money
• Pay for advice on your new circumstances, such as from a financial planner
• Pay off a high-cost debt, such as a credit card or tax bill
• Tide you over while you’re waiting on a property settlement, helping you avoid interim applications and partial property orders

Legal loans exist to help clients level the legal playing field.

A relationship breakdown can be a challenging and confusing time to begin with – and worrying about how to pay for legal advice can make it even harder. With a legal loan, your clients can focus on finding the right advice, without worrying about how to pay for it upfront. 

A legal loan is a special type of personal loan designed to help your clients pay for family law matters. It can give them the funds you need to get the right advice from your lawyer and is repaid once a resolution is reached. Unlike a standard personal loan or a credit card, legal loans are specially designed to support your clients through this difficult stage. 

Financing for unique situations

When it comes to most other personal loans, your clients have to make choices about their loan type. Will it be secured or unsecured? Do they want a fixed or variable interest rate?

Legal loans work differently. They’re specifically designed to allow your clients to borrow what they need, when they need it. Unlike some other loans, they don’t need to draw down the full amount upfront. And they only need to repay the loan once they've received their property settlement. Plus, they only pay interest on what they use. 

It’s a form of asset-based lending, helping your clients unlock cash tied up in their assets by securing them against their loan. But that doesn’t mean they have to own real estate – other assets, like funds in trust, may be used in some circumstances.

What can the funds be used for?

If you’re wondering more specifically what a legal loan is for, the good news is, it isn’t just a loan for legal fees – it’s there to help cover all of the costs associated with the legal process.

That can include a wide range of associated third-party costs like:

• A barrister
• Valuers
• Accountants to investigate the total value of the asset pool, complicated structures and asset protection schemes 
• Non-confrontational alternative dispute resolution (ADR) like mediation, arbitration and pre-action procedures

Anything that is connected to the matter can be covered. It can also be used for personal reasons, such as paying for a financial planner or making home improvements prior to putting the property on the market. 

How much can my clients borrow?

With a legal loan, your clients can borrow between $25,000 and $400,000 – usually up to 30% of the expected property settlement. They won’t face any repayments until the division of your property is complete.

Any new or used electric or plugin hybrid electric vehicle qualifies for an EV loan. Find out which EVs and PHEVs are available in Australia here. <insert guide to EVs link here> 

Applying for an EV loan directly online is quicker and easier than you might think. And you might be surprised at how the value stacks up. 

Am I eligible?
EV loan application approval odds and how much you can borrow varies from loan to loan, and lender to lender. 

For starters, you will need to be:

• Over 18 years of age, and in some cases over 21
• An Australian citizen or permanent resident
• Earning at least $25,000 per year, from a regular, proven source of income (If you are self-employed you will have to provide additional information)
• The holder of a provisional or full driver’s licence

If you have existing loans or debt, there may be fewer options open to you. It’s also a good idea to check the eligibility criteria for any specific lender you are considering before submitting an official application to avoid any unnecessary negative impact to your credit score. Some lenders will have a higher salary threshold for borrowers, and make a point of only lending to those with a high credit score.

What exactly is the process?

Once you have shortlisted your preferred lenders, you can usually request a quote or rate estimate, including your estimated borrowing power, before you officially apply. This is a good idea, as this process won’t affect your credit score. 

Depending on the lender, if you want to proceed, you can apply online, over the phone or in-person if the lender has physical branches. You’ll usually need to verify your identity, connect the lender to your online banking so they can verify your income and expenses and potentially provide additional information based on your car loan purpose. For example, if you are applying for a secured loan, you’ll need to provide information about the exact car you are providing as security. 

If approved, you’ll then need to accept your loan agreement. The majority of car loan agreements can be signed and accepted electronically.

What documents will I need to apply?

To process your application, a lender will typically ask you to show:

• Proof of identification: an Australian driver’s licence or a passport
• Proof of address: copies of your recent utility bills
• Verification of a stable income: payslips, bank statements or tax returns
• Details of your expenses and liabilities: bank, credit card and loan statements

Plenti has a streamlined online application portal, where you can connect your bank details securely. That’s one of the ways we make applying for a loan simpler, faster and easier than ever. 

What will your lender consider?

• Your employment stability
• Your income (e.g. salary, rent, interest, etc.)
• Your expenses (e.g. mortgage, groceries, etc.)
• Your repayment history on other loans
• Credit agency/bureau information (credit report and score/rating)

These findings will determine if you’ll be approved, and if so then for how much you’ll be able to borrow. Often the interest rate offered will be lower if you have a good credit rating. If you’ve had problems paying your bills and debts in the past, you may only be offered a loan at higher rates.

What is my Credit Score?

Based on the information in your credit report, your credit score, or rating, is a single number that sums up how trustworthy you are as a borrower. Credit scores are typically on a scale of 0 – 1,200 or 0 – 1,000 depending on the credit agency. The higher your credit score, the more ‘reliable’ you are perceived to be and the greater the likelihood of your loan being approved, at a lower interest rate.

Now that the industry uses comprehensive credit reporting (CCR), credit reports are more detailed so that lenders have a better picture of both the positives and negatives. 

To calculate your credit score, credit agencies will assess:

• How much money you’ve borrowed in the past
• How much credit you currently have
• How many, and what type of credit applications, you’ve made (This can now include payday loans and buy-now-pay-later services such as AfterPay)
• Whether you usually pay your bills and loan repayments on time
• Any loan defaults
• Any court judgmentsInformation from your bank, telco, insurance and utility companies
• Your age, address and employment situation
• Up to two years of your general financial history

You can request your report and rating/score from credit rating agencies before you go through with a loan application. This does not usually impact your credit score. Be aware that because there are multiple credit agencies, the information your lender uses may not be exactly the same.

Get a free credit check from one of Australia’s major credit rating agencies: Equifax, Experian or Illion.

How do I improve my chances of getting approved?

Applying for a car loan has the potential to impact your credit score, particularly if your application is declined. Therefore, it’s important that you put your best foot forward before beginning the application process. We’ve assembled a useful selection of tips to help you submit a strong loan application.

Make sure you pay your existing debts on time. Did you know that repayments that are more than 14 days late may be recorded on your credit file? While less serious than a default, a series of late repayments can have an equally negative impact on your credit score. Making late repayments also sends a bad message to a prospective lender and may result in you paying higher interest rates.

If you do ever find yourself behind on your repayments, it’s important you contact your lender directly. Working with your lender toward a mutually beneficial outcome can help to protect your credit score. Remember, it’s far easier to protect a good credit score than it is to improve a weak one.

Only request as much as you need to borrow. When assessing your application, a lender will look at whether you can service a loan. Essentially, this evaluates whether, after all your expenses, you have income left over to meet the repayments of your proposed loan.

If you request an amount that is more than your finances say you are able to repay, it’s highly unlikely you will get approved. In some cases, a lender may offer you a longer car loan term to reduce your repayments, but it’s best to do your homework first. Use a repayment calculator and budget to figure out what you can reasonably afford.

Review your credit history. Australia has three main credit bureaus, Equifax, Illion, and Experian. You can request a free copy of your credit score once a year. Once you’ve verified your identity (i.e. with a driver’s license, passport etc.) the bureau is required to provide you with your credit report within 10 days. Your credit report will provide an overview of your credit history, including previous loans, existing debts, and your performance as a borrower.

You should ensure all the information contained in your credit report is accurate, and if not, contact the bureau to have it remedied. This will have a direct impact on your credit score. If you’re unsure of how to interpret your credit score, see this ASIC guide.

Pay down existing debts. Lenders may look unfavourably on an application for individuals with large amounts of debt, particularly if the debts are already at the limits of what you can afford. It’s important to demonstrate a concerted effort to repay your existing debts to a reasonable level.

This applies even if your personal loan is for the purpose of consolidating your debt. While a move to lower interest rates makes sense, it may be hard to get approved without opening up some additional capacity between your income and expenses.

Minimise your credit card balance. Using a credit card can be a great way to help boost your credit rating by demonstrating you are financially responsible. However, you need to manage your credit card carefully to ensure your balance is consistently low.

Failure to make repayments can have an equally negative impact on your credit score. Finally, lenders are now required to assess your application based on your credit card limits, not the outstanding balance. If you have unused cards or excess limits, look into reducing them before you apply for a new loan.

Within the advertised range, most lenders apply loan capping rules. This means they adjust the maximum loan amount you may be eligible for based on your credit score, income, mortgage status and a range of other factors. This maximum loan eligibility will usually be communicated to you when you get an initial quote or rate estimate from a lender.

Even once you have applied with a lender for a specific loan amount, they may come back to you with a ‘counter-offer’. A ‘counter-offer’ is a conditional approval based on a loan amount that is lower than the amount you’ve requested but one the lender believes you can afford and meets their responsible lending requirements. Whilst it may be tempting to borrow as much as you can, make sure your repayments will be realistic to make within your budget. This will be a significant factor in determining whether your loan will be approved.

At Plenti, we assess your loan application in line with our credit criteria and our responsible lending obligations. Whilst no guarantee, following the tips above will go a long way to improving the prospect of successful loan approval.

How long will it take to get approved?

At Plenti, once your car loan application is approved (and you have accepted your loan contract) your funds are transferred into your account the following business day. 

The funds will be transferred  into the same account that you have nominated for your direct debits.

A bad credit score can make it tough to get a personal loan, as lenders may view you as a ‘risky’ borrower. But don’t lose heart. Your credit score isn’t the only factor that lenders consider when deciding whether to approve you for a personal loan. 

Some lenders are willing to provide personal loans for people with bad credit scores as long as they feel sure you’re able to make repayments regularly without falling into financial difficulty. 

Plenti can tailor a personal loan solution to suit your circumstances, including competitive rates and flexible features, even without a good credit score.

Let’s look at what defines a bad credit score and the steps you can take to improve it. 

What is a credit score?

When you apply for a personal loan, you can expect the lender to check your credit history, current debt and income so they feel confident you can repay the loan. 

Your credit score is a number that sums up the information on your credit report. It tells the lender whether or not you are a trustworthy borrower. 

Around 50 major Australian lenders, including Plenti, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history. 

This is a good thing. It means you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

What is a bad credit score?

A bad credit score can make it hard to obtain a personal loan with a competitive interest rate and may also limit the amount you can borrow. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

According to this credit score table from credit bureau Equifax, a bad credit score ranges from 0 – 509. A score within this range places you in the bottom 20% of Equifax’s credit-active population.  

• Excellent: 833 – 1,200
• Very good: 726 – 832
  
• Good: 622 – 725
  
• Average: 510 – 621
  
• Below average to average: 0 – 509
  

If you’re a young student, just beginning your first full-time job, or returning from a long stint overseas, chances are you have limited or no credit history at all. In this case, it’s worth taking the time to build up a positive score so that you can more easily borrow money in the future. 

Simply by paying your bills on time, such as mobile phone plans and electricity, you will start to build a positive financial report. Think about setting up direct debit payments for these bills so that you always pay on time. 

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. Checking your credit report will NOT impact your credit score. 

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

There’s no doubt about it, having a positive credit report makes it much easier to get approved for a personal loan. The good news is it’s easy to build and polish your credit history and you don’t need to take out a credit card to do it. 

Consider lowering your credit card limit and try to pay more than the minimum repayment. Remember, applying for multiple loans over a short period of time can look bad on your credit report. Reducing the number of applications you make for credit will improve your credit score over time. 

Avoid late payments on your bills, including mobile phone plans and Afterpay. Setting up direct debit payments for these bills will mean you always pay on time and will begin to create a more positive credit history. 

The amount of time it takes for negative incidents to be erased from your credit report depends on the type of credit event that occurred.  

How much can I borrow if I have bad credit? 

Just as everyone is different, every personal loan is also different. The amount you can borrow will depend on your individual life circumstances, including your income, expenses and other debts. 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. 

Remember, every time you apply for credit (including credit cards, personal loans and personal loans) it affects your credit score. Find out which lenders are likely to approve your loan before you submit an application to prevent a black mark on your credit report. You can do this by contacting the lender to make an initial enquiry, rather than submitting a full application. 

When considering your application, lenders will take into account:

• Credit history
• Income
  
• Other debts
  
• Every-day expenses
  
• Loan amount
  

Will my personal loan be secured or unsecured?

Even if you have a bad credit score, the lender may agree to offer you a secured personal loan. This type of loan is usually secured against an asset of value. This means if you can’t make repayments, the lender can take the asset and sell it to recover the cost of the loan. 

An unsecured personal loan, on the other hand, does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. Keep in mind, even if you are approved for an unsecured personal loan, there is always the possibility of the lender taking you to court if you default on the loan. In this situation, your credit rating would be negatively impacted. 

Which lenders offer personal loans to borrowers with bad credit?

Peer-to-peer lenders

When you’re researching personal  loans, it pays to look beyond the ‘Big Four’ banks. Online lending platforms, also known as peer-to-peer lenders, often provide a faster approval process and lower interest rates than traditional lenders. 

This type of lender, also known as ‘peer-to-peer’ lending or marketplace lending, allows you to seek a loan from a private lender. All P2P lenders set their own loan requirements and terms. 

If you have a bad credit score, it’s possible that your personal loan will come with higher interest rates and fees, so it’s a good idea to check the comparison rates of various lenders to make sure you find the best loan option to suit your needs. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on personal loans quickly and easily, including loans offered by P2P lenders. 

Banks and credit unions 

Some banks and credit unions may approve personal loans for people with bad credit scores, but only if they meet their additional strict criteria. 

Specialist bad credit lenders

Some lenders offer loans designed specifically for borrowers with bad credit. But it’s important to be aware of the loan features listed in the terms and conditions. Often, these types of loans come with high interest rates and fees to offset the risk to the lender. Make sure you can afford the total cost of the loan before you sign on the dotted line. 

Guarantor personal loan 

Having a family member or friend with good financial status and credit history act as a guarantor application could improve your chances of being approved for a personal loan if you have no credit score yourself. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Need a helping hand?

When you fall into financial hardship, it can be hard to see the wood for the trees. Remember, you’re not alone. You can seek help from qualified professionals free of charge through the National Debt Helpline (NDH). Call 1800 007 007 to find a counsellor near you.

Are you one of the growing number of Australians who are self-employed or work as a contractor? If you’re looking for a personal loan, you might have to jump through a few more hoops. But don’t lose heart. Even without a history of stable employment, there are many options to help you move forward, faster.

Before you apply for a personal loan, ask yourself these questions:

• Can you show evidence of a stable income for the past two years?
• Does your income exceed the minimum income criteria? To be eligible for a Plenti personal loan, you must be able to prove that you earn over $25,000 per year.
  
• Can you provide proof of savings? If lenders can see that you’re capable of setting aside money for loan repayments, they’re more likely to view you as a trustworthy borrower.
  

Improve your chances

If you’re able to show evidence of a stable income over the past two years, your potential lender will then examine your credit score, savings, expenses and other debts to determine whether you have the ability to make repayments. Check out these 3 things you can do to improve your chances of qualifying for a personal loan:

• Select a less expensive purchase so you can borrow a smaller amount
• Save for a deposit so you can borrow a smaller amount
  
• Check and improve your credit score
  

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you’re a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you buy. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit 
  

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

Know your Plan B

If you’re not approved for a personal loan, there are other options available. You could apply for a secured loan. With a secured personal loan, the lender uses the item that you purchase, or something you already own, as security against the loan. This means if you cannot make repayments down the track, the lender can repossess this property to cover the costs of the loan. 

Alternatively, you could apply for a guarantor personal loan, where you have a family member or friend co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Having a guarantor on your personal loan might improve your chances of being approved because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might also be able to secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan.

Low doc personal loan

If you don’t earn a regular income or you know you’ll find it tough to produce documents proving two years’ worth of stable income, a low doc personal loan could be a good option for you.

As the name suggests, lenders who offer low doc personal loans ask for less documentation than is usually required. The downside? Low doc personal loans often come with higher interest rates because they are considered riskier for the lender.

Before applying, it’s a good idea to use a personal loan calculator to find out how much you’d be expected to repay each month and how much you can reasonably afford to borrow.

Do you qualify?

Tick off the list to see if you meet the criteria for a low doc personal loan:

• Australian permanent resident (some visa holders are also permitted)
• Over the age of 18
  
• Earn at least $25,000 per year
  
• Hold a valid driver licence (provisional or full)
  
• Hold an ABN if self-employed
  

Considerations

When you’re comparing low doc personal loans, make sure you understand the loan features, including:

• Interest rates: Is the rate fixed or variable?
• Hidden fees: Does the loan have upfront and ongoing service fees, or charges for making additional repayments down the track? 
  
• The loan amount and terms: Personal loans generally range from $3000 to $100,000, to be prepaid over a period of one to seven years. 
  
• Loan restrictions: Low doc loans often have stricter lending criteria. For example, you may not be allowed to make additional repayments to repay the loan more quickly. Make sure the loan offers the flexibility to suit your situation. 
  

Are you one of the growing number of Australians who are self-employed or work as a contractor? If you’re looking for a personal loan, you might have to jump through a few more hoops. But don’t lose heart. Even without a history of stable employment, there are many options to help you make your big idea come to life, faster.

Before you apply for a personal loan, ask yourself these questions:

• Can you show evidence of a stable income for the past two years?
• Does your income exceed the minimum income criteria? To be eligible for a Plenti personal loan, you must be able to prove that you earn over $25,000 per year.
• Can you provide proof of savings? If lenders can see that you’re capable of setting aside money for loan repayments, they’re more likely to view you as a trustworthy borrower.

Improve your chances

If you’re able to show evidence of a stable income over the past two years, your potential lender will then examine your credit score, savings, expenses and other debts to determine whether you have the ability to make repayments. Check out these 3 things you can do to improve your chances of qualifying for a personal loan:

• Select a less expensive purchase so you can borrow a smaller amount
• Save for a deposit so you can borrow a smaller amount
  
• Check and improve your credit score

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you’re a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you buy. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit 
  

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

Know your Plan B

If you’re not approved for a personal loan, there are other options available. You could apply for a secured personal loan. With a secured personal loan, the lender uses something that you purchase, or another item, as security against the loan. This means if you cannot make repayments down the track, the lender can repossess the item to cover the costs of the loan.

Alternatively, you could apply for a guarantor personal loan, where you have a family member or friend co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Having a guarantor on your personal loan might improve your chances of being approved because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds.

You might also be able to secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan.

Low doc personal loan

If you don’t earn a regular income or you know you’ll find it tough to produce documents proving two years’ worth of stable income, a low doc personal loan could be a good option for you.

As the name suggests, lenders who offer low doc personal loans ask for less documentation than is usually required. The downside? Low doc personal loans often come with higher interest rates because they are considered riskier for the lender.

Before applying, it’s a good idea to use a personal loan calculator to find out how much you’d be expected to repay each month and how much you can reasonably afford to borrow.

Do you qualify?

Tick off the list to see if you meet the criteria for a low doc personal loan:

• Australian permanent resident (some visa holders are also permitted)
• Over the age of 18
  
• Earn at least $25,000 per year
  
• Hold a valid driver licence (provisional or full)
• Hold an ABN if self-employed

Considerations

When you’re comparing low doc personal loans, make sure you understand the loan features, including:

• Interest rates: Is the rate fixed or variable?
• Hidden fees: Does the loan have upfront and ongoing service fees, or charges for making additional repayments down the track? 
  
• The loan amount and terms: Personal loans generally range from $3000 to $100,000, to be prepaid over a period of one to seven years. 
  
• Loan restrictions: Low doc loans often have stricter lending criteria. For example, you may not be allowed to make additional repayments to repay the loan more quickly. Make sure the loan offers the flexibility to suit your situation. 
  

Obtaining a personal loan when you’re unemployed might feel like a pipe dream. You might be wondering whether there are lenders out there willing to take a chance on you. The good news is your chances of securing a personal loan could be higher than you think.

Read on to find out how to get finance for a personal project, even without a job.

Centrelink payments as income

Some lenders may offer you a secured personal loan even if your only source of income is Centrelink payments. Regular, ongoing Centrelink payments such as the Age Pension, Carer Payment, Veteran Payment, Family Tax Benefit, Rent Assistance and payments from the National Disability Insurance Scheme (NDIS) may be viewed as regular income.

Usually, lenders require you to reach a certain minimum income before they will consider approving a personal loan. If your Centrelink payments reach this minimum amount, some lenders will offer a secured personal loan, if they are convinced you will have the ability to make the repayments without falling into financial difficulty.

A ‘secured’ personal loan means you will need to offer an asset as security against your loan, such as a home, jewellery, valuable art or significant assets saved in the bank or in investment accounts. This means if you are unable to repay the personal loan down the track, the lender could repossess your asset to cover the costs of the loan.

Know the score 

If you tick the box for regular Centrelink payments, the next step is to find out your credit score. Lenders will always check your credit history to see whether you have a history of repaying your debts on time. This helps them decide whether you are a trustworthy borrower.

Your credit report has a huge say in whether you’ll be approved for a personal loan and how much you’ll be able to borrow. It also impacts the interest rate you’ll be offered and other loan features. 

Your credit score is a number that sums up the information on your credit report. It takes into account things like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

Check out this credit score table from Equifax so you know where you stand:

• Excellent: 833 – 1,200
  
• Very good: 726 – 832
  
• Good: 622 – 725
  
• Average: 510 – 621
  
• Below average to average: 0 – 509

If your credit score is over 600, chances are you will be able to secure a car loan interest rate between 5% - 10% per annum. Scores below 510 are likely to attract a higher rate. 

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency. 

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

You can also obtain your credit report through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Give it a polish!

It makes sense to work on your credit health consistently so that you can apply for personal loans with confidence. 

There are ways to clean up your credit report and increase your credit score to improve your chances of being approved:

• Pay your rent, mortgage and utility bills on time
• Make credit card repayments on time and try to pay more than the minimum repayment
  
• Lower your credit card limit
  
• Limit how many applications you make for credit 

All of these things will help your credit score to improve over time. 

Save a deposit

Keep in mind that if you don’t have a job, you will need to save up for a larger deposit than if you were employed. You might be asked for a deposit of around 30% of the purchase price or even higher – but every lender is different so it’s important to shop around. 

Find a guarantor 

Having a family member or friend with good financial status and credit history act as a guarantor on your personal loan application could improve your chances of being approved if you are unemployed. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Before you take this step, make sure you can afford the monthly repayments in addition to your other bills. Are you sure your income and expenses will remain the same throughout the whole term of the loan? If your circumstances change, could you still afford this additional debt?

Do the number-crunch 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website . Once you have a particular personal loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees. 

You might need to jump through a few extra hoops to obtain a personal loan when you’re unemployed. But it’s not impossible. Talking to a personal loan broker may speed up the process, as they will do the legwork to find a loan product that best suits your needs.

There’s no doubt about it. Juggling studies, work and the responsibilities of life can be tough. For many students who can’t afford to purchase something they need to move forward up front, a personal loan is a great solution. 

The good news is that online lenders, banks and credit unions all have loans available to students.

Tick the box

To qualify for a student personal loan, you must meet the following requirements:

• Age: You need to be over 18 to apply for a student personal loan. Some lenders will limit your loan amount if you are aged between 18 – 21 but this depends on your income and credit score. 
• Residency: Most lenders will only offer personal loans to student applicants that are citizens of Australia or Permanent Residents. However, some lenders will accept temporary visa holders. 
• Income: As a student, you don’t need to have a very high income to qualify for a personal loan. But you’ll need to show that you have stable casual or part-time work bringing in a regular income. Keep in mind, many lenders do not accept Newstart, Austudy or Youth Allowance as sources of income. 
  

Before you start

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Once you have a particular personal loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees
  

Know the score 

When you apply for a personal loan, you can expect the lender to check your credit history, current debt and income so they feel confident you can repay the loan. 

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you are a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you buy. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit 

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate.

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency.

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

You can also obtain your credit report through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Guaranteed security

Having a family member or friend with good financial status and credit history act as a guarantor application could improve your chances of being approved for a student car loan. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan.

To be eligible for our Zero Interest Repayment Plan your customer must:

• Be over 18 years old
• Be an Australian citizen or permanent resident
• Have a valid driver licence, Medicare Card or Australian Passport
• Own (or be purchasing) their own home
• Have a clear credit file
• Be employed >25 hours a week, a self-funded retiree or receiving a government pension

Further eligibility requirements may apply. In some cases we may require the customer's bank statement and latest electricity bill.

Let’s talk about monthly fees, also known as ongoing fees, loan management fees or administration fees. 

A monthly fee on your renovation loan covers the cost of maintaining your loan and is charged on a regular basis. This monthly fee amount does not go towards repaying your loan principal. 

Let’s do the maths

Even a small monthly fee of $10 adds up to $600 over 5 years, so it pays to consider all charges when comparing lenders. 

Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and monthly fee into one percentage figure. In Australia, lenders are required to show a comparison rate when they advertise an interest rate.

It’s a good idea to check the comparison rate to better understand the loan’s true cost and then compare them to identify the best lender. 

After you refer your client, they'll want to gather all required documents and information in advance.  

If they're applying for a Plenti legal fee loan, they'll need to be working with a Plenti-accredited lawyer. If they are working with a lawyer who isn’t accredited with us yet, they'll need to ensure they get in touch with us to do so before we can approve your loan. 

Before you refer your client make sure you have reviewed our eligibility criteria. To qualify for a legal fee loan:

• Your client must be involved with a family law matter
• There must be a property settlement component and a clear entitlement to some property division under the Family Law Act
• They must be able to provide some form of security against the loan (this is usually via caveat over real property – whether on title or not – but we may consider other forms of security)
• They must be an Australian resident, with the majority of your assets in Australia

In addition, before a legal fee loan is approved, the matter should have progressed to a point where the main issues in dispute are known and the pool is well established.  Regardless of the size of the loan, it is also important to be able to demonstrate how the loan will be repaid at settlement - i.e. by cash received, selling assets or by a refinance. 

Your client will need the following documents to get started: 

• A balance sheet outlining both side’s view of the pool (where available)
• Current mortgage statement for all properties (where available)
• Title searches for all properties (where available)
• Appraisals for all properties (where available)
• Business valuations (where available)

We will be awarding five prizes to the individuals that settle the most loans in New South Wales, Victoria, Queensland, South Australia and Western Australia. Each of the winners in this category will receive a Plenti prize pack worth $795 including:  

• Plenti trophy
• $150 worth of merch
• 5 x cases of Plenti beer

They will also win $2,000 each to spend on our prize list packed with exciting experiences and gifts that features something for everyone.   

Brokers at Plenti have four main points of contact they can reach out to if they need assistance with anything.

Business Development Managers

Your BDMs is there to help and assist you with anything you may need. Reaching out via a phone call is the quickest way to get in touch – you may also send an email. Contact information for BDMs can be found here.

Relationship Managers

Like BDMs, your RM is also there to support you and assist in answering any questions you may have. Phone calls are the best way to get in touch, but their inboxes are also open for emails. Contact information for RMs can be found here.

Broker Support

For any general enquiries, you can reach out to Broker Support via phone at 1300 889 332 or email at brokers@plenti.com.au. 

Live Chat

Plenti also supports a Live Chat function within the Broker Portal – once you gain access to the portal, you can chat with Broker Support live.

You sure can! Anyone over the age of 18 can apply for a personal loan as long as you have a steady income and can make repayments without falling into financial difficulty.

Your income may come from investments, assets or even government benefits, such as the Age Pension, Disability Pension or Veteran Payment. But keep in mind, your personal loan options could be more limited than someone who is employed full-time.

It’s a good idea to find out if you’re eligible for a loan before you apply. That way, your credit report won’t be negatively impacted and you’ll avoid paying multiple application fees.

Will I be approved?

Before agreeing to finance your loan, a lender will examine your income, savings, assets and expenses to determine whether you’ll be able to repay the loan amount, plus interest, without falling into financial difficulty. They will take into account your:

• Income received from pension payments and other government benefits
• Credit history
•  Assets, including your home and savings
  
• Residency status – you will need to be an Australian citizen or permanent resident

A lender will compare your income with the personal loan repayment amounts, to ensure you can easily meet your loan obligations. 

Play the odds

Here are 5 ways to improve your chances of having a personal loan approved:

1. Make sure your income is high enough to easily meet the repayments for the loan you want.
2. Save for a deposit or look at a more economical option so you can borrow a smaller amount.
3.  Make sure there’s no history of late payments on your bills (the occasional lapse is OK).
   
4. Use an asset as collateral. Using an asset as security against the loan, reduces the risk to the lender as they can use the asset to recover the cost of the loan if you are unable to make repayments down the track. It may also mean you can secure a lower interest rate on your personal loan.
   
5. Have a family member or friend with good financial status and credit history act as a guarantor on your personal loan. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 
   

Number crunch! 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. 

When comparing loan rates, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees
  

When comparing rates between lenders, be sure to check out the comparison rates. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

In Australia, lenders are required to show a comparison rate as an annual percentage when they advertise an interest rate. It’s a helpful tool when researching the cost of the loan. Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on personal loans quickly and easily.

Next steps 

Once you’ve made a short list of the best loan deals, be sure to read the Product Disclaimer Statement (PDS) which explains all the fees and loan features in detail. 

Remember, the best personal loans aren’t just about what’s written down in black and white. It’s worth checking customer service ratings and reviews to find a personal loan provider with a friendly, helpful and responsive team. Good customer service can make a big difference to your overall experience. 

Once you’ve decided on the best personal loan for you, contact the provider. Don’t be afraid to ask them as many questions as you need to, until you feel satisfied that you’re ready to commit.

You sure can! Many lenders are willing to offer personal loans to low-income earners. You might just need to look beyond the big four banks. 

At Plenti, we understand that many low-income earners are looking for a loan to move forward and take advantage of opportunities that arise. There are many ways a personal loan can be the right move, without breaking the budget.

How will I be assessed?

When you apply for a personal loan, the lender will review the following details to make a decision about how much they’re willing to lend you and the rate of interest:

• Bank statements
• Employment status
  
• Credit report 
  

Let’s look at each of these in detail.

Bank statements 

When you apply for a personal loan as a low-income earner, you may need to provide bank statements to show your spending habits, savings and regular expenses. If you can show that you pay credit card debts regularly and use your money responsibly, the lender is more likely to view you as a trustworthy borrower.

But don’t panic if you’ve overdrawn on your accounts in the past. Small, occasional lapses won’t impact your chances of being approved for a personal loan.

Does your spouse or partner contribute to your daily expenses? If so, this will help your chances of being approved for a personal loan and may increase the amount you can borrow. You’ll need to provide evidence of your partner’s income through bank statements or pay slips. Alternatively, you could choose to make your partner a joint borrower. This means your incomes will be combined, giving you greater borrowing power.

But remember, you’ll both be equally responsible for repaying the loan. If one of you cannot contribute to repayments down the track, the other will need to take responsibility for making full repayments.

Employment status

If you’re a low-income earner applying for a personal loan, chances are you work as a casual, part-time, or are self-employed. No two loans are the same and each lender has different requirements for employment. Many lenders will ask you to show pay slips or a letter from your employer to prove you’ve been working full time, casually or part-time for a number of months. If you’re a contractor, sole trader or freelancer, you’ll probably be asked to show evidence of income for the past 6 months to 1 year. 

To be eligible for a Plenti personal loan, you must earn over $25,000 per year from a provable, regular source of income.

Keep in mind, many lenders will include government benefits as an income. This means everything from Carers Benefit, Family Tax Benefits, Aged Pension, Disability Support Pension and Partnered Parenting Payment could be considered part of your regular income. Check with your lender when you apply for the personal loan to find out if government benefits will be accepted.

Credit Report 

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you are a trustworthy borrower. 

If you have a low credit score, it could hurt your chances of being approved for a personal loan, so it may be worth working on improving your score before you apply. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit 
  

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a personal loan and securing a competitive interest rate. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

Check out this credit score table from Equifax so you know where you stand:

• Excellent: 833 – 1,200
• Very good: 726 – 832
  
• Good: 622 – 725
  
• Average: 510 – 621
• Below average to average: 0 – 509

If your credit score is over 600, chances are you will be able to secure a personal loan interest rate between 5% - 10% per annum. Scores below 510 are likely to attract a higher rate. 

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency. 

Comprehensive credit reporting

Around 50 major Australian lenders, including Plenti, use ‘comprehensive credit reporting’. This means both negative and positive information is included in your report, painting a clearer picture of your credit history.

This is a good thing. It means you’re less likely to be held back by one or two negative slip-ups from the past because the lenders will see a more balanced story of your borrowing history, including all the times you DID make payments on time!

Comprehensive credit reporting is mandatory for all lenders by 1 July, 2021.

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:\

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

If you’re shopping for a car loan, you might be wondering how you’ll go about making repayments. It’s worth taking the time to understand how repayments work so that you can plan and budget accordingly.

Loan payments are usually arranged directly with the lender. Keep in mind, there’s no one-size-fits-all and lenders may use different guidelines to create repayment schedules.

When you apply for a car loan, you’ll need to agree to certain features including the:

·       Length of the loan

·       Interest rate

·       Set payment amount: this will include principal and interest.

·       Payment schedule: this could be weekly, bi-weekly, semi-monthly or monthly. You may want to consider making your repayments coincide with your pay date, so you know you’ll always have the funds available.

The most common way to make repayments on your car loan is through a pre-authorised direct debit from your chosen bank account.

Direct bank debit

A direct bank debit allows your lender to withdraw your car payment on a set schedule. It’s easy to arrange - you simply fill in a direct debit request form and returning it along with certain documents, such as proof of your bank account details. This is usually done at the time you set up your car loan.

Paying by direct debit happens automatically, taking the stress out of making repayments. But remember, it’s your responsibility to make sure you have enough funds available in your bank account to be drawn on the due date. If you don’t have sufficient funds for the repayments, you could be charged dishonour fees by your bank or late payment fees by your lender.

Internet payments

Many lenders will allow you to make regular payments on their website via internet banking. You simply go to your lender’s website, log into your account and complete the payment with your preferred bank account. If you choose to make your repayments this way, you will need to make sure you pay on or before your due date each time.

Can I make repayments in advance?

Some lenders will charge a fee if you make early repayments. The same goes for paying your car loan off early. This is because your lender will lose out on interest payments if you finish the loan early.

However, there are lenders who offer the flexibility to pay your loan early and even redraw from the loan to fund other purchases.

Here at Plenti, we don’t believe in penalising you for your stellar efforts. Find yourself able to pay us back early? Nicely done! You’ll pay less interest and there are no fees or penalties for paying your loan back early. 

Choosing your new set of wheels is a big deal. We get it. You want to make sure you select a make and model that suits your lifestyle. You want to feel good behind the wheel. You want to enjoy the ride.

The process of selecting a car loan is equally important. You’ll need to consider a variety of factors to make sure the loan you apply for is the right one for you. One of the biggest decisions you’ll need to make is whether to apply for a secured or unsecured car loan. 

Secured car loan

With a secured car loan, your lender uses your new car as security against the loan (also known as collateral). This means that if you are unable to meet your repayments down the track, your lender can repossess your car and sell it to cover the cost of the loan. Think of it as a security blanket for your lender.

A secured car loan is appropriate for newer vehicle models (usually less than 5 years old) since they are more valuable as an asset. Any asset used as collateral needs to be of equal or greater value to the car loan.

A secured car loan usually comes with a lower interest rate. This means you could potentially borrow a larger amount or pay it back over a longer period.

Unsecured car loan

If you only want to borrow a small amount for a new or older vehicle, and you meet the loan requirements, you may wish to apply for an unsecured loan. With an unsecured loan, you are not required to provide an asset to secure the loan. This means your car (or other valuable asset) is not in the firing line if you are unable to make repayments down the track. It also means you can choose between a fixed and variable interest rate.

But keep in mind, if you default on your loan, the lender may take you to court to recoup the cost of the loan and it will negatively impact your credit report. Unsecured car loans generally come with a higher interest rate because lenders view them as a riskier proposition, and you may not be able to borrow as much as you could with a secured car loan.  

The good news is that Plenti offers flexible loan terms on unsecured loans. That way, you can choose between fixed repayments or the flexibility of variable repayments, depending on your current circumstances.

Which loan type is right for me?

If the car you have in mind is less than 7 years old and valued at $10,000 or more, a secured car loan is probably the best option. This type of loan comes with a fixed interest rate so your repayments will stay the same over the life of the loan, making it easy to factor them into your budget.

A secured loan comes with a lower interest rate and allows you to borrow more money than an unsecured loan. This is because your new car will be used as security against the loan, so it’s less risky for your lender. If you fail to make repayments down the track, your lender can simply take back the car and sell it to cover the costs of the loan.

At Plenti, secured car loans are available from $10,000 to $100,000 for a new, demo or used car under 7 years old with fixed interest rates.

You’ll need to tick a few boxes before you are approved for a secured car loan, including:

• Informing your lender of your new vehicles chassis number, vehicle identification number (VIN), registration number, model & make, year, and colour
• Providing the lender with a copy of your car registration papers
  
• Getting a vehicle inspection (if through a private sale)
  
• Purchasing a comprehensive car insurance policy and having the lender added as an interested party
  

Alternatively, if you have your eye on an older vehicle, or a car worth less than $10,000, you might prefer an unsecured car loan. With an unsecured car loan, you have the flexibility to choose between a fixed and variable interest rate. While a fixed rate offers the security of always knowing how much your repayments will be, a variable rate rises and falls with the market interest rate as it responds to current economic conditions. This means you could end up paying more or less for your loan, depending on the market rate. 

At Plenti, unsecured car loans are available from $2,001 to $45,000 for a car of any age.

When it comes to choosing which loan type is right for you, ask yourself:

• Informing your lender of your new vehicles chassis number, vehicle identification number (VIN), registration number, model & make, year, and colour
• Providing the lender with a copy of your car registration papers
  
• Getting a vehicle inspection (if through a private sale)
  
• Purchasing a comprehensive car insurance policy and having the lender added as an interested party
  

It’s worth taking a minute to request a RateEstimate to find out if you’re eligible to apply for a loan with Plenti. It will also provide you with an estimate of the fees, charges and interest rate that may apply to your loan.

If you’re happy with your rate estimate, we’ll typically finalise successful loans within a day or two of receiving your complete application. You could be hitting the road faster than you think!  

Remember, requesting a free RateEstimate only takes 1 minute. It won’t impact your credit score and there’s absolutely no obligation for you to proceed with a loan application. 

Paying off your renovation loan early is a commendable goal. The sooner you’re out of debt, the better, right?

Well, maybe.

Some lenders will sting you with an early repayment fee if you manage to pay your renovation loan off ahead of schedule. Early repayment fees can range from $0 -$800.

The whole story.

It might seem rough that you’re charged for your financial diligence, but there is a method in the madness. Early repayment fees are designed to cover the lender’s loss incurred if you end your loan early.

To fully understand why these fees are sometimes imposed, it helps to know the backstory of your loan (cue flashback music): 

1.  Your renovation loan is approved

2.  Your lender borrows money in order to provide your loan

3.  Your lender uses the interest you pay on YOUR loan in order to make payments on THEIR loan

4.  You choose to repay your loan early

5.  Your lender charges an early repayment fee to cover their losses caused by the interest you will no longer be paying

To fee or not to fee?

That’s a good question! It’s worth doing the sums to figure out whether you’re better off suffering the dreaded early repayment fee in order to finish your loan early. You may still be ahead of the game by reducing the amount of interest you’ll pay over the long term.

The fee is usually calculated by looking at the remaining loan balance and loan term. For example, fixed rate renovation loans often charge an “economic cost” or “fixed cost” for repaying a loan earlier than expected.

If you’re feeling unsure, call your lender to discuss the early repayment fee so that you know exactly how much you’ll be expected to pay.

The good news.

This is one fee you can avoid.

Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your financial diligence.

At Plenti, we believe in tailoring renovation loans to suit your unique financial situation and lifestyle. This means rewarding your strong credit history with attractive rates that are personalised to you and offering the flexibility to pay it back faster. In fact, we’ll never charge you fees or penalties for paying your loan back early.

This means you can increase your scheduled monthly repayment, make an extra payment, or pay off the loan in full at any time without being stung for extra charges.

It’s your life – you’re in control. 

Need a little top up?

When you refinance your renovation loan, it means you take out a new loan to repay the existing loan.

Refinancing your renovation loan can be a great way to reach your financial goals faster. If you find a better deal with a lower interest rate or you wish to consolidate multiple debts, refinancing can work to your advantage.

Why refinance?

The two main reasons people choose to refinance their renovation loan is to take advantage of a lower interest rate or to consolidate debts. Rolling together outstanding credit cards and other renovation loans into one simple repayment each month makes your budget easier to manage. And by locking in a more competitive interest rate, you could clear your debt faster while saving money!

Everything in moderation

So, why not refinance every time a better deal comes along? It might sound like a good idea, but refinancing multiple times will impact your credit score.

The aim of the game is to keep your credit score as high as possible so that you’re more likely to be approved when you apply for a loan. When you take out a loan of any kind, your credit score decreases slightly. This is okay, as long as you make repayments on time and pay back the loan by the due date.

However, repeated applications for a loan within a short time frame could harm your credit score, making it more difficult to obtain a loan in the future.

But remember, refinancing a renovation loan is always better than defaulting! If refinancing a loan helps you stick with your repayment schedule, you might even improve your credit score in the process.

Are you eligible to refinance?

Tick the boxes before you start! To refinance your renovation loan, make sure:

• You are aged 21 or over
• You are an Australian citizen or permanent resident
  
• You have a regular source of income that you can demonstrate
  
• You have a good credit history
  

To see if you qualify for a Plenti renovation loan, you can get a RateEstimate. It only takes 1 minute and won’t affect your credit score. We will simply ask you a few questions so we can calculate an initial estimate of your borrowing potential, along with the rates, fees and charges that may apply to your loan.

Before you refinance

Spend a little time doing your homework before you take the plunge:

1. Check your credit rating. You can do this online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

2. Check the comparison rates of various loans to find the most competitive option.

3. Calculate the cost of an early repayment fee (if there is one) on your existing loan and establishment/upfront fees on your new loan.

4.   To see if you qualify for a Plenti renovation loan, you can get a RateEstimate. It only takes 1 minute and won’t affect your credit score. We will simply ask you a few questions so we can calculate an initial estimate of your borrowing potential, along with the rates, fees and charges that may apply to your loan.

What will it cost?

If you’re looking to refinance, you’re probably seeking a loan with the lowest interest rate. But what about those hidden costs that can catch you off-guard? Shopping around for a renovation loan with fewer fees can save you thousands in the long run.

Here are some of the extra charges that could apply to your new loan:

·   Establishment/upfront fee: You could be charged a fee when you apply for a renovation loan to cover the cost of assessing your application and preparing loan documents.

·   Service fee: Monthly account keeping fees add up over time. It’s worth calculating the total cost for the life of the loan so you’re not caught by surprise.

·   Late payment fee: Your lender may charge a fee if you default on your loan or miss a payment.

·   Early repayment fee: Do you hope to pay your loan off sooner? Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.

·   Other fees: Check out the terms and conditions of your loan for a full list of fees and charges.

Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. This means the comparison rate will be higher than the interest rate charged on the loan. In Australia, lenders are required to show a comparison rate when they advertise an interest rate. 

It’s a helpful tool when researching the cost of the loan. It allows you to compare loans to find the perfect one for you. But remember, a comparison rate doesn’t include early repayment fees, late repayment fees or deferred establishment fees.

Refer to the terms and conditions of your loan if you’re unsure about these extra charges.

Refinancing is as easy as 1, 2, 3

1.  Get your rate: Discover your personalised interest rate in just 1 minute. It’s fast, simple and won’t have any impact on your credit score.

2.  Apply in 10 minutes: Make sure you have your driver’s license or passport, an address verification document (like an electricity bill), bank details and existing loan documents handy. You will be asked to verify your income and expenses and may be asked for bank statements or payslips.

3.  Enjoy your funds: Once your loan is approved your funds will be with you the next business day.

What do I need to apply?

Refinancing your existing renovation loan is easy.

First, to verify your identification, we’ll ask to see one or more of these documents:

·   Australian state or Territory-issued driver’s license

·   Australian or foreign passport

·   A document proving your address, such as an electricity bill

Next, we need to assess whether the loan you’re applying for suits your current life circumstances. To do this, we’ll look at your:

·   Employment stability

·   Income

·   Expenses

·   Repayment history

·   Credit rating

We will ask for bank statements and/or payslips to verify your income and expenses.

Lastly, you will need to provide the following documents to verify your existing loan:

• Current loan statement showing the last 12 months of transactions
• Loan payout letter from your existing lender
  

If it sounds confusing, don’t worry. We’ll remind you of all the documents you need to provide during the loan application process.

So, you’re ahead of the game? High five!

Making extra repayments on your renovation loan is not only admirable, it could also mean you’ll repay your loan earlier and save a chunk of money on interest.

But if circumstances change along the way, you might need some extra funds. That’s where your redraw facility comes in. If your renovation loan has a redraw facility, you can access the additional repayments for your own use.

Best of both worlds.

One advantage of a redraw facility is that it allows you to pay down your renovation loan which will also lower the amount of interest you have to pay, while allowing you access to any extra repayments if you need them.

What’s the catch?

First, you’ll need to check whether your renovation loan includes a redraw facility as part of its conditions. Usually, renovation loans with a variable rather than fixed interest rate offer a redraw option.

Keep in mind, redraw facilities are designed for occasional use only and you can only access those extra repayments over and above the monthly required amount. Your lender might also need you to make a certain number of additional repayments before you’ll be permitted to redraw the funds.

Also, be aware that you may be hit with a fee if you redraw the money, so it’s a good idea to check with your lender before you proceed.

What’s the alternative?

If you find yourself in a situation where you need to redraw more funds than you have available, or you’re concerned about being stung with a redraw fee, you might want to consider refinancing your renovation loan instead.

If you’re a young student juggling studies and part-time work, or just beginning your first full-time job, chances are you have limited or no credit history. We get it – we all have to start somewhere! 

Applying for a personal loan without a credit score can be a little tricky. Lenders may view you as a ‘risky’ borrower because there’s no report card available that evaluates how well (or badly) you’ve handled your debts and repayments in the past.

Your credit score takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed in the past. It also notes your history of repaying debts on time, including bills such as mobile phone plans.

But don’t lose heart. Follow this guide and you’ll soon be on the road to buying your very own sweet ride, even without a credit history.

Will I be approved?

If you can show that you have the means to make regular repayments on your personal loan without going into financial difficulty, you’ll have a better chance of being approved for a personal loan. Here are 5 ways to prove you’re a trustworthy borrower:

1. Have a secure job with a regular income (it doesn’t need to be full-time).
2. Make sure your income is high enough to easily meet the repayments for the loan you want.
   
3. Show that you save money from your income each month.
   
4. Make sure there’s no history of late payments on your bills (this includes Afterpay).
   
5. Save for a deposit in a high-interest savings account.
   
6. All of these things will help improve your chances of having your personal loan approved. 

Proof of life 

Before agreeing to loan you the funds, the lender will want to be sure you have a stable home and job. Basically, they want to know you’re not a flight risk. Makes sense, right? 

Gather together the paperwork you need to show the following:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill, etc.
  
• Proof of income, such as recent payslips, current bank statements and a letter from your employer stating your employment details.
  
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.
  
• Contact details for people who can authenticate these details, such as your employer, landlord or accountant.
  

There’s no doubt about it, having a positive credit report makes it much easier to get approved for a personal loan. The good news is it’s easy to build your credit history and you don’t need to take out a credit card to do it. 

Simply by paying your bills on time, such as mobile phone and electricity, you will start to build a positive financial report. Think about setting up direct debit payments for these bills so that you always pay on time. 

Guaranteed security

Having a family member or friend with good financial status and credit history act as a guarantor application could improve your chances of being approved for a personal loan if you have no credit score yourself. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Number crunch! 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Once you have a particular personal loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees

Peer-to-peer lending

When you’re researching student personal loans, it pays to look beyond the ‘Big Four’ banks. Online lending platforms, also known as peer-to-peer lenders, often provide a faster approval process and lower interest rates than traditional lenders. 

This type of lender, also known as ‘peer-to-peer’ lending or marketplace lending, allows you to seek a loan from a private lender. All P2P lenders set their own loan requirements and terms. 

It’s a good idea to check the comparison rates of various lenders to make sure you find the best loan to suit your needs. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on personal loans quickly and easily, including loans offered by P2P lenders. 

Banks and credit unions 

Some banks and credit unions offer personal loans specifically for students, while others will simply offer their regular personal loan products. You probably have a long history with your bank through your savings accounts, which might help if you have no credit history. 

A traditional personal loan from a bank or credit union can be secured or unsecured. 

Secured personal loan: This type of loan is usually secured by an asset of value. This means if you can’t make repayments, the lender can take the asset and sell it to recover the cost of the loan. The higher the value of the asset, the lower the interest rate may be on this type of loan. 

Unsecured personal loan: An unsecured personal loan usually has a higher interest rate than a secured personal loan. This is because an unsecured personal loan does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. The lender assesses your credit score and income to approve the loan.

Fixed or variable interest rate?

When you apply for a personal loan, you have the option to choose between a fixed or variable interest rate. 

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation. 

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan. 

Pros

• You know exactly how much your repayments are each month.
• You can plan and budget with certainty, knowing your repayments won’t change.
  
• You’re protected from future interest rate rises.
  

Cons

• If the market interest rate falls, you pay more interest with a fixed rate.
• Some lenders may insist upon a shorter lending period.
  
• Fixed rate personal loans may not have a redraw facility.
  
• If you want to pay back your personal loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early.
  

Variable Interest Rate

A variable rate rises and falls with the market interest rate as it responds to current economic conditions. This means you could end up paying more or less for your personal loan, depending on the market rate.  

Pros

• If the market rate drops, you could pay less for your personal loan overall.
• Most lenders offer longer repayment terms with a variable interest rate.
  
• You may have the option to make additional repayments which could save you money over the life of your personal loan.
  
• You may be able to redraw from any additional repayments you have made if you need some extra cash along the way.
  

Most lenders offer longer repayment terms with a variable interest rate.

You may have the option to make additional repayments which could save you money over the life of your personal loan.

Cons

• If the market rate rises your repayments increase.
• Interest rate rises are unpredictable and could make it harder to budget and make plans for the future.
  

Choosing between a fixed or variable interest rate is an important decision that could have a big financial impact down the track. Some people prefer the predictability of a fixed rate personal loan, while others prefer the flexibility of a variable rate.

Are you in the market for a personal loan but you know there are black marks on your credit report? Or perhaps you’re young, new to the workforce and have no credit history. Either way, you might be wondering whether guaranteed personal loan approval is an option for you.

In Australia, the National Consumer Credit Protection laws prevent lenders from offering guaranteed approvals to loan applicants. It might sound harsh, but the laws are in place to protect you by ensuring loan providers practise ‘responsible lending’. This means they must assess your current financial situation, how much you want to borrow and your ability to repay the loan without creating financial hardship down the track.

Even though guaranteed approval is not available in Australia, there are other options for people with bad credit or no credit, so don’t lose heart.  

Some lenders are willing to provide personal loans for people with bad credit scores or no credit history as long as they feel sure you’re able to make repayments regularly without falling into financial difficulty.

Plenti can tailor a personal loan solution to suit your circumstances, including competitive rates and flexible features, even without a good credit score.

When you need to access money in a hurry, it might be tempting to use whatever financing option is available at your fingertips. If you have access to a line of credit through your mortgage or business, you could be considering using either of these.  

While lines of credit can be a handy tool in emergency situations, such as unexpected home maintenance or dental work, they are not always the best idea.

It’s important to take the time to understand the differences between a personal loan and a line of credit so you can make an informed decision that you won’t regret down the track.

Key differences

Let’s take a quick look at the differences between a personal loan and a line of credit.

A personal loan is a lump sum provided for a purchase of almost any kind.

A line of credit, on the other hand, is a reusable loan that you can access as often as you like up to your credit limit. Just like a credit card, you can use a line of credit to buy whatever it is you need or want.

A personal loan comes with a repayment schedule and is generally paid off between 12 months and 7 years. And you generally can’t redraw on your car loan repayments.

Unlike a personal loan, a line of credit has no set loan term or repayments. You simply pay a percentage of your monthly credit balance or a set amount, whichever is greater. Once you’ve repaid a line of credit, you can withdraw the money again if something else comes up.

Most personal loans come with a fixed interest rate. This means you’re protected from market fluctuations and can easily budget as the repayments never change throughout the life of the loan.

The interest rate on a line of credit is generally variable and is likely to be higher than that of a personal loan. A variable interest rate means your repayment amounts can change as they respond to the rises and falls of the economic market.

Three reasons why you shouldn’t use a line of credit

A line of credit might seem like a convenient solution, here’s three reasons why you should think again.

1. Unlike a personal loan, a line of credit has no set loan term or repayments. Without set monthly repayments, it can be harder to manage the debt and make paying it off a priority. Unless you are very disciplined, you could still be paying it off for longer than you think. Also, if you fail to make repayments, your credit score will take a hit. 

2. A line of credit comes with a higher interest rate than a personal loan. This means the overall cost of the loan will end up being higher.

3. A variable interest rate on a line of credit means your repayment amounts could change as the rate fluctuates. This makes it difficult to budget correctly for repayments and stay in control of your finances.

The bottom line

If you plan to use a line of credit make sure you’re aware of the risks and dangers. Taking out a personal loan instead is a generally a faster track to financial freedom. Remember, a personal loan allows you to budget for fixed repayments and easily track your progress. When your loan is finished, you can bask in the satisfaction of knowing you’ve paid everything off.  

A personal loan is a sum of money that you borrow from a lender, such as a bank or credit union, over an agreed time period. The loan is paid back in regular weekly, fortnightly or monthly instalments with interest, which may be fixed or variable across the life of the loan.

With a personal loan you can borrow between $2,000 and $50,000 across 6 months to 7 years. However, there are some lenders that offer up to $100,000 for individual or joint applicants. In addition to a set repayment schedule, some lenders will also allow you to make early repayments. This gives you the flexibility to reduce the time to repay your personal loan, meaning you save on interest costs.

Low rate personal loans can be more cost-effective than other types of finance. Each lender will offer different interest rates that you have to pay on the amount you owe.  When comparing against other sources of finance, (e.g. credit card, line of credit, home loan top-up), it’s worth checking carefully for any fees and the amount of time you have to pay back the loan when comparing against other sources of finance (e.g. credit card, line of credit, home loan top-up).

Interest rates and comparison rates can sometimes hide the true cost of a loan. Your monthly and total repayments provide a clear basis for comparing the value of personal loans from different lenders. 

Uses for personal loans

Personal loans are designed to be flexible, providing you with a high degree of choice as to how you use your funds. That being said, you will need to share your loan purpose with your lender when you apply. This loan purpose will be taken into account when considering how suitable a personal loan is to your situation and the maximum amount your lender is willing to offer you.

Based on a recent review of Plenti personal loans, there are seven loan purposes that Australians borrow for more than any other:

• Debt consolidation (25%)
• Home improvement (22%)
  
• Buying a car (18%)
• Solar panels and home batteries (13%)
  
• Travel & holidays (5%)
  
• Medical & dental fees (2%)
  
• Weddings & honeymoons (2%)   
  

Each lender will have its own criteria for assessing loan purpose, so it’s important you make sure your purpose is clear before you apply. For example, things like tax bills, court fines or penalties and margin loans are unlikely to be acceptable purposes to lenders for a personal loan. Neither are borrowing for overseas transfers, gambling, weapons, savings or for anything deemed to be illegal. Rest assured, however, if you have a genuine purpose for the funds and a demonstrated ability to repay you will find a lender to suit your needs.

Personal loan features vary across different lenders. Understanding the different building blocks of a loan is important in helping you compare and choose the right personal loan.

What to look for in a personal loan

Interest rate

The interest rate, also known as Annual Percentage Rate (APR) or Advertised Rate, is the percentage that you’ll pay on top of the amount you borrow in interest, usually expressed as an annual rate.

Interest rates vary depending on the lender, your credit history, your repayment schedule and a range of other factors. They are based upon the lender’s calculation of risk (for you as an individual and the market as a whole) and their underlying costs.

Many lenders market their products using a ‘headline’ advertised rate, which represents the best rate they are able to offer a customer. Often this low rate is available to only a small proportion of borrowers. Before you apply anywhere, it pays to do your research and get a personalised rate from a number of providers. You just need to make sure that the lender’s quote process is ‘credit score friendly’. That is, they only conduct a soft check on your credit file, which won’t impact your credit score.

The competitive nature of the personal loans market in Australia means it pays to shop around for a better rate. That being said, the lowest interest rate does not necessarily mean the best loan. You need to consider the total cost of the loan, including interest, fees and other costs to truly assess the value of any interest rate on offer.

Comparison rate

The comparison rate represents the overall cost of a loan, including the interest rate and fees, expressed as an annual percentage. As a result, the comparison rate is usually higher than the interest rate charged on the loan.

Under the National Consumer Credit Protection Regulations, lenders must provide a comparison rate when they advertise an interest rate. This was introduced to stop lenders from advertising lower rates when the total cost of the loan would be significantly more once fees and other costs were included.

For personal loans, there is a standardised measure for how comparison rates are calculated.

Whilst the comparison rate is a useful tool for comparing personal loans on a like for like basis, it’s important to remember that not all costs are included. For example, you still need to consider:

• Late repayment fees
• Early repayment fees
• Deferred establishment fees

Repayments

Your repayments are the amount you agree to pay to your lender on a regular schedule. Repayments can be weekly, fortnightly or monthly and vary by lender.

Whereas interest rates and comparison rates can sometimes hide the true cost of a loan, your monthly and total repayments provide a clear basis for comparing the value of personal loans from different lenders. When making your comparisons, however, it is important that the loan repayment calculations have been quoted inclusive of any ongoing fees for all lenders.

Upfront fees

Upfront fees, also known as establishment fees or credit assistance fees, are ‘once-off’ charges that are applied at the commencement of a personal loan. These fees can be:

• A flat fee (e.g. $150) that applies regardless of the value of the loan
• A tiered fee (e.g. $250, $500, $750) based on the total amount borrowed
  
• A percentage fee (e.g. 4%) based on the total amount borrowed and the credit risk of the customer
  
• A hybrid fee (e.g. $200 + 2% of the loan amount)
  

Upfront fees are usually capitalised to the loan. This means the upfront fee is added to the amount you wish to borrow. For example, if you are borrowing $10,000 with an upfront fee of $300, the total loan amount on commencing the loan will be $10,300.

Why is this important? Well – that interest rate you are being offered will be applied to the total loan amount – inclusive of your upfront fee. In the case of a small upfront fee, the difference might be a few dollars on each repayment. On an upfront fee of 4%, however, you could be paying $1,200 on a $30,000 loan, meaning you will be charged interest on a $31,200 balance. Ouch!

If you’re considering a lender with a low interest rate, it’s important you check to make sure there isn’t a high upfront fee that outweighs the benefit of the lower rate. This is particularly true of percentage-based fees that flex with the amount being borrowed. Checking the comparison rate and the proposed repayments will allow you to assess this compared to other lenders.

Ongoing or monthly fees

Ongoing fees, also known as account keeping fees or loan management fees, are fees that are paid every month across the life of the loan – without reducing the amount you owe. For example, a $10 monthly fee on a 5-year loan adds up to $600 across the life of the loan. That’s a lot of money that’s not going to repaying your loan principal.

Like all fees, the presence or absence of monthly fees is all relative to the total amount you repay over the life of the loan.

Banks and larger lenders often have lower upfront fees that are offset with a monthly fee of $10 to $13. This means the net cost of the upfront fee and the monthly fee may be higher than you otherwise would have paid for a lender with a higher upfront fee and no monthly fees. In the end, it pays to do the math on ongoing fees before you commit to a particular lender.

Early repayment fees

Repaying your loan as quickly as possible is a clever strategy as it will reduce the overall amount of interest you pay on your loan. However, if you do find yourself in a position to do this (well done!), the last thing you want is to be hit with an early repayment fee (also known as an exit fee).

Early repayment fees can range from $0 up to $800 or a % of the loan value on repayment, with $150-175 being the most common fee. That’s a fair amount for you to pay for doing something that is good for you. Therefore, it pays to read the fine print on fees before you commit to a loan.

It’s worth noting that some lenders have set conditions that trigger an early repayment fee that varies with the type and duration of the personal loan. For example, unsecured fixed interest rate personal loans with the banks often have far stricter early repayment terms than for their variable-rate loans. Lenders with no early repayment fees ultimately provide you with the highest degree of flexibility in how and when you repay your loan.

Penalty fees

We all know we should try to avoid penalty fees at all costs — it’s just throwing your money away — but we’ve all missed a direct debit from time to time. That's why you should always make sure you are aware of any penalty fees and make sure they are not too onerous.

The most common penalty fee associated with personal loans is the ‘default’, late or missed payment fee, which usually arises where there are insufficient funds in your nominated account on the day a payment is due. Late payment fees range from $20 to $35, however, some lenders will waive the fee if the account is brought up to date within 3 days.

It can help to make a budget of your expenses before you agree to the loan so that you know that you’ll comfortably be able to make repayments. You should also consider opening separate savings accounts to transfer funds into each payday that separate from your daily transaction account to ensure funds are always available.

When it comes to penalty fees, it is a case of buyer beware. Always take the time to read the loan terms and conditions and look out for any other hidden fees, including ‘new age’ penalty fees like charges to receive paper statements.

Loan amount

The loan amount is how much you intend to borrow. This is the principal amount upon which interest is paid (plus any upfront fees). In Australia, lenders have a minimum loan amount and maximum loan amount that they accept. These generally range from $2,000 to $50,000, although a small number of lenders may lend up to $100,000 for individual and joint applicants.

Within the advertised range, however, most lenders apply loan capping rules. This means they adjust the maximum loan amount you may be eligible for based on your credit score, income, mortgage status and a range of other factors. This maximum loan eligibility will usually be communicated to you when you get an initial quote or rate estimate from a lender.

Even once you have applied with a lender for a specific loan amount, they may come back to you with a ‘counter-offer’. A ‘counter-offer’ is a conditional approval based on a loan amount that is lower than the amount you’ve requested but one the lender believes you can afford and meets their responsible lending requirements.

Whilst it may be tempting to borrow as much as you can, make sure your repayments will be realistic to make within your budget. This will be a significant factor in determining whether your loan will be approved.

Loan term

The loan term represents the length of time it will take to repay the loan in full with a regular repayment schedule. In Australia, lenders offer terms from 6 months to 7 years, with 3 and 5-year terms being the most common. A longer-term loan will usually attract a higher interest rate and the loan will cost you more overall but your repayments will generally be lower.

Customer experience

All lenders operate differently. So whilst customer experience isn’t a traditional product feature, it does go a long way to determining how quick and easy it is to apply, get approved and manage your loan. Trusting you are getting the best deal, a lender who cares about your experience should be a key factor in your decision.

The best place to start doing your homework is to check out reviews on third-party websites that provide independent and verified feedback about customers' experience with a lender. They tell you a lot about the customer experience at an aggregate level more than any list of features and attributes might. Product Review, TrustPilot and Google Reviews all provide insights into the best performing personal loan providers.

Each year, Canstar assesses and ranks 100s of personal loans to help borrowers to decide which ones will be awarded a 5-star rating. In addition to rating the overall product’s value (80% of the score), Canstar’s ratings also attribute 20% of the rating to the loan’s features. This includes Loan Management and Customer Service and Support. For a loan to get a 5-star Canstar rating, the lender has to provide great customer service and tools, such as an online portal for managing your loan and repayments.

Types of personal loans

The different types of personal loan can significantly change the costs involved and what is needed from you in order to be approved for a loan. It’s important to weigh up which is best for you.

Fixed- vs variable-rate personal loans

Personal loans have two interest repayment types, fixed and variable. Both have different features that will influence whether they are suitable for you.

With a fixed-rate personal loan, the amount you pay in interest is set from the beginning of the loan through to completion. This means your weekly, fortnightly, or monthly repayments remain the same. When you choose a fixed interest rate, you benefit from being able to lock in a competitive rate with the security of knowing your repayments will remain steady regardless of changes in the market. This is a useful feature when managing a budget.

Fixed-rate loans do, however, tend to attract a higher rate of interest than the current variable rates on offer. That being said, when interest rates are already low, locking in a fixed rate can protect you from any future rate increases due to changes in the lender's funding or the the broader economy.

With a variable-rate personal loan, the interest rate can change or vary over the life of the loan. Variable interest rates can change for a number of different reasons (e.g. market changes, cost of funds etc.) and can vary between loan providers. When rates move down, you as the borrower benefit from lower repayments. When rates move up, you will need to be able to cover the added costs. To account for this uncertainty, variable-rate loans have a lower starting price than their fixed-rate counterparts.

Want greater flexibility or are hoping to pay your loan back early? Variable-rate personal loans often have fewer repayments restrictions than fixed-rate loans, so you can make additional repayments and repay your loan early without getting charged an early repayment fee.

Finally, it’s worth remembering that the rate you may be offered on a personal loan may be higher than the advertised fixed or variable rate. The lender will usually decide your interest rate based on your credit score, income, expenses, and assets. So, whilst the variable option may seem more favourable initially, once you’ve received a personalised rate estimate, a fixed-rate personal loan may have a lower rate, and vice versa.

Secured vs unsecured personal loans

If you own an asset like a car, home or term deposit, you may be able to access a lower interest rate with a secured personal loan. With a secured loan, your asset(s) will be put up as security for the loan. This means that as part of your loan approval and acceptance, you will grant the lender rights over the asset, usually in the form of a mortgage, caveat or charge. In the unlikely event that you are unable to make your repayments, the rights granted to the lender will allow them to seize the asset(s) and on-sell them so that the outstanding debt can be repaid.

Because of this, lenders view secured loans as less risky and therefore are willing to offer a lower interest rate. Having an asset-backed loan may also allow you to borrow a larger amount or for a longer period than would be available to you if the loan were unsecured.

Some secured loans have special rules that impact what or how you can use the funds. For example, a secured car loan may place restrictions on the type of car, whether it is new or used, or the maximum age of the car being bought. This is to ensure that the asset's loan to value ratio (LVR) is sufficient to cover the outstanding value of the loan in the event of default.

Whilst there are benefits to a secured loan, the vast majority of personal loans are unsecured. With an unsecured personal loan, no assets are used as security against the loan. In this case, a lender’s decision to provide you with a loan is based solely on how creditworthy you are. Put simply, are you more or less likely to make your repayments on time or default on the loan? As a result, choosing an unsecured loan may result in a higher interest rate or lower loan amount being offered.

Fixed-term personal loan vs a line of credit

Fixed-term personal loans work well where you have a specific one-off purchase to make or defined expenses to pay, such as buying a car or paying for a wedding or holiday. They also attract lower interest rates than lines of credit, while providing you with the confidence that comes from having a predictable repayment schedule. Having a defined start and end date also ensures you are committed to repaying the debt and you are repaying the principal amount of your loan.

If it's flexibility you are after, some personal loan providers offer top-up, redraw or second loan options for borrowers.

A ‘top-up’ is where you add an additional amount to your existing loan. This will result in a change in your repayments and can sometimes result in a resetting of your loan term. It remains one loan, with a single repayment schedule for your convenience.

A ‘redraw facility’ allows you to make early repayments on your personal loan. The early repayments create a buffer between the actual amount you have repaid versus the amount that would have been outstanding on your loan original repayment schedule. This buffer is the amount you are able to withdraw at any point during the loan. In this case, your repayment schedule and amount remain the same.

Some lenders may be willing to offer you a second loan while your original loan balance is outstanding. To qualify, you will need to have maintained an impeccable repayment record (i.e. no missed payments in the last 12 months) as well as be able to demonstrate you can service a second loan (e.g. you have surplus income after your existing expenses). Different lenders have different credit policies, so it pays to do your research.

A line of credit is a type of personal loan that works like a credit card. It allows you to draw on funds in the form of an ongoing credit facility. You pay off the debt and accrued interest in instalments, in the meantime, you can access a set amount of extra funds as you need it.

Unlike a personal loan where you get one big lump sum, a line of credit gives you a credit limit but the funds stay where they are until you withdraw them. The advantage here is that you only pay interest on the money that you actually use versus the entire amount as would be the case with a personal loan. Generally, a line of credit loan is useful if you need ongoing access to money but don’t know yet exactly how much. Some lenders provide a debit card for this.

Lines of credit offer the benefit of having ongoing access to money to spend as you wish or in case of emergency. A word to the wise: if you get tempted to spend just because you can and lack the discipline to make full payments on time, the higher interest from a line of credit can add up quickly. These loans usually come with numerous fees and charges.

Special purpose personal loans

Some lenders offer personal loans with lower interest rates provided the funds are used for a specific purpose.

Green loans

A green loan is an unsecured personal loan that you can use to fund the purchase and installation of approved renewable energy products (like solar panels or home batteries). These products can help significantly lower your power bills and the cost of the loan can potentially be offset by the power savings alone.

Green loans have specific criteria that may vary by lender. This may include the types of renewable technology covered, all the way down to the brand, make and model of device being installed. In order to facilitate this, the majority of green loans are offered at the point of sale by a fully accredited renewable energy installer from a list of pre-approved products. The accredited installer will assist you with your finance application and once your products have been installed, the lender will pay the installer's invoice directly.

A Plenti Green Loan ranges from $2,000 to $50,000 and 3 to 7 years, however, the average loan size is around $8,000 to $12,000.

Renovation loans

Repairing, remodelling or revamping your home can be a great way to add to the value of your property. Some lenders offer specialised loans for home renovations. These can be secured or unsecured and may attract a lower rate of interest than a standard unsecured loan.

To qualify for this lower rate, however, there may be additional costs (e.g. fees for registering mortgages or charges over secured property) and information requirements (e.g. detailed quotes, council approvals and valuations). There may also be restrictions around the use of funds, for example, some lenders will pay the borrowed amount directly to the provider(s), making it a less flexible option than a traditional personal loan.

Risk-based pricing

It is now more common for lenders to give a ‘personalised’ interest rate and tailor the loans offered. This is achieved through ‘risked-based’ pricing, where the rate provided is based on the probability of a borrower defaulting on a loan. The lender will calculate this by looking at your credit history, financial situation, loan type, loan amount and a range of other factors that are used to build your unique risk profile. If you are deemed ‘low-risk’ and more likely to pay back the loan, you’ll be rewarded with a lower rate, and ‘higher risk’ with a higher rate.

In the past, risk-based pricing wasn’t common in Australia, mainly because credit reports only showed negative credit events or ‘black marks’ (e.g. missed payments or defaults), rather than giving an overall picture. With the introduction of comprehensive credit reporting (CCR) credit providers are now required to include extra ‘positive’ information such as the type of credit you hold, the amount of credit and whether you pay your bills on time.

Most lenders will provide you with a rate estimate or quote before you go through their online application process (which does not affect your credit score). From there you should be well placed to compare the features and benefits of each loan.

What is my credit score?

Based on the information in your credit report, your credit score, or rating, is a single number that sums up how risky – or trustworthy – you are as a borrower. Credit scores are typically on a scale of 0–1,200 or 0–1,000 depending on the credit agency you use. The higher your credit score, the more ‘reliable’ you are perceived to be and the greater the likelihood of your loan being approved.

Now that the industry uses comprehensive credit reporting (CCR), credit reports are more detailed so that lenders have a better picture of both the positives and negatives. To calculate your credit score, credit agencies will assess:

• How much money you’ve borrowed in the past
• How much credit you currently have
  
• How many, and what type of credit applications, you’ve made (this can now include payday loans and buy-now-pay-later services such as AfterPay)
  
• Whether you pay on time
  
• Any loan defaults
  
• Court judgments
  
• Information from your bank, telco, insurance and utility companies
  
• Your age, address and employment situation
  
• Up to two years of your general financial history
  

You can request your report and rating/score from credit rating agencies before you go through and pay for the application process. This does not impact your credit score. Be aware that because there are multiple credit agencies, the information your lender uses may not be exactly the same.

Get your free credit check from one of Australia’s major credit rating agencies: Equifax, Experian or Illion.

There is no one-size-fits-all when it comes to personal loans. It really comes down to finding the best fit for you. So how can you decide which is right for you?

First, you need to make a few key decisions. Planning and considering your situation upfront will help when comparing what personal loan products are available that might really fit your needs, and offer the best value.

1. Decide how much you really need

To decide how much you need to borrow (loan amount), do some research and budgeting to work out how much (approximately) you are going to need for that car, holiday or wedding. In the case of debt consolidation, it helps to know exactly which debts you are consolidating and how much money you have outstanding. It’s smart to only borrow what you really need, rather than all that may be offered to you by a lender.

Remember, when you borrow money to pay for something, the actual ‘cost’ of that item becomes much higher when you factor in the cost of the loan. For example, if you borrow $20,000 to buy a car with a 5 year Unsecured Loan and a fixed interest rate of 12.50%, once you factor in interest and fees that car may actually cost you around $27,417.

2. Decide how much you can afford to repay

Look at your everyday budget, or create one, to see how much you can realistically afford to put towards repayments. It’s always good to give yourself a buffer; failure to make a repayment at any time can cost you a lot. Are you expecting any major expenses or changes in income in the next few years, perhaps changing where or how much you work or perhaps hoping to have a baby? Be sure to build this in.

Whether you receive your income weekly, fortnightly or monthly, you need to know how much you have leftover at the end of each pay period and how this will align with your repayments. This is to ensure there are no missed payment surprises. It may be worth opening a separate bank account for your repayments and transferring these funds in on payday so you are never caught out

3. Decide how long you will need to repay

Divide the loan amount by your planned monthly repayment to get a ballpark amount of time you’ll need to repay the loan. For example, Jo wanted to borrow $24,000 to pay for his upcoming wedding. Based on his salary and existing expenses, he thought $120 per week / $480 per month would be an affordable repayment. This would be $5,760 per year, meaning in 5 years he’d have paid $28,800— roughly the full amount, accounting for interest and charges.

A longer-term loan might seem attractive as it means lower monthly repayments, however, the overall (lifetime) cost of the loan is significantly higher because you’ll pay more in interest, and potential fees. That being said, provided you look for a loan with flexible repayments, you’ll be able to take advantage of any future increases in salary that may allow you to pay down your loan faster without penalty.

4. Decide between a secured or unsecured loan

Do you have an asset that you are willing, or able, to put up as security against the loan? Perhaps property, or the new car you’re planning to purchase? If you are confident in your ability to repay the loan, then a secured loan will get you a better rate and may unlock access to greater funds. Be aware however that your asset will be at risk if you can’t make the repayments.

5. Get your rate estimates and compare your offers

Now you know roughly how much you need to borrow, what you can afford to repay, and how long you’ll need to repay your loan. Next you can start to plug these values directly into lender or comparison sites to get an estimate of your personalised interest rate and repayments.

Experiment with different combinations, such as different loan terms or repayment amounts, and match them against your needs. Need more help deciding? There are many third party agencies (that don’t sell loans) that rate and compare a broad range of loans.

Canstar is one of the most established financial comparison sites, and they’ve been comparing products without bias since 1992. They release annual star ratings for a range of personal loans from many providers. To do this, Canstar comprehensively and rigorously examines a broad range of loans available across Australia. To come up with an overall score, they award points for:

• Price — comparative pricing factoring in interest and fees
• Features — like the complexity of the application, the time involved before settlement, product management, customer service, and loan closure

These are then aggregated and weighted to produce a total score. This means Canstar’s ratings are reputable and transparent, so you can trust the information they provide, but dig deeper if you want to. Other comparison sites can also be useful, however, you should always check around, as some may have a ‘sales’ element — that is they may receive money for the people that visit their website en route to a particular lender.

So if the best rate isn’t being offered, it may not show up on their comparison. They also have ‘promoted’ or ‘featured’ loans, which they are paid to highlight, even if those loans do not truly reflect the best value loans on the market.

Another way to get information on your lender and loan is to read feedback from real, verified customers’ on ProductReview.com.au.

What questions should I ask when comparing?

Here’s a useful checklist to be confident you understand your loan.

• What are the interest rate and the comparison rate?
• How do these rates compare to other loans?
  
• What are the fees and charges? (e.g. upfront, ongoing, early exit)
  
• What are the terms and conditions?
  
• Do the loan term and loan amount fit your needs?
  
• Can you afford the repayments?
  
• Are you comfortable with the lender? Have you checked its reputation and accreditation?

Get ready to compare

Taking the time to compare personal loans is worth the effort. Once you have an idea of what type of loan that you’d like, it becomes easier to compare apples with apples. Comparison rates can be a really important tool to compare personal loans.

For example, if a personal loan has an interest rate of 11.35% p.a. and a comparison rate of 13.47% p.a., that means this loan includes a high amount of fees. If the loan has an interest rate of 10.13% p.a. and a comparison rate that is the same, it shows that there aren’t fees included in the loan.

Always make sure you are comparing loans that are like-for-like. That means each product has the same loan term, loan amount and loan type (e.g. secured vs unsecured).

Other factors to consider

Comparison rates are a good starting point, but you still need to decide what will work best for you. The costs involved are a major factor, but once you've shortlisted a few loans with similar costs, there are some other things to check out:

• Are there flexible repayment options? Usually, you can choose between weekly, fortnightly or monthly repayments according to what suits your pay cycle. However, not all lenders offer this. Compare a loan’s conditions and fees around making extra repayments and paying the loan off before the end of the term.
• Can you use the funds for what you need? You can’t always use the borrowed money for whatever you like, particularly if you’re taking out a Secured Loan. For example, if you are taking out a car loan, you’ll only be able to spend the loan funds on a vehicle purchase, and the vehicle needs to be eligible according to the particular lender's criteria (such as new, secondhand, age). Some lenders don’t allow you to take a personal loan for business purposes. Make sure you can use your loan how you need to.
  
• What are the options for managing the loan? Check and compare how easy the loan will be to manage. The option to manage your account online is often available but not always. Using direct debit for repayments is common, however, if it's not, manually paying is less convenient. It also increases the likelihood of late payments if you aren’t especially disciplined.
  

It’s in the name, right? Well, yes – but there’s also a little more to it than you might think.

A car loan is a type of personal loan used for — you guessed it — buying a car. It allows you to shop for a car using finance instead of your savings. Handy.

But that’s not where the story stops. There’s more than one type of car loan. And there are also other ways to pay for a car when you don’t have (or don’t want to part with) the money in the bank. Let’s take a look at what is a car loan, and what isn’t.

The choice is yours
Car loans are a great way to buy a car on your terms, avoiding a big lump sum upfront and spreading the cost over monthly repayments. They come in a few different shapes and sizes. Here are just a few ways to tell them apart.

New or used?
You can apply for a car loan for a new, demonstration or used car. What you choose to buy may affect your loan, as a used car loan may come with extra conditions on the purchase.

How much can I borrow?
In Australia, you can borrow between $2,000 and $100,000 or more across a range of loan terms, typically 3, 5 or 7 years. The loan is paid back in regular instalments (weekly, fortnightly or monthly) with interest, which may be fixed or variable across the life of the loan.

Other ways to pay
The term ‘car loan’ can be a bit of a catch-all for a range of financing options. Each type of car finance has its own unique flavour.

• Dealer finance: Many car dealerships offer on-site finance, taking care of everything under one roof. Sounds easy but it’s important to shop around to make sure you’re getting the best deal. You also risk the dealer marking up the cost of the car to make back any discounts they give you on the interest rates.  
• Chattel mortgage: Like a secured loan, you’re agreeing to put forward an asset as security for a loan. It’s an option for business owners and the self-employed and comes with some tax benefits.
•  Car lease: With a car lease your lender actually buys the car and you agree to make rental repayments over an agreed term. At the end of the lease, you may have an option to purchase the car outright at a reduced price or return the vehicle.
  
• Novated lease: A novated lease is a form of a car lease that is used with salary packaging. It comes with some tax benefits as you repay costs (including both the purchase price and ongoing running costs) with your pre-tax income.  
  
• Commercial hire purchase: Similar to a car lease, except when the contract comes to an end and the total costs of the vehicle (including interest) has been repaid, you own the car. As the name suggests, it’s only available for cars used for a business purpose  
  

Help your hip pocket with the finance know-how you need in your back pocket.

Bamboozled by finance? Asking yourself, how do car loans work? Car loan features vary across different lenders. Luckily, when you understand the building blocks of a loan, how they can be packaged and the pros and cons of each, you have everything you need to choose the right loan for you and buy that new car for a great deal. Let’s help you unravel the mystery.

Recipe for a loan
So, how do car loans work? All loans are made up of the same ingredients. It’s about finding the mix that tastes good to you.

Interest rate
As nice as it would be, loans aren’t free money. You need to pay them back, plus a little more to pay the lender for giving you the money. That’s the interest.

The interest rate, also known as Annual Percentage Rate (APR) or Advertised Rate, is the percentage that you’ll pay on top of the amount you borrow. It’s usually expressed as an annual rate and lenders will factor in things like your credit history, your repayment schedule, the risk (both for lending to you and how the market is going) and their underlying costs to come up with their magic number.

Most lenders have a starting point – the lowest rate they have available. This is their headline advertised rate. But that doesn’t mean they’ll offer you this rate. This low rate is usually available to only a small proportion of borrowers and may come with set conditions to qualify (e.g. a high credit rating plus homeownership).

So before you apply anywhere, it pays to do your research and get a personalised rate from a number of providers. Just make sure that the lender’s quote process is ‘credit score friendly’. That is, they only conduct a soft check on your credit file which won’t impact your credit score.

And remember, the lowest interest rate doesn’t necessarily mean the best loan. You need to consider the total cost of the loan including interest, fees and other costs to truly assess the value of any interest rate on offer.

Comparison rate 
Sometimes you might get a great rate, but the loan comes with whopping fees and other costs. It’s easy to get caught out if you don’t know exactly what you’ll pay. The comparison rate has you covered, as it shows the overall cost of a car loan, including the interest rate and any fees, expressed as an annual percentage. The comparison rate is usually higher than the interest rate charged on the loan.

It’s pretty important – lenders and brokers must provide a comparison rate when they advertise a car loan interest rate under the National Consumer Credit Protection Regulations.

For car loans, there is a standardised measure for how comparison rates are to be calculated and displayed:

• For car loans 3 years and under, comparison rates are calculated on a $10,000 loan amount over 36 months.
• For car loans 4 years and over, comparison rates are calculated on a $30,000 loan amount over 60 months
  

But there’s a catch – not all costs are included. To ensure you don’t get an unwelcome surprise later, you still need to factor in:

• Government stamp duty and on-road costs
• Late payment fees
• Break costs or early termination fees
• Deferred establishment fees
• Broker fees (when taking out a loan through a broker, the broker's service fees are not included in the comparison rate, which can be significant) 

Repayments

You have your loan, you’ve bought your dream car – now it’s time to repay the money. Like most bills, a loan requires regular payments. That schedule is up to you and your lender and can be weekly, fortnightly or monthly. It’s these repayments you need to look at when it comes to managing your budget. And it’s important that the loan repayment calculations have been quoted inclusive of any ongoing fees.

Some lenders also offer a product feature called a balloon payment – a lump sum repayment you make at the end of the loan term. It can be a handy way to manage your cash flow by reducing your regular repayments. But remember, you still need to find the money for the lump sum due at the end of the loan. And you’ll also be paying interest on a higher loan balance along the way.

Upfront fees

Upfront fees are what get you started. Also known as application or establishment fees, they’re ‘one-time’ charges at the start of a car loan. They can include:

• A flat fee (e.g. $499) that applies regardless of the value of the car loan
• A tiered fee (e.g. $250, $500, $750) based on the value of the car loan
  

• A percentage fee (e.g. 3%) based on the total amount borrowed; and the credit or risk profile of the customer
• A hybrid fee (e.g. $200 + 2% of the loan amount)
  

But it’s up to your lender if they charge any or all of these.

Here’s a quirk – establishment fees are usually capitalised to the loan. Even though they’re called ‘upfront’, that’s not when you pay them. The amount will be added to your loan, increasing your total loan amount.

Why is this important? Because you’ll be paying interest on those fees (as part of your total loan). If it’s a small upfront fee, the difference might be a few dollars on each repayment. But if it’s bigger, it quickly adds up.

Monthly or ongoing fees
Also known as account keeping or loan management fees, ongoing fees are paid (usually monthly) across the life of the loan. They go straight to the lender and don’t reduce what you owe at all. Generally the lower the fees, the better. But again, it’s all relative to the total amount you repay over the life of the loan.

Brokerage fees
Brokers can help you navigate the muddy waters of car finance. But they’re not a charity – they do get paid for their service and at the end of the day that’s coming out of your pocket.

In the case of car loans, the brokerage fee is often capitalised to the loan amount. This is usually in addition to the lender’s own upfront fee. They can also have commission arrangements with lenders that are either built into your interest rate or offer them a return based on the final rate you accept. So you need to weigh up if their service is worth it.

Penalty fees
Life happens. When it does, make sure you don’t make a bad situation worse by being pinged with penalty fees you can’t afford. 

The biggest penalty fees to look out for is the ‘default’ or missed payment fee. This fee can be charged when you make a payment late, and often occurs where there are insufficient funds in your nominated account on the day a payment is due.

Late fees vary from $10 to as much as $35, so be sure to keep an eye on your spending, always making sure you have enough in your account to pay the loan, or even set up a separate account dedicated to paying your loan. Some lenders may waive the fee if the account is brought up to date within 3 days but it’s best not to risk it.

It’s a case of buyer beware, so always take the time to read the fine print.

Early repayment fees
Repaying your loan as quickly as possible is a clever strategy as it will reduce the overall amount of interest you pay on your loan. But it can come at a cost – you might get charged for your good work.

Exit fees or early repayment fees are more common with secured low-rate car loans. There are different types:

• A fixed fee where the loan is repaid in full any time prior to the end of the loan term (e.g. $500)
• A fixed fee where the loan is repaid in full prior to a minimum period (e.g. $250 if full repayment is made less than 2 years into a 5-year loan)
  
• A variable fee based on the amount you would have paid in interest and fees had the loan run to full term
  

If you think you want to pay your loan down ahead of schedule, pick a loan with low or no early repayment fees to make sure it’s worth it.

Loan amount
How much money would you like to borrow? Yep, that’s your loan amount (plus those upfront fees). It’s what you pay interest on and it’s also known as the “principal” part of your repayments.

In Australia, car loans usually range from $5,000 to $100,000, but some lenders will go higher.

When considering your loan amount, you need to factor in:

• Loan to value ratio (LVR): How much you’re borrowing compared to how much your car is worth. Most car finance providers in Australia will have a maximum LVR of 140%. For different vehicles, brands, types and manufacturing years, lenders will set specific LVR thresholds.
• Borrowing capacity: The maximum loan amount you may be eligible for based on your credit score, income, mortgage status and a range of other factors, including the lender’s responsible lending obligations.
  

It might be tempting to borrow as much as you can for that sweet set of wheels, but make sure your repayments fit within your budget.

Loan term
A loan lets you spread out the cost of your car over a period of time. This time is the term of your loan. In Australia, lenders offer terms between 1 and 7 years, with 3, 5 and 7-year terms being the most common.

So, why does time matter? A longer-term loan might have a higher interest rate and the loan will cost you more overall. But when it comes to managing your budget, your monthly car loan repayment will be lower. It’s about what works for you.

Customer experience
When it comes to your car loan, customer experience isn’t just the sprinkles on top, it’s the plate your dish is served on. Without it, things can get messy.

Think about how quick and easy it is to apply, get approved and manage your loan. Knowing you have a lender who cares about your experience can go a long way towards trusting you’re getting the best deal.

Anything else?
The last piece of the puzzle is your car. Whatever type of car loan you’re looking at, always check for vehicle restrictions including:

• The maximum age the car can be at the end of the loan term
• What types of cars and vehicles can be funded (e.g. electric vehicles, utes, vans, etc.)?
  
• Can you buy used or second-hand vehicles? If so, does it have to be through a dealer or can it be a private sale?
• Should I get pre-approved for a car loan?

You might also be wondering when the best time is to think about finance. You don’t have to wait until you find a car to buy – you can actually get a pre-approved car loan.

To give a loan pre-approval, the lender follows the usual process of assessing your situation. Then when it comes time to buy, you know you’ll have enough money and it also gives you a firm budget, helping to speed up and make negotiations (particularly with dealers) smoother and easier.

Just remember, pre-approvals are only valid for a few weeks, so you need to be motivated to buy. You’ll need to make sure the car meets the conditions of the pre-approval or you will need to re-apply. Also, not all lenders offer pre-approval.

What can I use it for?

New car loan, used car loan or something else. Find your perfect match.

Looking for a car that puts the 0 in odometer? Or happy with something that’s been around the block a few times? Your choice of car can affect your choice of loan. Let’s take a look at what exactly you can use each type of loan for and what conditions come along when you choose between a new car loan and a used car loan.

For that new car smell

If you love all things shiny and new, then you’re probably eyeing off cars straight out of the factory. But a new car loan isn’t just for brand new arrivals – some lenders will let you use a new car loan for a car that is 1, 2, or even 3 years old.

You can get either a secured or unsecured new car loan as an individual Australian resident or as a business, depending on the lender. To be considered eligible for a car loan you will generally need to:

• Be aged 21 or over
• Be an Australian citizen or permanent resident
• Be able to demonstrate a regular source of income
• Have a good credit history.

For those preloved wheels

Got your eye on a car that’s too old to qualify for a new car loan? Try a used car loan instead.

A used car loan works in the same way as a new car loan. You can either apply for a loan first and get pre-approval so you know how much you have to spend on a car, or you can find the car you want and then apply for your required loan amount.

Either way, the lender will need to see all your car’s details before you can be fully approved. But they also might put extra conditions and restrictions on a used car loan, such as how old the car can be. The number of restrictions placed on your car loan also depends if you’re using the vehicle as security for your loan.

A used car loan allows you to enjoy a lower interest rate than you would receive if you were to finance through a credit card. Typically, the average interest rate of a car loan is between 5% to 17%. However, used car loans often attract lower interest rates and borrowers with a good credit rating can see their interest rates lowered to anywhere from 5% to 10%. 

It’s important that you compare car loan rates in the early stages of your car hunt, as some lenders may have restrictions on vehicles that are older than 12 years at the end of the loan term. You want to get the best rate possible for a used car loan. Once you have this information, you can start to get an estimate on how much your repayments will be and if you have to pay at a fixed or variable rate.

Australians love their cars. In fact, we access billions of dollars in finance for our car purchases each year. And the vehicles we prefer tend to be pretty nice ones. The average size of a car loan is $31,738.40. So it’s no wonder we look to pay for our new wheels with car finance.   

The type of car loan, its conditions and how quickly you pay it back impacts how much a loan costs you over its lifetime. 

To work out the overall cost of your car loan finance, you need to factor in:

1. Car loan interest rates: Fixed or Variable — The biggest factor in how much a personal loan will cost you is the rate of interest you’ll pay on the amount borrowed. If you are opting for a variable-rate loan, it is best to also calculate a worst-case scenario, one where a loan’s interest rates rise significantly in the future to be sure you have a comfortable buffer in the event things change. The interest rate will also be different for secured car loans compared to unsecured car loans.
2. Upfront fees: The ‘establishment’ or application fee can vary greatly, it’s an area where shopping around can make a difference.
   
3. Ongoing fees: Ongoing fees that occur throughout the loan: monthly/annual fees; default, dishonour or missed payments; other hidden fees

These three costs can be combined to create a comparison rate. As long as you are comparing the same car loan terms and amount, a comparison rate helps you to compare the cost of different loans. 

There may be fees for early repayments if you pay back the loan in full early. Balance these against the benefit of reducing the amount of interest that you pay on your car loan by making extra repayments reducing the amount you owe. Always shop around and use comparison tables, a repayment calculator and the comparison rate as a guide.

Car loan interest rate
The interest rate, also known as Annual Percentage Rate (APR) or Advertised Rate, is the percentage that you’ll pay on top of the amount you borrow in interest, usually expressed as an annual rate. Interest rates vary depending on the lender, your credit history, your repayment schedule and a range of other factors. They are based upon the lender’s calculation of risk (for you as an individual and the market as a whole) and their underlying costs.

Many lenders market their car loan products using a ‘headline’ advertised rate, which represents the best or cheapest interest rate they are able to offer a customer. Often this low rate is available to only a small proportion of borrowers. Before you apply anywhere, it pays to do your research and get a personalised rate from a number of providers. You just need to make sure that the lender’s quote process is ‘credit score friendly’. That is, they only conduct a soft-check on your credit file, which won’t impact your credit score. Asking Plenti for a RateEstimate will not affect your credit score. 

The lowest car loan interest rate does not necessarily mean the best car loan. You need to consider the total cost of the loan including interest, fees and other costs to truly assess the value of any interest rate on offer. 

Car loan interest rates will vary according to the type of loan. Usually, a secured car loan will attract a lower interest rate than the rate for an unsecured loan, because you’re offering something as security against defaulting on the loan. And that something is usually the car you’re planning to purchase. And the newer the car, the lower your interest rate may be.

Car loan comparison rates

The comparison rate represents the overall cost of a car loan, including the interest rate and fees, expressed as an annual percentage. As a result, the comparison rate is usually higher than the interest rate charged on the loan. 

Under the National Consumer Credit Protection Regulations, lenders must provide a comparison rate when they advertise an interest rate. 

For car loans, there is a standardised measure for how comparison rates are calculated:

• For personal loans 3 years and under, comparison rates are calculated on a $10,000 loan amount over 36 months
• For personal loans 4 years and over, comparison rates are calculated on a $30,000 loan amount over 60 months
  

Whilst the comparison rate is a useful tool for comparing personal loans on a like for like basis, it’s important to remember that not all costs are included. For example, you still need to consider late payment fees, early repayment fees and deferred establishment fees.

Car loan repayments

Your car loan repayments are the amount you agree to pay to your lender on a regular schedule. Repayments can be weekly, fortnightly or monthly and vary by lender. Whereas interest rates and comparison rates can sometimes hide the true cost of a loan, your monthly and total repayments provide a clear basis for comparing the value of personal loans from different lenders. When making your comparisons, it is important that the loan repayment calculations have been quoted inclusive of any ongoing fees for all lenders.

Upfront fees

Upfront fees, also known as establishment fees or credit assistance fees, are once-off charges that are applied at the commencement of a car loan. These fees can be:

• A flat fee (e.g. $150) that applies regardless of the value of the loan
• A tiered fee (e.g. $250, $500, $750) based on the total amount borrowed
• A percentage fee (e.g. 4%) based on the total amount borrowed and the credit or risk profile of the customer
• A hybrid fee (e.g. $200 + 2% of the loan amount)
  

Applying for a car loan directly online is quicker and easier than you might think. And you might be surprised at how the value stacks up. Am I eligible?

Car loan application approval odds and how much you can borrow varies from loan to loan, and lender to lender. 

For starters, you will need to be:

• Over 18 years of age, and in some cases over 21
• An Australian citizen or permanent resident
  
• Earning at least $25,000 per year, from a regular, proven source of income (If you are self-employed you will have to provide additional information)
  
• The holder of a provisional or full driver’s licence

If you have existing loans or debt, there may be fewer options open to you. It’s also a good idea to check the eligibility criteria for any specific lender you are considering before submitting an official application to avoid any unnecessary negative impact to your credit score. Some lenders will have a higher salary threshold for borrowers, and make a point of only lending to those with a high credit score.

What exactly is the process?

Once you have shortlisted your preferred lenders, you can usually request a quote or rate estimate, including your estimated borrowing power, before you officially apply. This is a good idea, as this process won’t affect your credit score. 

Depending on the lender, if you want to proceed, you can apply online, over the phone or in-person if the lender has physical branches. You’ll usually need to verify your identity, connect the lender to your online banking so they can verify your income and expenses and potentially provide additional information based on your car loan purpose. For example, if you are applying for a secured loan, you’ll need to provide information about the exact car you are providing as security. 

If approved, you’ll then need to accept your loan agreement. The majority of car loan agreements can be signed and accepted electronically.

What documents will I need to apply?

To process your application, a lender will typically ask you to show:

• Proof of identification: an Australian driver’s licence or a passport
• Proof of address: copies of your recent utility bills
  
• Verification of a stable income: payslips, bank statements or tax returns
  
• Details of your expenses and liabilities: bank, credit card and loan statements

Plenti has a streamlined online application portal, where you can connect your bank details securely. That’s one of the ways we make applying for a loan simpler, faster and easier than ever. 

What will your lender consider?

• Your employment stability
• Your income (e.g. salary, rent, interest, etc.)
  
• Your expenses (e.g. mortgage, groceries, etc.)
  
• Your repayment history on other loans
  
• Credit agency/bureau information  (credit report and score/rating)
  

These findings will determine if you’ll be approved, and if so then for how much you’ll be able to borrow. Often the interest rate offered will be lower if you have a good credit rating. If you’ve had problems paying your bills and debts in the past, you may only be offered a loan at higher rates.

What is my Credit Score?

Based on the information in your credit report, your credit score, or rating, is a single number that sums up how trustworthy you are as a borrower. Credit scores are typically on a scale of 0 – 1,200 or 0 – 1,000 depending on the credit agency. The higher your credit score, the more ‘reliable’ you are perceived to be and the greater the likelihood of your loan being approved, at a lower interest rate.

Now that the industry uses comprehensive credit reporting (CCR), credit reports are more detailed so that lenders have a better picture of both the positives and negatives. 

To calculate your credit score, credit agencies will assess:

• How much money you’ve borrowed in the past
• How much credit you currently have
  
• How many, and what type of credit applications, you’ve made (This can now include payday loans and buy-now-pay-later services such as AfterPay)
  
• Whether you usually pay your bills and loan repayments on time
  
• Any loan defaults
  
• Any court judgments
  
• Information from your bank, telco, insurance and utility companies
  
• Your age, address and employment situation
  
• Up to two years of your general financial history

You can request your report and rating/score from credit rating agencies before you go through with a loan application. This does not usually impact your credit score. Be aware that because there are multiple credit agencies, the information your lender uses may not be exactly the same.

Get a free credit check from one of Australia’s major credit rating agencies: Equifax, Experian or Illion.

How do I improve my chances of getting approved?
Applying for a car loan has the potential to impact your credit score, particularly if your application is declined. Therefore, it’s important that you put your best foot forward before beginning the application process. We’ve assembled a useful selection of tips to help you submit a strong loan application.

Make sure you pay your existing debts on time. Did you know that repayments that are more than 14 days late may be recorded on your credit file? While less serious than a default, a series of late repayments can have an equally negative impact on your credit score. Making late repayments also sends a bad message to a prospective lender and may result in you paying higher interest rates.

If you do ever find yourself behind on your repayments, it’s important you contact your lender directly. Working with your lender toward a mutually beneficial outcome can help to protect your credit score. Remember, it’s far easier to protect a good credit score than it is to improve a weak one.

Only request as much as you need to borrow. When assessing your application, a lender will look at whether you can service a loan. Essentially, this evaluates whether, after all your expenses, you have income left over to meet the repayments of your proposed loan.

If you request an amount that is more than your finances say you are able to repay, it’s highly unlikely you will get approved. In some cases, a lender may offer you a longer car loan term to reduce your repayments, but it’s best to do your homework first. Use a repayment calculator and budget to figure out what you can reasonably afford.

Review your credit history. Australia has three main credit bureaus, Equifax, Illion, and Experian. You can request a free copy of your credit score once a year. Once you’ve verified your identity (i.e. with a driver’s license, passport etc.) the bureau is required to provide you with your credit report within 10 days. Your credit report will provide an overview of your credit history, including previous loans, existing debts, and your performance as a borrower.

You should ensure all the information contained in your credit report is accurate, and if not, contact the bureau to have it remedied. This will have a direct impact on your credit score. If you’re unsure of how to interpret your credit score, see this ASIC guide.

Pay down existing debts. Lenders may look unfavourably on an application for individuals with large amounts of debt, particularly if the debts are already at the limits of what you can afford. It’s important to demonstrate a concerted effort to repay your existing debts to a reasonable level.

This applies even if your personal loan is for the purpose of consolidating your debt. While a move to lower interest rates makes sense, it may be hard to get approved without opening up some additional capacity between your income and expenses.

Minimise your credit card balance. Using a credit card can be a great way to help boost your credit rating by demonstrating you are financially responsible. However, you need to manage your credit card carefully to ensure your balance is consistently low.

Failure to make repayments can have an equally negative impact on your credit score. Finally, lenders are now required to assess your application based on your credit card limits, not the outstanding balance. If you have unused cards or excess limits, look into reducing them before you apply for a new loan.

Within the advertised range, most lenders apply loan capping rules. This means they adjust the maximum loan amount you may be eligible for based on your credit score, income, mortgage status and a range of other factors. This maximum loan eligibility will usually be communicated to you when you get an initial quote or rate estimate from a lender.

Even once you have applied with a lender for a specific loan amount, they may come back to you with a ‘counter-offer’. A ‘counter-offer’ is a conditional approval based on a loan amount that is lower than the amount you’ve requested but one the lender believes you can afford and meets their responsible lending requirements. Whilst it may be tempting to borrow as much as you can, make sure your repayments will be realistic to make within your budget. This will be a significant factor in determining whether your loan will be approved.

At Plenti, we assess your loan application in line with our credit criteria and our responsible lending obligations. Whilst no guarantee, following the tips above will go a long way to improving the prospect of successful loan approval.

How long will it take to get approved?
At Plenti, once your car loan application is approved (and you have accepted your loan contract) your funds are transferred into your account the following business day. 

The funds will be transferred  into the same account that you have nominated for your direct debits. 

Explore up to date primary data and statistics covering the car loan market and consumer behavior in Australia.

Despite the rapid growth of ride-hailing startups, private car-based mobility remains the number one transport option for Australians, with 19.5 million vehicles available for a population of around 26 million. Privacy, comfort, freedom, and convenience compared with public transport could be some of the reasons behind the country’s high rate of car ownership.

Australians access billions of dollars in finance for their car purchases each year. It’s worth exploring how much Aussies are borrowing and what they’re buying with their car loans. Are individuals buying new or used cars with their car loans? How do purchasing choices funded by car loans break down across different demographic groups?

1. Car loan sizes: how much is borrowed
The average loan size across all age groups is $31,738.40. Overall, those aged between 35 and 45 as well as those aged around 55 are the most likely to have the biggest loan amounts.

In the aged-20 group, the average gross amount borrowed is $26,520.40. The amount borrowed tends in an upward trend until the aged-50 group, with 25-year-olds borrowing an average of $29,643.30, 30-year-olds borrowing an average of $31,999.90, and 35-year-olds borrowing an average of $33,141.20.

Next, 40-year-olds borrow an average of $33,034.60, and 45-year-olds borrow an average of $33,144.10. By the aged-50 group, the average amount drops slightly to $31,242.00. This rises again at the aged-55 group, who borrow an average of $33,318.10.

The trend moves downward for the aged-60 group, who borrow an average of $28,357.50, and drops again at the aged-65 group, who average $24,670.7. At aged-70, the average rises to $33,632.70. For the aged-75 group, this drops again to $15,777.00.

However, variations in sample sizes should be noted as this could affect how accurately averages are representing whole-population trends.

For example, the aged-75 group number is taken from a sample size of only one loan, and the aged-70 group has a sample size of only 7 loans. The figures for the aged-65 and aged-60 groups are based on just 15 loans and 60 loans respectively.

In contrast, the aged-30 and aged-35 groups have the greatest borrowing activity at 678 loans and 556 respectively. Aside, the data could suggest those aged between 25 and 50 were the most likely to be financing a car purchase compared with other age groups.

Marital status and dependents
The average amount borrowed for all marital-status and dependent-number categories is $31,738.40. For all marital-status categories collectively, the average loan size trends upwards with each additional dependent up to three children.

Singles borrow an average of $29,924.40. Married/couples borrow an average of $32,725.20 whilst those in defacto relationships borrow an average of $32,027.40.

For those with no dependents, the average loan size is $30,738.80. Average borrowing amounts then increase to $31,722.60, $34,130.00, and $34,326.10 for one dependent, two dependents, and three dependents respectively.

For those with four dependents, the average loan size is $31,477.60. This drops to $27,187.80 for five dependents, increases to $50,474.00 for six dependents, and $28,585.00 for seven dependents.

2. Sale types

What type of sales are car loans used to finance and how long does settlement from loan pre-approval take?

The majority (around 80%) of transactions financed with a car loan settle within 10 days and 90% settle within 30 days from pre-approval.

A small percentage settle within one or two days, and these transactions likely involve borrowers who’d already found their ideal car before applying.

The largest share of car-loan-funded transactions are dealership sales. Private sales account for the next largest share, and refinancing the smallest share.

3. Popular car models and preferred brands
The data reveals Ford and Toyota to be the top brands among those borrowing to buy their car. More specifically, the Ford Ranger and Toyota Hilux are the two most popular cars for people borrowing to buy their car.

For those aged 18 to 19, the Holden Commodore is the model of choice, whilst those between the ages of 20 and 24 as well as the 25- to 29-year-olds tend to opt for Toyota Hilux.

For all age buckets from 30 to 59, the number one car model is the Ford Ranger. Those aged from 60 to 64 have a preference for the Mitsubishi Triton.

From 65 to 69 and 70 to 74, Australians borrowing to buy cars, like their 20- to 29-year-old counterparts, prefer to buy the Toyota Hilux. From ages 75 to 79, the most popular car for car-loan-funded buys is the Toyota Ranger.

Millennials vs boomers
In terms of millennials vs boomers, these two generations of typically contrasting tastes share a rare agreement when it comes to a preferred car brand. Among those financing their car purchase, Australians aged between 24 and 39, and those aged between 56 and 74 are most likely to choose a Toyota-branded vehicle.

Marital status
Among borrowers, the Ford Ranger is most likely to be the car of choice for those in de facto and married relationships as well as those who are single. Those in a civil union borrowing to buy their car are likely to choose a Toyota Landcruiser, while those in the Other category prefer the Toyota Hilux.

Income brackets
Income brackets appear to have little impact on the popularity of models among those borrowing to buy their car. From tax brackets 1 to 5, the most popular car was the Ford Ranger with the exception of tax bracket 2, for which the Toyota Hilux is the preferred model.

4. New or used cars
For those financing their car purchase, a used car is the most likely option, with 69.5% of borrowers choosing used. The remaining 30% or so opted for a new vehicle.

5. Popular times of the year for car loans
April and March are the least popular times of the year for car loans, with just 88 and 111 loans recorded for these months respectively. May tends to see more borrowing activity, with 148 loans logged, and loan levels steadily increase through June (185), July (194), August (262), and September (289), to exceed the 222 loans transacted in February.

By October (405) and November (469), the busiest times of the year for car loans, car loan numbers have exceeded the levels of the relatively popular periods in January (301) and December (384).

6. Which states or territories are borrowing most?
It’s not surprising the country’s most populous states, New South Wales (957 loans), Queensland (838 loans), and Victoria (764) record the most car loans. However, Victoria’s population exceeds Queensland’s by around 1.5 million but the southern state records fewer car loans than the sunny northern state.

Western Australian ranks fourth with 262 car loans processed, and next is South Australia with 137 car loans. As expected, their rankings are in line with their populations.

The Australian Capital Territory comes next in sixth place, although it is the seventh most populous state/territory in Australia, after Tasmania. Tasmania ranks seventh for car loan numbers with 27 loans recorded, followed by the least populous state/territory, the Northern Territory, which recorded 13 loans.

As one of Australia's fastest growing providers of secured car loans Plenti has a wealth of data and insights on the automotive industry and consumer trends. If you are interested in connecting with us, you can reach out to us via hello@plenti.com.au.

Home loan vs. renovation loan: here's why the difference matters.

If you’re interested in a renovation loan, chances are you already have a home loan. So can’t you just use that for renovating? You can, but a home loan and renovation loan aren’t quite the same. Let’s look at how they work so, when comparing home loan and renovation loan options, you understand the choices to make.

Home help
A home loan is, unsurprisingly, a loan to buy a home. In return for the money, you give your lender security over the property you are using the loan to buy. Home loans will typically be on a 25 to 30-year term, with regular fortnightly or monthly repayments.

If you have enough equity built up in your home, you can refinance your home loan – essentially borrowing more money against the increased value of your home. This can include borrowing money to fund a renovation. Doing this will increase the amount of your total loan that needs to be repaid. This gives you longer to repay the additional finance as it will be spread across the life of the loan, but it will likely cost you more in loan repayments.

What to look for in a renovation loan
A renovation loan is a great choice if you don’t have enough equity in your property to borrow or have the ability to repay your loan quickly. The amount you can borrow is based on the estimated post-renovation value of your home. 

If you’re wondering what renovations are eligible, you simply need to consider: will it improve your home value? Compared to extending a home loan, a renovation loan will likely save you money, because it can be paid off completely within a shorter amount of time.

Renovation loans, just like any other personal loan, have the same building blocks. Understanding those pieces will help you choose the right loan for you.

Interest rate
When you borrow money from a lender, you agree to pay it back with interest. The percentage of interest that you’ll pay on top of the amount you borrow is called the Annual Percentage Rate (APR) or Advertised Rate. It’s usually an annual rate. To work out your rate, lenders will factor in things like your credit history, your repayment schedule, the risk of lending to you (both personally and looking at the market) and their underlying costs.

The lowest rate lenders have available is the headline advertised rate. But it’s usually only available to a small proportion of borrowers. It may come with set conditions to qualify (e.g. a high credit rating) so you might not be offered this rate.

What you’ll likely need is a personalised rate. Talk to a number of providers and see what they’re willing to offer you. Just check that their quote process is ‘credit score friendly’. You want to make sure they only conduct a soft check on your credit file, so it won’t impact your credit score.

And remember, it’s important to consider the total cost of the loan including interest, fees and other costs to properly assess the value of any interest rate on offer. Because the best loan for you might not actually come with the lowest interest rate.

Comparison rate
As well as interest, a renovation loan will usually come with fees and other charges. They can quickly add up, and suddenly the great rate you get isn’t worth it. A comparison rate factors in the interest rate and any fees expressed as an annual percentage. The comparison rate is usually higher than the interest rate charged on the loan and gives you a better idea of how much the loan will cost you.

It’s a pretty important number, which is why lenders and brokers must provide a comparison rate when they advertise a loan interest rate under the National Consumer Credit Protection Regulations.

How is it measured?
For renovation loans, there is a standardised measure for how comparison rates must be calculated and displayed. For variable and fixed-rate personal loans, the comparison rate is based on a $30,000 unsecured loan over 5 years.

But don’t get caught out – not all costs are included. You should remember you still need to factor in:

• Late payment fees
• Break costs or early termination fees
• Deferred establishment fees
• Broker fees (when taking out a loan through a broker, the broker’s service fees aren’t included in the comparison rate, which can be significant)

Repayments

When it comes time to pay back your loan, you’ll be making regularly scheduled repayments, either weekly, fortnightly or monthly. When you factor these repayments into your budget, check that your loan repayment calculations have been quoted inclusive of any ongoing fees.

Your lenders might also give you the option of making a lump sum repayment at the end of the loan term, called a balloon payment. It’s a handy way to manage your cash flow, because it reduces your regular repayments. But you’ll be paying interest on a higher loan balance as you go. However, the lump sum is still due at the end of the loan, so you’ll need to remember to find the money along the way.

Upfront fees
When you apply for a loan, you’ll face a few one-time charges to establish the loan. Known as establishment or application fees, they can include:

• A flat fee (e.g. $499) that applies regardless of the value of the loan 
• A tiered fee (e.g. $250, $500, $750) based on the value of the loan 
• A percentage fee (e.g. 3%) based on the total amount borrowed and the credit or risk profile of the customer 
• A hybrid fee (e.g. $200 + 2% of the loan amount)

It’s up to your lender if they charge any or all of these

But even though they’re called ‘up front’ fees, that’s only when you’re charged them, not when you pay them. They’re usually capitalised to the loan, meaning they’re added to your loan, increasing your total loan amount. 

That means you’ll be paying interest on those fees (as part of your total loan) for the life of your loan. If it’s a small upfront fee, the difference might be only a few dollars on each repayment. But if they’re significant, they can be costly.

Monthly or ongoing fees
Ongoing, account keeping or loan management fees, are typically paid monthly across the life of a loan. They just go straight to the lender and don’t help you pay down your loan at all. Typically, the lower the fees, the better. But it’s still important to look at the total amount you repay when you factor in all interest payable and costs.

Brokerage fees
Brokers can be helpful, but you’ll still need to pay them for their service, whether or not you realise it. For personal loans, the brokerage fee is often capitalised to the loan amount and is additional to the lender's own upfront fee. Brokers can also have commission arrangements with lenders built into your interest rate or offered as a return based on the final rate you accept. It’s another cost you should remember.

Penalty fees
Penalty fees are avoidable, but they’re still a reality. The most common penalty fee is the ‘default’ or missed payment fee. If you make a payment late, or there are insufficient funds in your nominated account on the day a payment is due, you’ll likely be hit with a fee.

Late fees vary from $10 to as much as $35. Your lender may waive the fee if your account is brought up to date within 3 days of a missed payment, but you shouldn’t count on it. Be sure to keep an eye on your spending and make sure you have enough in your account to pay the loan. You might even like to set up a separate account dedicated to paying your loan. 

Early repayment fees
Paying back your loan early is a great way to save money, just make sure you don’t get charged a hefty early repayment fee that undoes all your good work.

Exit fees or early repayment fees are more common with secured low-rate loans. There are different types:

• A fixed fee where the loan is repaid in full any time prior to the end of the loan term (e.g. $500) 
• A fixed fee where the loan is repaid in full prior to a minimum period (e.g. $250 if full repayment is made less than 2 years into a 5-year loan) 
• A variable fee based on the amount you would have paid in interest and fees had the loan run to full term
  

Loan amount
How much money do you need for your renovation? Yep, that’s your loan amount (plus those upfront fees). This is the principal part of your loan that you’ll be repaying. Interest is charged on top of this, based on the outstanding balance of your loan.

In Australia, renovation loans usually range from $2,000 to $50,000, but some lenders will go higher.

Loan term
A renovation loan gives you a dedicated window to pay back what you borrowed. In Australia, lenders offer loan terms between 1 and 7 years, with 3, 5 and 7 year terms being the most common.

Your monthly repayments will be lower if you take longer to pay. Just remember, to do your sums because a longer-term loan might have a higher interest rate that will cost you more overall.

Customer experience
A variable fee based on the amount you would have paid in interest and fees had the loan run to full term

Finding a lender that cares is the glue that sticks it all together. Look for a lender who makes it quick and easy to apply, get approved and manage your loan. They should care about your experience. If you know they care, you can more easily trust that you’re getting a great deal.

What can I use my renovation loan for?
For a kitchen renovation fit for a master chef or simply to fit more friends at the table – it’s your choice.

Looking to add value to your property, expand your living space, improve your home’s energy efficiency, or simply to make it a more comfortable place to live? You can do it all and more with a renovation loan. That dream kitchen renovation? Done. That extra room downstairs? Move right in. If you can dream it, you can build it. A home renovation loan can help you pay for it.

For home, sweet home
Turn those home dreams into home pride. A renovation loan can be used for:

• Kitchen renovations – A renovation loan can be used for any kind of kitchen renovation or remodel, including cosmetic renovations such as installing new appliances and furniture. Add more cabinets, remodel to suit your lifestyle or instal new splashbacks that pop, it’s for everything including the kitchen sink
• Bathroom renovations – A renovation loan can take your bathroom from “oh dear” to “oh my.” Update an old bathroom from top to bottom – upgrade taps and plumbing, install a new shower or bath and replace those outdated tiles with your designer choice. You can also add a second toilet or bathroom
• Bedroom renovations – A renovation loan is perfect when a bedroom needs a quick lift. Bedroom renovations can include new paint and cabinetry, new beds, curtains as well as updated flooring such as carpet, floorboards or tiling
• Living area renovations – A renovation loan can help you gain that much-needed space, extending your living area for more comfortable family gatherings
• Backyard renovations – Renovation loans aren’t just for the inside. You can also use them to pay for outdoor improvements that make life outside more enjoyable, like a new garden, those long overdue pavers, a retaining wall, a deck or a pool
• For adding value — It’s not all about what you get now, a renovation loan can also help you plan for the future. Renovation loans can be used to fund any value-adding renovations. These types of renovations include adding an addition to your house which can boost your property’s overall value and comfort.

For going green

A renovation loan can be used to not just improve your life but improve the planet. Cover the costs of green or energy-efficient additions to improve your home’s sustainability, such as solar panels and insulation. And you might just end up helping your hip pocket.

For feeling secure

Take care of everything that’s precious to you and use a renovation loan to make your home more secure. You can use it for security screens, a garage or secured parking. 

Skip the renovation grant. Fund your own dream home improvements with a renovation loan (it’s easier than you might think).

If talk of a renovation grant has got you thinking about home improvements, you might be surprised to learn you have to sink some serious money to access the government cash. For the $25,000 grant, you’ll need to stump up $150,000 of your own money first. Some dreams are big – second-home-loan-big.

So if your renos are south of the six-figure mark, a simple renovation loan might be a much more manageable option.

How much can I borrow?
A renovation loan is a type of personal loan to cover the costs of a home renovation. So it won’t be like committing to another mortgage. With Plenti, you can borrow between $2,000 and $50,000 for a loan term of 1 to 7 years depending on your loan type.

Paying for your home improvements with a renovation loan means you can pay it off in a much shorter amount of time than a home loan. Even though it might be at a slightly higher interest rate, fewer repayments mean you’ll keep more money in your pocket over the long run.

How much does a renovation loan cost?
Because a renovation loan is a personal loan, the overall cost is based on you, your needs and your situation. Lenders look into a range of factors regarding your credit history to provide you with a personalised interest rate.

There are three key features that make up the loan cost:

• Interest rate – whether it is fixed or variable 
• Upfront fees – for example, establishment fees 
• Ongoing fees – These include monthly fees, late payment fees, and other charges

These costs are then combined to create a comparison rate. This shows you the actual cost of the loan over a standard term. This is the rate you’ll want to use when making loan comparisons.

Who can apply?
We don’t want your loan to cause you financial strain, so we only loan to responsible borrowers. You generally need to meet the following criteria:

• You’re 21 years or older 
• You’re an Australian citizen or permanent resident
• You have a regular income source that you can demonstrate 
• You have a good credit history

If that sounds like you, complete our one-minute RateEstimate quote. It will give you a summary of your loan options and borrowing power along with a personalised interest rate and fees based on different loan terms. We reward good credit history, so the better your credit, the better the rates we can offer.

From there, you’ll select your preferred loan option and begin the easy online application process. It should only take about 10 minutes.

We’ll need to verify who you are, so be sure to have your Australian driver’s license, or a copy of your passport and documents verifying your current address, handy.

We’ll also need to check your income, expenses and liabilities (e.g. credit cards, loans, etc.). You can log in to a portal that allows you to connect to your bank account and share your data with us. Of course, you’ll need your bank login details for this. 

For home renovation loans, you’ll also need additional documents outlining the type of renovations you plan to make and any estimates you may have received.

Finally, you’ll need to let us know where to send the money. This bank account will be the same account we use to set up your direct debit payment schedule. You’ll also have the flexibility to make extra repayments at any time.

Then we’ll look at your application and assess if a renovation loan is right for you. We’ll look at:

• Your employment stability
• Your income (e.g. salary, rent, interest, etc.)
• Your expenses (e.g. mortgage, groceries, etc.)
• Your repayment history
• Credit bureau information
• Other details you communicate to us

If we’re happy with how it looks, your loan will be approved, and you can get to work. No renovation grant needed.

What happens next?
Once your renovation loan application is approved and paperwork is finalised, we’ll transfer the funds to your nominated bank account the following business day. They should reach your bank account in 1-2 business days.

Your first monthly repayment will be debited directly from your nominated bank account, which you can change at any time by logging into your Plenti account. Remember that late payments will incur fees, so it’s important that you meet your monthly repayments. If things are going well, you can always make early repayments or pay your loan off in full at any time without incurring any additional charges.

Are renovation costs tax-deductible?
If your property is a rental or if you have plans of renting it out, you can claim the interest charged on your loan on your tax. But don’t expect to claim a tax deduction for the total cost of improvements to a rental property – you can only claim for work done for a repair or maintenance.

Examples of what you can claim include:

• Replacing broken windows
• Replacing guttering or downpipes
• Replacing a part of a fence due to damage (e.g. a fallen tree)
• Repairing electrical appliances
• Repainting interior wallsCleaning a swimming pool or oiling a deck
• Maintaining plumbing

You can’t claim for improvements. If you’ve made both repairs/maintenance and home improvements, you can only claim an income tax deduction for the cost of your repairs/maintenance. This means you’ll need to separate the cost of the repairs from the cost of the improvements.

How do I apply?

Applying for a debt consolidation loan is quicker and easier than you might think. And once all your debts are under control, you’ll have a lot less to worry about. 

Am I eligible? 
Application approval and how much you can borrow, varies from loan to loan, and lender to lender. 

For starters, you will need to be:

• Over 18 years of age, and in some cases over 21
• An Australian citizen or permanent resident
• Earning at least $25,000 per year, from a regular, proven source of income. If you are self-employed you will have to provide additional information.
• The holder of a provisional or full driver’s licence

As you do have existing loans or debt, there may be fewer options open to you. For starters, check the eligibility criteria for any lender you are considering before submitting an application to avoid any unnecessary negative impact to your credit score. Some lenders will have a higher salary threshold and make a point of only lending to those with a high credit score. You can find out more about your credit score and how to check it below. 

What is the process?
Once you’ve shortlisted your preferred lenders, you can usually request a quote or estimate of your borrowing power and some loan options before you officially apply. This is a good idea, as this process won’t affect your credit score. 

Depending on the lender, you can then apply online, over the phone or in-person if the lender has physical branches. You’ll usually need to verify your identity, connect the lender to your online banking so they can verify your income and expenses and potentially provide additional information about the debts you are consolidating. 

If approved, you’ll then need to accept your loan agreement. The majority of debt consolidation loans agreements can be signed and accepted electronically.

What documents will I need to apply?
To process your application a lender will typically ask you to show:

• Proof of identification: an Australian drivers licence or a passport
• Proof of address: copies of your recent utility bills
• Verification of a stable income: payslips, bank statements or tax returns
• Details of your expenses and liabilities: bank, credit card and loan statements

Plenti has a streamlined online application portal, where you can connect your bank details securely. That’s one of the ways we make applying for a loan simpler, faster and easier than ever. 

What will your lender consider?
Your lender will review:

• Your employment stability
• Your income (e.g. salary, rent, interest, etc.)
• Your expenses (e.g. mortgage, groceries, etc.)
• Your repayment history on other loans
• Credit agency/bureau information (credit report and score/rating)

These findings will determine if you’ll be approved, and if so then for how much you’ll be able to borrow. Often the interest rate offered will be lower if you have a good credit rating. If you’ve had problems paying your bills and debts in the past, you may only be offered loans at higher rates.

What is my credit score?
Based on the information in your credit report your credit score, or rating, is a single number that sums up how trustworthy you are as a borrower. Credit scores are typically on a scale of 0–1,200 or 0–1,000 depending on the credit agency.

The higher your credit score, the more ‘reliable’ you are perceived to be and the greater the likelihood of your loan being approved, at a lower interest rate. Now that the industry uses comprehensive credit reporting (CCR), credit reports are more detailed so that lenders have a better picture of both the positives and negatives. 

To calculate your credit score, credit agencies will assess:

• How much money you’ve borrowed in the past
• How much credit you currently have
• How many, and what type of credit applications, you’ve made (This can now include payday loans and buy-now-pay-later services such as AfterPay)
• Whether you usually pay your bills and loan repayments on time
• Any loan defaults
• Any court judgments
• Information from your bank, telco, insurance and utility companies
• Your age, address and employment situation
• Up to two years of your general financial history
  

You can request your report and rating/score from credit rating agencies before you go through with a loan application. This does not usually impact your credit score. Be aware that because there are multiple credit agencies, the one your lender uses may not be exactly the same.

Get a free credit check from one of Australia’s major credit rating agencies: Equifax, Experian or Illion.

How do I improve my chances of getting approved?
Applying for any kind of loan has the potential to impact your credit score, particularly if your application is declined.Therefore, it’s important that you put your best foot forward before beginning the application process. We’ve assembled a useful selection of tips to help you submit a strong loan application.

1. Pay as many of your existing debts on time as you can: Did you know that repayments that are more than 14 days late may be recorded on your credit file? While less serious than a default, a series of late repayments can have an equally negative impact on your credit score.

Making late repayments also sends a bad message to a prospective lender and may result in you paying higher interest rates. When you do find yourself behind on your repayments, it’s important you contact your lender directly as soon as possible.

Working with your lender toward a mutually beneficial outcome can help to protect your credit score. Remember, it’s far easier to protect a good credit score than it is to improve a weak one.

2. Only request as much as you need to borrow: When assessing your application, a lender will look at whether you can service a loan. Essentially, this evaluates whether, after all your expenses, you have income left over to meet the repayments of your proposed loan. If you request an amount that is more than your finances say you are able to repay, it’s highly unlikely you will get approved.

In some cases, a lender may offer you a longer loan term to reduce your repayments to an affordable amount. Use a repayment calculator and budget to figure out what you can reasonably afford.

3. Review your credit history: Australia has three main credit bureaus, Equifax, Illion, and Experian. You can request a free copy of your credit score once a year. Once you’ve verified your identity (with a driver’s license, passport etc.) the bureau is required to provide you with your credit report within 10 days. Your credit report will provide an overview of your credit history, including previous loans, existing debts and your performance as a borrower.

You should ensure all the information contained in your credit report is accurate.If not, you should contact the bureau to have it remedied. This will have a direct impact on your credit score. If you’re unsure of how to interpret your credit score, see this ASIC guide.

4. Be aware of your total debt and your capability to repay it: It’s important to demonstrate a concerted effort to repay your existing debts to a reasonable level. This applies, even if your personal loan is for the purpose of consolidating your debt. While a move to lower interest rates makes sense, it may be harder to get approved unless you’ve opened up some additional capacity between your income and expenses.

5. Minimise your credit card balance: Using a credit card can be a great way to help boost your credit rating by demonstrating you are financially responsible. However, you need to manage your credit card carefully to ensure your balance is consistently low. Failure to make repayments can have a negative impact on your credit score.

Finally, lenders are now required to assess your application based on your credit card limits, not the outstanding balance. If you have unused cards or excess limits, consider reducing them before you apply for a new loan. 

Within the advertised range, most lenders apply loan capping rules. This means they adjust the maximum loan amount you may be eligible for based on your credit score, income, mortgage status and a range of other factors. This maximum loan eligibility will usually be communicated to you when you get an initial quote or rate estimate from a lender.

Counter-Offers
Even once you have applied with a lender for a specific loan amount, they may come back to you with a ‘counter-offer’. A ‘counter-offer’ is a conditional approval based on a loan amount that is lower than the amount you’ve requested, but one the lender believes you can afford and meets their responsible lending requirements. Whilst it may be tempting to borrow as much as you can, make sure your repayments will be realistic to make within your budget. This will be a significant factor in determining whether your loan will be approved.

At Plenti, we assess your loan application in line with our credit criteria and our responsible lending obligations. Whilst no guarantee, following the tips above will go a long way to improving the prospect of successful loan approval.

How long will it take to get approved?

At Plenti, once your loan application is approved and you have accepted your loan contract, your funds are transferred into your account the following business day. 

The funds will be transferred  into the same account that you have nominated for your direct debits. 

When shopping for a car, people bring with them all sorts of preferences and must-haves, from the colour to the trim to the year – there’s a lot to consider. But among these age-old factors involved with car-buying, we also have another choice to make: whether or not we choose to drive green. Across the globe, sales of electric vehicles (EVs) have skyrocketed in the past two years, with sales nearly doubling in 2020 alone. China and Norway are leading the way, with more than 1.3 million EVs sold in 2020 in China, and 70% of new car sales in Norway being EVs.

Meanwhile, Australia has had a slower start with EVs, thanks to high costs and a lack of government incentives. However, in 2021 there has been a clear uptick in the number of EVs sold, as well as numerous announcements from carmakers regarding the release of additional EV models in the near future. In addition, governments across the country have announced plans to substantially enhance their public charging networks.

While Australia saw just under 6,800 EVs sold in 2020, growth in 2021 has been substantial, with more than 8,600 sold in the first half of the year alone. This was thanks in large part to the introduction of lower-cost EV models, significantly expanding the addressable market of buyers eager for EVs.As we continue to adopt greener solutions for everything from heating our homes to powering our vehicles, we’re making progress every day toward a more sustainable future. 

Interested in buying an EV, but not sure where to start? We’re here to give you a quick reminder of which EVs are available in Australia, including both all-electric and plug-in hybrid models.

To be eligible for a EV loan with Plenti, you will need to:

• Be purchasing a new or used Electric Vehicle (EV) or plug-in hybrid electric vehicle (PHEV)
• Be aged 21 years or older
• Be an Australian or New Zealand citizen or permanent resident
• Hold a valid drivers license (Learner, P1, P2 or Full)
• Earn at least $35,000 per year, from a regular proven source of income (additional requirements apply if you are self-employed)
• A clean repayment history and no bankruptcy, court judgement, paid or unpaid defaults on you credit file

Unsure whether you meet all the above criteria? You can get a rate estimate at any time without impacting your credit score.

If you’re itching to get behind the wheel, you’ll want to secure your car loan as quickly as possible. 

These days, the process of applying for a car loan is quick and hassle-free. With most of the application handled online, it’s possible to complete your application and be approved for a car loan within 48 hours.  

Make a move

It’s worth taking a minute to request a RateEstimate to find out if you’re eligible to apply for a loan with Plenti. It will also provide you with an estimate of the fees, charges and interest rate that may apply to your loan. 

If you’re happy with your rate estimate, we’ll typically finalise successful loans within a day or two of receiving your complete application. It’s that simple! 

Remember, requesting a free RateEstimate only takes 1 minute. It won’t impact your credit score and there’s absolutely no obligation for you to proceed with a loan application. 

To be eligible for a Plenti car loan you must:

• Be aged 21 or over
• Be an Australian citizen or permanent resident
  
• Be earning over $25,000 per year from a regular source of income that you can demonstrate
  
• Have a good credit history
  

Plenti will consider a loan application if you are self-employed. Additional credit assessment criteria and requirements may apply.

Make the first move and you could be hitting the road sooner than you think. 

Necessary paperwork

Lenders will ask for a range of documents to prove your identity and financial situation so that they can assess whether you will be a trustworthy borrower. Basically, they want to know that you have the ability to repay the car loan without falling into financial difficulty. 

It’s a good idea to prepare your paperwork ahead of time to speed up the process. Here is an overview of the type of documents you may need to provide when you apply for your car loan:

• 100 points of ID. For example, your driver’s license, passport, Medicare card, etc.
• Proof of residence, such as council rates or a utility bill that confirms your address.
  
• Proof of income, such as recent payslips, a tax return, a group certificate or current bank statements. Lenders may also ask for a letter from your employer stating your employment details.
  
• Proof of savings, such as bank statements or investment documents that show you have the ability to regularly save money from your income.
  
• Assets, including property or other vehicles that you own.
  
• Liabilities, including any other debts or loans in your name, such as credit cards.
  
• Proof of comprehensive car insurance to show you’re covered in case you are hit with a damages claim in the future.
  
• Contact details for people who can authenticate these details, such as your employer, landlord or accountant.
  

Details about your car 

Lenders may ask for details about the car you wish to buy so they can understand how much it will cost and how much you’ll need to borrow. You could be asked to provide documents such as:

• An invoice from the dealership or a contract of sale
• Vehicle chassis number
  
• The year, make and model of the car
  
• Registration details
  
• Details on the fuel efficiency of the car
  
• Confirmation of comprehensive car insurance
  

Number crunch! 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. Next, figure out how much you can contribute as a deposit, should you be approved for a car loan. 

Once you have a particular car loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees
  

Experiencing delays?

There are a few things that could stand in the way of a speedy car loan approval process.:

A poor credit score: If you have a poor credit score or no credit history, you may find it more difficult to be approved for a car loan. 

Limited deposit: If you have no deposit saved to contribute to the cost of the car, or your deposit is too small, it may slow down the approval process and you may be required to provide more documentation.

Incomplete paperwork: If you are unable to provide all the required information about yourself and the car, the approval process will be delayed.  

Obtaining a car loan when you’re unemployed might feel like a pipe dream. You might be wondering whether there are lenders out there willing to take a chance on you. The good news is your chances of securing a car loan could be higher than you think. 

Read on to find out how to get finance for a car, even without a job. 

Centrelink payments as income

Some lenders may offer you a secured car loan even if your only source of income is Centrelink payments. Regular, ongoing Centrelink payments such as the Age Pension, Carer Payment, Veteran Payment, Family Tax Benefit, Rent Assistance and payments from the National Disability Insurance Scheme (NDIS) may be viewed as regular income.

Usually, lenders require you to reach a certain minimum income before they will consider approving a car loan. If your Centrelink payments reach this minimum amount, some lenders will offer a secured car loan, if they are convinced you will have the ability to make the repayments without falling into to financial difficulty. 

A ‘secured’ car loan means you will need to offer an asset as security against your loan, such as a home, jewellery, valuable art or significant assets saved in the bank or in investment accounts. This means if you are unable to repay the car loan down the track, the lender could repossess your asset to cover the costs of the loan.

Know the score 

If you tick the box for regular Centrelink payments, the next step is to find out your credit score. Lenders will always check your credit history to see whether you have a history of repaying your debts on time. This helps them decide whether you are a trustworthy borrower.

Your credit report has a huge say in whether you’ll be approved for a car loan and how much you’ll be able to borrow. It also impacts the interest rate you’ll be offered and other loan features. 

Your credit score is a number that sums up the information on your credit report. It takes into account things like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. 

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. The higher the score, the better! 

Check out this credit score table from Equifax so you know where you stand:

• Excellent: 833 – 1,200
• Very good: 726 – 832
  
• Good: 622 – 725
  
• Average: 510 – 621
  
• Below average to average: 0 – 509
  

If your credit score is over 600, chances are you will be able to secure a car loan interest rate between 5% - 10% per annum. Scores below 510 are likely to attract a higher rate. 

Checking your credit score is a worthwhile exercise. It can help you negotiate better deals or understand why a lender rejected you. If you spot any errors in your credit report, you can fix them for free by contacting the credit reporting agency. 

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report for free by contacting one of these credit reporting agencies:

• Equifax: phone 138 332

• illion: phone 132 333
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. 

You can also obtain your credit report through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

Give it a polish!

It makes sense to work on your credit health consistently so that you can apply for personal loans with confidence. 

There are ways to clean up your credit report and increase your credit score to improve your chances of being approved:

• Pay your rent, mortgage and utility bills on time
• Make credit card repayments on time and try to pay more than the minimum repayment
  
• Lower your credit card limit
  
• All of these things will help your credit score to improve over time. 
  
• Save a deposit
  

Keep in mind that if you don’t have a job, you will need to save up for a larger deposit than if you were employed. You might be asked for a deposit of around 30% of the purchase price or even higher – but every lender is different so it’s important to shop around. 

Find a guarantor 

Having a family member or friend with good financial status and credit history act as a guarantor on your car loan application could improve your chances of being approved if you are unemployed. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Before you take this step, make sure you can afford the monthly repayments in addition to your other bills. Are you sure your income and expenses will remain the same throughout the whole term of the loan? If your circumstances change, could you still afford this additional debt?

Do the number-crunch 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website . Once you have a particular car loan in mind, make sure you’re aware of all the loan features and hidden costs including:

• The loan amount
• The interest rate
  
• The repayment period
  
• Additional fees such as establishment, upfront late payment, account keeping, early exit and monthly administration fees.
  

You might need to jump through a few extra hoops to obtain a car loan when you’re unemployed. But it’s not impossible. Talking to a car loan broker may speed up the process, as they will do the legwork to find a loan product that best suits your needs.

There’s no doubt about it, having your own set of wheels makes life easier. Perhaps you’re working part-time while juggling studies or a family. We get it. Even though you might need to provide extra reassurance that you can make repayments as a part-time worker, there’s still a good chance you will be eligible for a car loan. 

Before you apply for a car loan, ask yourself these questions:

• Can you prove you’ve been consistently employed for a considerable amount of time? You may need to show pay slips and a letter from your employer.
• Does your income exceed the minimum income criteria? To be eligible for a Plenti car loan, you must earn over $25,000 per year from a provable, regular source of income.
  
• Can you show proof of savings? If lenders can see that you’re capable of setting aside money for loan repayments, they’re more likely to view you as a trustworthy borrower.
  

Improve your chances

If you work part-time, lenders will look at your credit score, employment history, income, expenses and other debts to determine whether you have the ability to make repayments. Check out these 3 things you can do to improve your chances of qualifying for a car loan:

• Select a less expensive car so you can borrow a smaller amount
• Save for a deposit so you can borrow a smaller amount
  
• Check and improve your credit score
  

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you’re a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you apply for a car loan. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

Don’t lose heart

If you are not approved for a car loan, there are other options available. You could apply for a secured personal loan, instead of a car loan. With a secured personal loan, the lender uses the car that you purchase as security against the loan. This means if you can’t make repayments down the track, the lender can repossess the car to cover the costs of the loan. 

Alternatively, you could apply for a guarantor personal loan, where you have a family member or friend co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Having a guarantor on your personal loan might improve your chances of being approve because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might also be able to secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

Whether it’s time to consolidate your debts or plan your dream wedding, sometimes we all need a little help. A personal loan can bridge the gap in your budget and help you reach your goals faster.

When you apply for a personal loan, some lenders will allow you to have a family member or friend act as a guarantor. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason.

Pros and cons

Having a guarantor on your personal loan might improve your chances of being approved, especially if you are self-employed or have a low credit score. This is because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds.

You might also be able to secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan.

These are some of the pros to having a guarantor on your personal loan. But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics.

Before you take this step, make sure you can afford the monthly repayments in addition to your other bills. Are you sure your income and expenses will remain the same throughout the whole term of the loan? If your circumstances change, could you still afford this additional debt?

Who can go guarantor?

Every lender is different. While all of them will allow your parents or guardians to take on the role of guarantor, others might also allow relatives, like siblings and grandparents. In some cases, lenders may even permit friends to act as guarantors, if you can prove a long and steady relationship.

Make sure your guarantor meets these basic criteria:

• Over 18 years of age.
• A citizen or permanent resident of Australia.
  
• Able to prove their income and employment.
  
• Able to show sufficient savings and have an asset they can put up as security against the personal loan.

Secured guarantor personal loans

When a family member or friend acts as guarantor, they may choose to use their car, property or other valuable asset as security for the personal loan. This means that if you’re unable to repay the loan, the lender has the right to seize and sell the asset to cover the cost of the loan.

A secured loan is less risky for the lenders, which often means they’ll offer a lower interest rate and may allow you to borrow a larger amount than would be available to you if the loan was unsecured.

Unsecured guarantor personal loans

In the case of an unsecured guarantor personal loan, you and your guarantor don’t need to provide an asset as security against the loan. Instead, the lender looks at the credit history of both you and your guarantor, and your ability to make repayments.

The good news is your guarantor’s personal assets are safely out of the firing line if you default on the loan. But if you can’t make repayments, the credit rating of both you and your guarantor will be affected.

A low credit score will make it harder for both of you to obtain loans or credit in the future. This could impact not only your financial health, but also the health of your relationship with your loved one.

Lenders tend to view unsecured guarantor personal loans as riskier, which means they come with a higher interest rate than secured guarantor personal loans. Spend some time comparing the different types of loans on the market before you decide on a secured or unsecured personal loan.

For guarantors: Things to consider

Going guarantor for a loved one brings with it the emotional satisfaction of knowing you are helping them achieve their goals and take control of their finances.

Before you take on this financial responsibility, make sure you understand exactly what you’re getting into. Here are some things to consider:

• If the borrower cannot make repayments, you will be responsible for paying back the loan, including interest and fees. If you are unable to pay it back, the lender may take the asset you nominated as security, such as your car or home, to cover the cost of the loan.
• If things don’t work out, it could damage your relationship.
  
• Going guarantor on a personal loan will appear on your credit record, even if the borrower repays the loan on time. This could affect your ability to secure loans and credit in the future.
  
• If the borrower misses a payment, it could be listed as a default on your credit report. A low credit score makes it hard for you to take out a loan in the future.
  
• Could going guarantor impact your own long-term financial goals, such as retirement?
  
•  Are you better off gifting the money or loaning the funds directly to your loved one?
  

If you’ve decided to go ahead as guarantor, make sure you do your homework to safeguard against any nasty surprises down the track.

• Take the time to understand the loan conditions, including the amount, interest rate, fees and loan term.
• Consider the security of your loved one’s current income and employment. Are they at risk of defaulting?
  
• Calculate how much you’d have to pay if the borrower defaulted and how this might impact your own financial health.

It’s always a good idea to seek your own legal and financial advice to make sure a guarantor personal loan is the right decision for all parties.

There’s no doubt about it, sometimes you need a loan to get ahead in life. Perhaps you’re working as a casual while juggling studies or a family. We get it. Even though you might need to provide extra reassurance that you can make repayments as a casual worker, there’s still a good chance you will be eligible for a personal loan. 

Before you apply for a personal loan, ask yourself these questions:

• Can you prove you’ve been consistently employed for a considerable amount of time? You may need to show pay slips and a letter from your employer.
• Does your income exceed the minimum income criteria? To be eligible for a Plenti car loan, you must earn over $25,000 per year from a provable, regular source of income.
  
• Can you show proof of savings? If lenders can see that you’re capable of setting aside money for loan repayments, they’re more likely to view you as a trustworthy borrower.

Improve your chances

If you work as a casual, lenders will look at your credit score, employment history, income, expenses and other debts to determine whether you have the ability to make repayments. Check out these 3 things you can do to improve your chances of qualifying for a car loan:

• Select a less expensive purchase so you can borrow a smaller amount
• Save for a deposit so you can borrow a smaller amount
  
• Check and improve your credit score
  
• 
  

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you’re a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you apply for a personal loan. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit 
  

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

Don’t lose heart

If you are not approved for a personal loan, there are other options available. You could apply for a secured personal loan, instead of a personal loan. With a secured personal loan, the lender uses something that you own or are purchasing as security against the loan. This means if you can’t make repayments down the track, the lender can repossess the item to cover the costs of the loan. 

Alternatively, you could apply for a guarantor personal loan, where you have a family member or friend co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Having a guarantor on your personal loan might improve your chances of being approved because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might also be able to secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan.

Can I get a personal loan if I work part-time?

Are you working part-time while juggling different responsibilities, and still trying to get ahead? We get it. Even though you might need to provide extra reassurance that you can make repayments as a part-time worker, there’s still a good chance you will be eligible for a personal loan.

Before you apply for a personal loan, ask yourself these questions:

• Can you prove you’ve been consistently employed for a considerable amount of time? You may need to show pay slips and a letter from your employer.
• Does your income exceed the minimum income criteria? To be eligible for a Plenti car loan, you must earn over $25,000 per year from a provable, regular source of income.
  
• Can you show proof of savings? If lenders can see that you’re capable of setting aside money for loan repayments, they’re more likely to view you as a trustworthy borrower.

Improve your chances

If you work part-time, lenders will look at your credit score, employment history, income, expenses and other debts to determine whether you have the ability to make repayments. Check out these 3 things you can do to improve your chances of qualifying for a personal loan:

• Select a less expensive purchase so you can borrow a smaller amount
• Save for a deposit so you can borrow a smaller amount
  
• Check and improve your credit score
  

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you’re a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you apply for a personal loan. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit 

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a personal loan and securing a competitive interest rate.

Don’t lose heart

If you are not approved for a personal loan, there are other options available. You could apply for a secured personal loan, instead of a car loan. With a secured personal loan, the lender uses the car that you purchase as security against the loan. This means if you can’t make repayments down the track, the lender can repossess the car to cover the costs of the loan. 

Alternatively, you could apply for a guarantor personal loan, where you have a family member or friend co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Having a guarantor on your personal loan might improve your chances of being approved because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might also be able to secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan.

Life happens. Sometimes unexpected emergencies arise that put us in a tricky financial situation. Maybe you have a history of making late payments to lenders, or perhaps you simply haven’t built up enough years of credit history. No matter how you got there, it’s worth understanding how a low credit score can affect your ability to get approval for a personal loan.  

A typical credit score will fall between zero and either 1000 or 1200, depending on the credit reporting agency. A score that falls below 629 is generally described as ‘poor’. A poor credit score may impact how much you can borrow, the interest rate you are offered, as well as other loan features. 

The good news is that while a poor credit score can make borrowing money for a personal loan challenging, that doesn’t mean it can’t be done. Many lenders are willing to provide personal loans for people with poor credit scores, as long as they feel sure you’re able to make repayments regularly without falling into financial difficulty. 

Plenti can tailor a personal loan solution to suit your circumstances, including competitive rates and flexible features, even if you have poor credit. 

How much can I borrow if I have poor credit? 

Just as everyone is different, every personal loan is also different. The amount you can borrow will depend on your individual life circumstances, including your income, expenses and other debts. 

Take the time to work out how much you can afford to pay each month on top of your current expenses. You can crunch the numbers on this useful calculator on the MoneySmart website. 

Remember, every time you apply for credit (including credit cards, personal loans and personal loans) it affects your credit score. Find out which lenders are likely to approve your loan before you submit an application to prevent a black mark on your credit report. You can do this by contacting the lender to make an initial enquiry, rather than submitting a full application. 

When considering your application, lenders will take into account:

• Credit history
• Income
  
• Other debts
  
• Every-day expenses
  
• Loan amount
  

Will my personal loan be secured or unsecured?

Even if you have a poor credit score, the lender may agree to offer you a secured personal loan. This type of loan is usually secured by the car itself. This means if you can’t make repayments, the lender can take the car and sell it to recover the cost of the loan. 

An unsecured personal loan, on the other hand, does not require an asset to be provided to secure the loan, so it is considered riskier for the lender. Keep in mind, even if you are approved for an unsecured personal loan, there is always the possibility of the lender taking you to court if you default on the loan. In this situation, your credit rating would be negatively impacted. 

How can I find my credit score?

You can get a copy of your credit report and credit score for free every 3 months. Check your credit report by contacting one of these credit reporting agencies:

• Equifax: phone 138 332
• illion: phone 132 333
  
• Experian: phone 1300 783 684
  

Simply call to get your credit score on the spot or access your report online within a day or two. You could have to wait up to 10 days to get your report by email or mail. Checking your credit report will NOT impact your credit score.

Alternatively, you can find out your credit score online for free through government financial guidance site Moneysmart, or financial comparison sites like Canstar.

How can I improve my credit report?

There’s no doubt about it, having a positive credit report makes it much easier to get approved for a personal loan. The good news is it’s easy to build and polish your credit history and you don’t need to take out a credit card to do it. 

Simply by paying your bills on time, such as mobile phone and electricity, you will start to build a positive financial report. Think about setting up direct debit payments for these bills so that you always pay on time. 

Consider lowering your credit card limit and try to pay more than the minimum repayment. Remember, applying for multiple loans over a short period of time can look bad on your credit report. Reducing the number of applications you make for credit will improve your credit score over time. 

Which lenders offer personal loans to borrowers with poor credit?

Peer-to-peer lenders

When you’re researching personal loans, it pays to look beyond the ‘Big Four’ banks. Online lending platforms, also known as peer-to-peer lenders, often provide a faster approval process and lower interest rates than traditional lenders. 

This type of lender, also known as ‘peer-to-peer’ lending or marketplace lending, allows you to seek a loan from a private lender. All P2P lenders set their own loan requirements and terms. 

If you have a poor credit score, it’s possible that your personal loan will come with higher interest rates and fees, so it’s a good idea to check the comparison rates of various lenders to make sure you find the best loan option to suit your needs. Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. It gives you a more accurate understanding of the cost of your loan. 

Financial comparison sites like Canstar, Ratecity, InfoChoice and Mozo can help you find and compare the best deals on personal loans quickly and easily, including loans offered by P2P lenders. 

Banks and credit unions 

Some banks and credit unions may approve personal loans for people with poor credit scores, but only if they meet their additional strict criteria. You probably have a long history with your bank through your savings accounts, which might help if you have no credit history or a poor credit score. A traditional personal loan from a bank or credit union can be secured or unsecured. 

Guaranteed security

Having a family member or friend with good financial status and credit history act as a guarantor application could improve your chances of being approved for a personal loan if you have no credit score yourself. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might even be able to borrow a larger amount and secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

But remember, it’s a big responsibility for both of you. If you can’t make repayments down the track, your guarantor will need to foot the bill, which could damage your relationship or impact family dynamics. 

Make a move.

The first step in applying for a Plenti loan is to request a RateEstimate. It only takes around 1 minute to complete and will quickly tell you whether you’re eligible to apply for a loan with Plenti. It will also provide you with an estimate of the fees, charges and interest rate that may apply to your loan. 

If you’re happy with your rate estimate, we’ll typically finalise successful loans within a day or two of receiving your complete application. It’s that simple! 

Remember, requesting a free RateEstimate won’t impact your credit score and there’s absolutely no obligation for you to proceed with a loan application. 

Make the first move and you could be getting ahead sooner than you think.

Are you in the market for a car loan but you know there are black marks on your credit report? Or perhaps you’re young, new to the workforce and have no credit history. Either way, you might be wondering whether guaranteed car loan approval is an option for you.

In Australia, the National Consumer Credit Protection laws prevent lenders from offering guaranteed approvals to loan applicants. It might sound harsh, but the laws are in place to protect you by ensuring loan providers practise ‘responsible lending’. This means they must assess your current financial situation, how much you want to borrow and your ability to repay the loan without creating financial hardship down the track.

Even though guaranteed approval is not available in Australia, there are other options for people with bad credit or no credit, so don’t lose heart.  

Some lenders are willing to provide car loans for people with bad credit scores or no credit history as long as they feel sure you’re able to make repayments regularly without falling into financial difficulty.

Plenti can tailor a car loan solution to suit your circumstances, including competitive rates and flexible feature, even without a good credit score.

It’s worth taking the time to understand the differences so that you can choose the loan that best suits your unique life circumstances. 

Two key differences

A car loan is actually a special type of personal loan, but there are two key differences between them. 

Firstly, a personal loan can be used to pay for almost anything, from a car or holiday to dental work or school fees. A car loan, as the name suggests, is specifically designed for the purchase of a car. 

The second key difference is that a personal loan can be secured against something of value, but it’s more likely to be unsecured. An unsecured loan means if you’re unable to make repayments down the track, the lender won’t seize your valuable assets (such as a property or jewellery) to cover the costs. 

A car loan, on the other hand, is generally secured against the vehicle you intend to purchase. If you’re unable to make the repayments on your loan, the lender has the right to seize the car and sell it to make up the shortfall on the loan. 

It’s worth weighing up the pros and cons of both loan types to decide which is the best option for your budget.

Pros and cons of a personal loan

Personal loans are usually more flexible than a car loan because they allow you to borrow for a wider variety of purposes. When selecting a personal loan, you can choose between an unsecured or secured loan, a fixed or variable interest rate, and a shorter or longer loan term. 

Personal loans sometimes come with the option to make additional repayments so that you can repay the loan early or redraw from the extra funds to make other purchases. 

Unsecured personal loans tend to be more common than secured personal loans, but the downside is they come with a higher interest rate. This is because the lender views them as more of a gamble than a secured loan, so they apply a higher interest rate to offset the risk.  

To qualify for an unsecured personal loan, your lender will want to make sure you have a good credit history and a solid income so you can repay the loan without falling into financial difficulty. 

A car loan is generally secured against the vehicle you are purchasing. This means if you miss your repayments or default on the loan, your car will be in the firing line. The lender has the right to repossess the car and sell it to cover the cost of the loan.

With your car acting as collateral for the loan, your lender will view the loan as lower risk which generally means they’ll apply a reduced interest rate. A secured loan also comes with fewer lending requirements, making it easier for people with an average credit history. 

Most car loans come with a fixed interest rate. This means you’ll be protected from market fluctuations and can easily budget as the repayments never change throughout the life of the loan. On the downside, a secured car loan with a fixed interest rate usually doesn’t come with the flexibility to make additional repayments or pay the loan back early. 

Some lenders will offer unsecured car loans with variable interest rates, but these are less common. 

So, which one is right for me, if I’m buying a car?

When it comes to choosing between a personal loan and a car loan, there’s no one-size-fits-all. There’s no doubt that obtaining a car loan is generally swift and convenient. But before you put your foot on the accelerator (see what we did there?) it’s worth taking the time to ask yourself these questions:

• Is my financial situation going to change over the life of the loan?

If you know your income and expenses will remain largely unchanged in the coming years, you might decide to go with a car loan so you can take advantage of the fixed repayments. However, if you’re planning some big life events, such as buying a home or getting married, you might be better off with a personal loan with more flexible terms. This could mean you choose higher repayments for the first couple of years and then go back to minimum repayments when you’re navigating some significant life changes. 

• Have I chosen the car?

When you apply for a car loan, you may need to provide the details of the car, including the make, model and VIN number. If you’d rather have the funds in the bank before you go car shopping, a personal loan might be a better option. But remember, you can always apply for pre-approval on a car loan. This doesn’t guarantee you a loan but gives you an idea of what the lender is willing to lend you once you’ve chosen your car. 

• Do I have collateral for a secured personal loan?

If you want a secured personal loan with a lower interest rate, you’ll need to provide an asset as collateral. This could be your home, another vehicle or any other valuable item. 

• Is my credit score healthy?

If you have a mediocre credit score or you know there are some black marks on your financial report card, you could be better off applying for a car loan. Lenders consider car loans to be less risky because the car is used as collateral against the loan. This means that even borrowers with average or poor credit scores can find a lender who’s willing to offer them a chance. 

Applying all the pros and cons to your individual financial situation means you can move forward  knowing you’ve made the best choice for your budget.

Vendors and installers at Plenti have four main points of contact they can reach out to if they need assistance with anything.

Business Development Managers

Your BDM is there to help and assist you with anything you may need. Reaching out via a phone call is the quickest way to get in touch – you may also send an email. Contact information for BDMs can be found here.

Relationship Managers

Like BDMs, your RM is also there to support you and assist in answering any questions you may have. Phone calls are the best way to get in touch, but their inboxes are also open for emails. Contact information for RMs can be found here.

Broker Support

For any general enquiries, you can reach out to Renewable Support via phone at 1300 502 028 or email at greenfinance@plenti.com.au. 

Live Chat

Plenti also supports a Live Chat function within the Broker Portal – once you gain access to the portal, you can chat with Broker Support live.

In the coming weeks, clients will be able to use their loan amount to cover comprehensive insurance made to cover the unique requirements of EVs such as battery and charger damage cover. If your clients choose to purchase insurance through Plenti's preferred partner we will be able to offer a discount. 

We will also be launching an extension of our EV product whereby your clients will be able to borrow additional amounts to purchase EV-related infrastructure such as chargers, downloadable vehicle upgrades and other accessories either at establishment or during the term of the loan.

All electric vehicles and plug-in hybrid cars are eligible for this rate. Learn more about the difference between an electric vehicle and a plug-in hybrid. 

When filling out a car loan quote for your client, simply select EV or plug-in hybrid and the discounted rate will be automatically applied. 

If you would like to double check whether the vehicle your client has purchased qualifies, you can take a look at the vehicle details section of an application in the "in progress" tab of the Broker Portal. 

You can also check whether the discount has been applied under the estimated rate and fees section of an application.

Your BDM is here to answer any further questions you have about this competition.   

The competition runs for three months - from the 1st of November 2021 to the 31st of January 2022. 

On average, the range on an electric vehicle (EV) is between 300-400 km. More affordable EVs typically have shorter ranges, such as the MG HS EV, which has a 263 km range. Higher-end electric vehicles tend to have longer ranges, such as the Tesla Model S, which has a 500 km range.

Plug-in hybrid electric vehicles (PHEVs) tend to have much shorter electric ranges, as they are powered by both an electric battery and petrol, meaning you can go short distances using electricity and longer distances using the petrol or diesel engine. PHEVs can typically travel 40-90 kms on electric power. These vehicles also offer the benefit of greater fuel efficiency when the petrol engine is running, as the electric engine is engaged during stop-and-start traffic.

While these ranges may seem short, keep in mind that the average Australian driver travels about 36 km per day, meaning the average person could charge their vehicle just once a week while commuting as usual.

Data sources: 
Electric Vehicle Council: state of EVs
Electric Cars Guide: How far can electric cars go? 

It’s a common misconception that driving and maintaining an electric vehicle (EV) is more expensive than driving a car with a traditional combustion engine. In reality, the total costs are very similar. The estimated costs of maintenance and service on an electric vehicle are around $300-400 per year.

Because they involve fewer moving parts, they require less maintenance. There are no filters, spark plugs, oil or transmission to worry about. While drivers do need to factor in the cost of the electricity to charge their vehicle, these costs are typically around $600 per year for someone who drives 15,000 km annually. That adds up to a savings of around 72% on petrol alone.

Batteries typically last the lifetime of the vehicle and rarely need to be replaced. Still, most manufacturers offer a 10-year warranty on their batteries. In addition, the prices of replacement batteries are falling significantly and are expected to drop by around 65% by 2030.

^{Data sources: 
Cars Guide: Cheapest electric car in Australia
ABC: Cost of electric vehicles over time
EV Central}

You sure can!

Check in fortnightly for new blooper reels here.

Applying for a personal loan is quicker and easier than you might think.

Find out whether you are eligible

Whether or not you are eligible to get a personal loan, and how much you can borrow, varies from lender to lender, from loan to loan.

At a minimum, you need to: 

• Be at least 18, sometimes 21 or over
• Be an Australian citizen or permanent resident, although some lenders do loan to people on temporary work visas such as 457
  
• Be earning at least $25,000 per year, sometimes more, from a regular source of income that you can demonstrate
  
• Have at least a provisional or full driver’s licence
  

Some lenders, although not all, will consider:

• Applicants with existing loans or debt (there may be fewer options)
• The self-employed, usually with additional criteria
  
• People on a low income, the pension or Centrelink payments
  

Be sure you check the eligibility criteria for any lender you are considering to avoid impacting your credit score on an application you would never have been approved for.

What is the process

Once you have shortlisted lenders you can usually get a quote or estimate of your estimated borrowing power and some loan options, before you apply. 

Depending on the lender, you can then apply online, over the phone or in-person if the lender has physical branches. You’ll usually need to verify your identity, connect to your online banking to verify your income and expenses and potentially provide additional information based on your loan purpose.

If approved, you’ll need to accept your loan agreement. The majority of personal loans can be signed and accepted electronically.

What documents will you need

The documents lenders need to process your application vary, but usually it will include:

• Proof of identification: Australian drivers licence or a passport and some bills for proof of your address
• Verification of your income: payslips, bank statements or tax returns
  
• Showing your expenses and liabilities: via bank, credit card and loan statements
  

Some lenders, such as Plenti, have a streamlined online portal, where you can connect to your bank and share your data securely. This makes the process much quicker and easier.

What will your lender consider

Your lender will review:

• Your employment stability
• Your income (e.g. salary, rent, interest, etc.)
  
• Your expenses (e.g. mortgage, groceries, etc.)
  
• Your repayment history
  
• Credit agency/bureau information (credit report and score/rating)
  

These determine if you’ll be approved and for how much. If you’ve had problems paying your bills and debts in the past, you may only be offered loans at higher rates.

Improve your chances of getting approved

Applying for a personal loan has the potential to impact your credit score, particularly if your application is declined. Therefore, it's important that you put your best foot forward before beginning the application process. We’ve assembled a useful selection of tips to help you submit a strong loan application.

Make sure you pay your existing debts on time

Did you know that repayments that are more than 14 days late may be recorded on your credit file? While less serious than a default, a series of late repayments can have an equally negative impact on your credit score. Making late repayments also sends a bad message to a prospective lender and may result in you paying higher interest rates.

If you do ever find yourself behind on your repayments, it’s important you contact your lender directly. Working with your lender toward a mutually beneficial outcome can help to protect your credit score. Remember, it’s far easier to protect a good credit score than it is to improve a weak one.

Only request as much as you need to borrow

When assessing your application, a lender will look at whether you can service a loan. Essentially, this evaluates whether, after all your expenses, you have income left over to meet the repayments of your proposed loan. If you request an amount that is more than your finances suggest you are able to repay, it’s highly unlikely you will get approved.

In some cases, a lender may offer you a longer loan term to reduce your repayments, but it’s best to do your homework first. Use a repayment calculator and budget to figure out what you can reasonably afford.

Review your credit history

Australia has three main credit bureaus, Equifax, Illion, and Experian. You can request a free copy of your credit score once a year. Once you’ve verified your identity (i.e. with a driver’s license, passport etc.) the bureau is required to provide you with your credit report within 10 days. Your credit report will provide an overview of your credit history, including previous loans, existing debts, and your performance as a borrower.

You should ensure all the information contained in your credit report is accurate, and if not, contact the bureau to have it remedied. This will have a direct impact on your credit score. If you’re unsure of how to interpret your credit score, see this ASIC guide.

Pay down existing debts

Lenders may look unfavourably on an application for individuals with large amounts of debt, particularly if the debts are already at the limits of what they can afford. It’s important to demonstrate a concerted effort to repay your existing debts to a reasonable level. This applies even if your personal loan is for the purpose of consolidating your debt.

While a move to lower interest rates makes sense, it may be harder to get approved unless without opening up some additional capacity between your income and expenses.

Minimise your credit card balance

Using a credit card can be a great way to help boost your credit rating by demonstrating you are financially responsible. However, you need to manage your credit card carefully to ensure your balance is consistently low. Failure to make repayments can have an equally negative impact on your credit score.

Finally, lenders are now required to assess your application based on your credit card limits, not the outstanding balance. If you have unused cards or excess limit, look into reducing them before you apply for a new loan.

At Plenti, we assess your loan application in line with our credit criteria and our responsible lending obligations. Whilst no guarantee, following the tips above will go a long way to improving the prospect of successful loan approval.

You may have your personal loan approved within a minute, or it can take as long as a couple of weeks. Most digital lenders process and approve applications within 24 hours, provided all documents have been submitted. If you are approved, the funds will usually be deposited in your nominated everyday account or paid out directly to a nominated party (e.g. car dealer, credit card provider etc). This will generally take one business day.

A debt consolidation loan is very similar to a personal loan, with one key difference: it’s there to help you pay for what you’re already paying for.

If you have multiple debts – such as a credit card debt, car loan, medical bills, bank overdraft charges, and so on – managing all your monthly repayments can feel overwhelming. Debt consolidation loans let you roll all of your debts together and pay them off together ­– in one handy payment and usually at a more competitive interest rate.

Lighten your load
Debt consolidation is a way of streamlining all the money you owe. These loans generally allow you to enjoy a lower interest rate than you would receive with a credit card. You'll no longer have the hassle of multiple monthly payments and you also might be able to make early repayments if your bank balance is looking healthy. This may mean you can pay down your debt faster, helping you save in interest and getting you out of debt sooner.

But just like any other personal loan, they come in a few different shapes and sizes. Here are the two main ways to tell them apart.

Secured or unsecured
You can often access a better rate if you’re willing to put up an asset as security against the loan. Just remember, with a secured loan, the lender has the right to repossess the asset if you can’t repay the debt.

Fixed or variable
If you’re looking for complete control over your money, you can choose to fix your loan, meaning you’ve locked in your interest rate and you can work out the exact total cost of your loan, down to the cent. Or you can keep the rate variable and see where the market takes you.

How much can I borrow?
You can borrow between $2,000 and $50,000 or more, across a range of loan terms, from 1 to 7 years. The loan is paid back in regular instalments (weekly, fortnightly or monthly) with interest, which may be fixed or variable across the life of the loan.

Just as everyone’s taste in vehicles is different, there is no one-size-fits-all when it comes to car loans. While not quite as much fun as a test drive, you do need to do your homework to find the one best suited to your needs.  

How can you decide which is right for you? You will first need to make a few key decisions.  Planning and considering your situation upfront will help when comparing what car loan products are going to be the right match, and offer you the best value.

1. Loan amount: How much do you really need?
To decide how much you need to borrow, do some research and budgeting to work out how much (approximately) you are going to need for your next car. It’s smart to only borrow what you really need, rather than all that may be offered to you by a lender. Remember, when you borrow money to pay for something, the actual ‘cost’ of that item becomes much higher when you factor in the cost of the loan.

For example, if you borrow $20,000 to buy a vehicle with a 5-year Unsecured Loan and a fixed interest rate of 12.50%, once you factor in interest and fees that car may actually cost you around $27,417.

2. Repayments: How much can you afford to repay?
Look at your everyday budget, or create one, to see how much you can realistically afford to put towards car loan repayments. It’s always good to give yourself a buffer; failure to make a repayment at any time can cost you a lot in fees. Of course, it isn’t good for your credit rating either.  Are you expecting any major expenses or changes in income in the next few years, changing where or how much you work or perhaps hoping to have a baby? Be sure to build this in.

Whether you receive your income weekly, fortnightly or monthly, you need to know how much you have leftover at the end of each pay period and how this will align with your repayments. This is to ensure there are no missed payment surprises. It may be worth opening a separate bank account for your repayments and transferring these funds in on payday so you are never caught out.

3. Loan term: How long will you need to repay?
Divide the total amount of your ideal car loan amount by your planned monthly repayment to get a ballpark amount of time you’ll need to repay the loan. For example, Jo wanted to borrow $24,000 to pay for a larger work vehicle. Based on his salary and existing expenses, he thought $120 per week / $480 per month would be an affordable repayment. This would be $5,760 per year, meaning in 5 years he’d have paid $28,800 — roughly the full amount, accounting for interest and charges.

A longer-term loan might seem attractive as it means lower monthly repayments, however, the overall (lifetime) cost of the loan is significantly higher because you’ll pay more in interest, and potential fees. That being said, provided you look for a loan with flexible repayments, you’ll be able to take advantage of any future increases in salary that may allow you to pay down your loan faster without penalty.

4. Loan type: Decide between a secured or unsecured loan
Do you have an asset that you are willing, or able, to put up as security against the loan? Perhaps property, or the new car you’re planning to purchase itself? If you are confident in your ability to repay the loan, then a secured loan will get you a better rate and may unlock access to greater funds. The newer the car, the lower your rate will be.

Be aware however that your asset will be at risk if you can’t make the repayments, and not all cars are suitable as a secured loan asset.

5. Compare: Start to request and examine your personalised offers
Now you know roughly how much you need to borrow, what you can afford as a repayment and how long you’ll need to repay your car loan. Next, you can start to plug these values directly into lender or comparison sites to get an estimate of your personalised interest rate and repayments. 

Experiment with different combinations, such as different loan terms or repayment amounts, and match them against your needs. Need more help deciding? There are many third-party agencies (that don’t sell loans) that rate and compare a broad range of loans.

Canstar is one of the most established financial comparison sites, and they’ve been comparing products without bias since 1992. They release annual star-ratings for a range of personal loans from many providers.

To do this, Canstar comprehensively and rigorously examines a broad range of loans available across Australia.  To come up with an overall score, they award points for:

• Price — comparative pricing factoring in interest and fees.
• Features — like the complexity of the application, the time involved before settlement, product management, customer service and loan closure.

These are then aggregated and weighted to produce a total score. This means Canstar’s ratings are reputable and transparent, so you can trust the information they provide, but still dig deeper if you want to.

Other comparison sites can also be useful, however, you should always check around, as some may have a ‘sales’ element — that is they may receive money for the people that visit their website en route to a particular lender. So if the best rate isn’t offered it may not show up on their comparison.

They also have ‘promoted’ or ‘featured’ loans, which they are paid to highlight, even if those loans do not truly reflect the best value car loans on the market. 

Another way to get information on your lender and loan is to read feedback from real,verified customers’ on ProductReview.com.au.

What questions should I ask to choose a car loan?

Here’s a useful checklist to be confident you understand your loan.

• What is the interest rate and the comparison rate?
• How do these rates compare to other car loans?
• What are the fees and charges? (e.g. upfront, ongoing, early exit)
• What are the terms and conditions? Do the car loan term and loan amount fit your needs?
• Can you afford the repayments?
• Are you comfortable with the lender? Have you checked its reputation and accreditation?

Comparison rates are a good starting point, but you still need to decide what will work best for you. The costs involved are a major factor, but once you have shortlisted a few loans with similar costs, make time for these final checks: 

• Are there flexible repayment options? Usually, you can choose between weekly, fortnightly or monthly repayments according to what suits your pay cycle. However, not all lenders offer this. It may matter to you, it may not. 
• Compare a car loan’s conditions and fees around making extra repayments and paying the loan off before the end of the term. This can be a great way to reduce the overall cost of your car loan - but not if you’ll incur extra penalties. 
• Can you use the funds for the car you plan to buy? You can’t always use the borrowed money for whatever you like. For example, if you are taking out a secured car loan, you’ll only be able to spend the loan funds on a vehicle that meets the lender’s criteria. These criteria can mean the vehicle needs to be brand new, and perhaps newer than the car you may be planning to buy. Some lenders don’t allow you to take out a car loan for business purposes. Do make sure your purchase plans match the lender's policies. 
• What are the options for managing the car loan over time? Check and compare how easy the loan will be to manage with regard to repayments, your personal details, any refinancing down the track. The option to manage your account online is often available, but not always, and some lenders have more functionality than others. Using direct debit for repayments is common, yet without it, monthly repayments will be much less convenient and you are more likely to be penalised for late payments if you aren’t perfectly disciplined.

With this homework under your belt, you’re well on the way to being able to compare a range of loans out there, so you can feel confident you’re choosing the right one for you.

It’s important to organise your finances after a marriage breaks down. Property settlements can be done after you divorce, although it’s a good idea to begin when you separate. The process is the same whenever it happens, although if you wait until after your divorce there are some rules you need to know. Let’s take a look at what’s involved in separating your finances.

Start with financial separation checklist (Australia)

To separate your property, you first need to know what assets and debts you have. A good place to start is using a financial separation checklist for Australia. It should include details about:

• Your home
• Bank accounts
• Investments
• Superannuation
• Vehicles
• Other assets of value such as household goods and jewellery
• Mortgages
• Credit card and other debt
• Hire or rental agreements
• Incomes
• Businesses you run or share
• Other benefits or inheritances
• Non-financial contributions to the relationship

Understanding how a property settlement works

Once you’ve tackled your financial separation checklist, you can make decisions about what you have (also known as your asset pool) and how it will be shared. There are different pathways to achieve this including:

• Litigation – where you and your ex-partner can’t agree and you go to court
• Arbitration – a form of dispute resolution where both parties present their case to an independent third person (the arbitrator) and are bound by their decision
• Alternative Dispute Resolution – mediation, negotiation and other forms of dispute resolution are where both parties come to an agreement on the division of property, rather than going to court

If you and your ex-partner agree on how your property should be divided
You can make an informal agreement, however it won’t be legally binding.You can formalise your agreement by entering a legally binding financial agreement or by applying for consent orders in the Family Court.

If you and your ex-partner don’t agree on how your property should be divided
You can apply to a court for financial orders, where the court decides how assets and debts are divided based on evidence. You must make a genuine effort to resolve the matter by family dispute resolution before applying for financial orders. These are known as pre-action procedures.

Be aware that through these processes you may need to engage with:

• Lawyers
• Court officers
• Valuers
• Accountants to investigate the total value of the asset pool, complicated structures and asset protection schemes
• Non-confrontational alternative dispute resolution (ADR) specialists such as mediators or arbitrators

What you’re entitled to

There isn’t a special formula used to work out what property you are entitled to when you separate. It’s up to you and your partner to work out what you believe is fair. If you can’t come to an agreement and decide to go to court, a judicial officer will decide what is just and equitable based on the unique facts of your case. You can present evidence and they’ll consider for you and your ex-partner:

• What you've got, what it’s worth and what you owe
• Your direct financial contributions to the relationship such as wage and salary earnings
• Your indirect financial contributions to the relationship such as gifts and inheritances from families
• Non-financial contributions to your relationship such as caring for children and homemaking
• Future requirements, factoring in your age, health, financial resources, care of children and ability to earn

How long a property settlement takes

The time it takes to work out a property settlement depends on several factors, including your financial situation, if you and your partner agree, if you proceed with family dispute resolution or if you go to court. It can be completed in a matter of weeks or it could take years.

However, if you haven’t worked out a property settlement while you’re separated, there is a property settlement after a divorce time limit. You have until one year from the date your divorce order has taken effect to apply for a property settlement. If you’re wondering: ‘when can I get a divorce?’ You must be separated for 12 months before you can apply for a divorce.

Find the support you need

Legal advice
It’s important to get quality, independent legal advice. You can ask trusted friends and family for referrals or you can search for a family lawyer in your state.

Mediation
If you are unable to reach an agreement with your ex-partner, mediation is a good alternative to going to court. Consider using an accredited Family Dispute Resolution practitioner. Just remember, mediators don’t give advice – they’re there to help both parties resolve the dispute. You should still obtain your own independent legal advice.

Arbitration
You could also try using an Arbitrator – an independent person who can make binding decisions on dividing your property.

Family Dispute Resolution
And remember, if you plan to go to court, you need to genuinely attempt family dispute resolution, before filing an application.

How to pay your family lawyer fees

The best way to pay for your family lawyer depends on your personal circumstances. Here are three ways to pay for a lawyer to consider.

Paying outright 
An obvious place to start is looking at the funds you have available. You may be able to pay outright with money you already have. However, sometimes your money may be tied up in your property settlement, meaning you may need to seek an interim (short-term) order from the court to be given a lump sum of funds from the property pool prior to the final settlement. You might also not want to use your funds for other things.

Personal loans
You may want to borrow money to pay for your legal fees. Although some people borrow from family or use their credit card, a personal loan can be a good option if you don’t have a settlement to worry about and you’re confident you can meet the loan terms. A personal loan gives you the ability to repay the money over time – lenders usually offer loan terms between 1 and 7 years. It’s important to understand that you’ll likely have to pay an upfront fee to establish the loan and you’ll need to start making your monthly repayments straight away. You should also be aware of any penalty fees that may apply (say, if you miss a monthly repayment) and if you’ll be charged for repaying the loan in full prior to the end of the loan term fee (an early repayment).

Legal fee loans
A legal fee loan is a special type of personal loan designed specifically to help you pay for family law matters, so it works a little differently. A form of asset-based lending, you can usually borrow up to 30% of the expected property settlement. You can borrow what you need, when you need it (so you don’t need to draw down the full amount upfront) and you only pay interest on what you use. Plus they don’t require regular repayments – you only need to repay the loan once you’ve received your property settlement.

Buying a car with finance? You’ll need to decide if you want it to be a secured car loan or unsecured car loan. 

Borrowing money to buy a car is a managed risk – for both you and the lender. That’s why lenders offer different two basic types of loans – a secured car loan and an unsecured car loan. Which one you choose can affect how much you’ll be paying and the interest rate you’ll be charged. Let’s take a closer look at the type of loan that might be right for you.

What is a secured car loan?
With a secured car loan, you put your money where your motor vehicle is. That is, the loan is secured against the car you’re buying. So if you fail to make your repayments, the lender can sell your car to recoup its money. It’s a lender's way of knowing they won’t lose out if things go south – they have a security blanket.

But they’re usually only available for newer vehicle models since they’re more valuable as an asset – typically for a car that’s less than 7 years old with a market value of at least $10,000.

Given that the loan is secured by the value of your vehicle, your lender will ask you to confirm the value of the asset and ensure that its value is protected. You will be asked to do this by:

• Informing your lender of your new vehicles chassis number, vehicle identification number (VIN), registration number, model & make, year, and colour
• Providing the lender with a copy of your car registration papers
  
• Getting a vehicle inspection (if through a private sale)

What you get
Having security (also known as collateral) means that the lender can offer a lower interest rate for the loan. This can help you save on your repayments, borrow a greater amount or even extend the repayment period longer.

A secured car loan generally comes with a fixed interest rate, meaning you have the certainty of knowing how much your repayments will be over the life of the loan.

What is an unsecured car loan?
An unsecured car loan is all about trust (and good judgement). There’s no asset put up as collateral, so a lender will decide whether or not to give you a loan based solely on how creditworthy you are. If you fail to make repayments or defaults on your loan, the lender must sue you to get back what you owe them.

They’re riskier for the lender, so they usually come with a higher interest rate. You’ll also likely face stricter eligibility requirements including a good credit score history.If you’re looking to borrow a smaller amount for a new or old car and know that you’re able to make the repayments, then an unsecured loan might be for you. It might be your only option if you’re buying an older car or one that’s worth less than the value of the loan.

What you get
Unsecured loans generally have shorter loan terms (up to 5 years) and a lower maximum loan amount (up to $50,000). But on the upside, there are fewer restrictions on how you spend the loan funds. So you may buy a vehicle of your choice, regardless of age. You also have the flexibility to use your loan to pay for other costs associated with buying a car, including:

• Insurance
• Registration
• Tyres
• Aftermarket upgrades
• Roadside assistance
• A pre-paid maintenance agreement

But what about fixed and variable-rate car loans?
When it comes to car loan repayments, you might also have a choice – either a fixed (set) or variable (changing) interest rate.

When it varies
With a variable-rate car loan, the interest rate can change up or down across the life of the loan. They bob with the tide, so when rates go up so will your repayments, and when rates go down, your repayments will too. 

But no one has a crystal ball. So if you’re considering a variable-rate car loan, factor a buffer into your budget, so you don’t feel the pinch of higher repayments if rates do go up.

Fix it
When you take out a fixed-rate car loan, the interest rate is locked in for the term of the loan. They often have higher interest rates than what’s been offered for variable loans. But they give you certainty and help you manage your money because your repayments will stay the same. And if the market does shoot up, you’re protected.

But remember, you may have less flexibility and freedom to make early repayments with a fixed rate, depending on your lender. Although many online car loan providers offer no early repayment fees regardless of whether your loan is fixed or variable. Make sure you check with your lender before you lock it in.

Pros and cons of each loan type:

Why choose a secured car loan?
+  Lower rates
+  Good if you want to buy a new or used car under 7 years old
+  Borrowing potential increased
+  Longer terms available
-  Can take longer to approve
-  More restrictions on what you can buy
-  You can’t use it for other costs (aftermarket upgrades, repairs etc)

Why choose an unsecured car loan?
+  Greater freedom for what car you can buy
+  You can use it for other costs (insurance, registration, etc)
+  Quick application process
-  Higher rates
-  Less borrowing potential
-  Shorter loan terms

Why choose a variable-rate car loan?

+  Usually more flexibility to repay your loan early
+  You’ll benefit from lower repayments if interest rates go down
+  Rates are competitive
-  A rate increase will result in higher repayments
-  Budgeting is harder

Why choose a fixed-rate car loan?
+  Know what your repayments will be for the life of the loan
+  Easier to budget 
-  More likely to have early repayment fees
-  May be less flexible depending on the provider

Choose wisely

When it comes to choosing which loan type is right for you, ask yourself:

• What’s the interest rate like? Before choosing your loan type, you should compare car loan rates to find the lowest possible rate available
• Do you prefer a fixed or variable rate?
  
• Can you realistically make repayments on time?
  

• What is the length of the loan?

Buying a car is a big financial commitment, and it’s important to not only factor in the price of the vehicle being purchased but also the fees that come with a car loan. 

Know your debt consolidation home loan from your fixed-rate unsecured personal loan? You soon will.

Debt comes in many forms. From credit cards to car loans, it can quickly add up. Keeping it under control can be a challenge. That’s why consolidating your debt into just one loan can be a clever idea. It makes life easier with just one loan to pay, and you might even save money on interest, fees and charges. But how do you do it? We talk you through the ins and outs, from a debt consolidation home loan to a shiny new personal loan in all their different forms.

Add to existing debt or start fresh?
When you’re looking at streamlining your finances, you’ll be getting up close and personal with your debt. You might think it’s easiest to simply work with what you’ve got. For many people, that means refinancing their mortgage.

With a debt consolidation home loan, you combine all your outstanding debt into your home loan, essentially increasing your home loan. Just remember, although it makes payments easier, home loans have a longer loan term, so you’ll have a greater number of monthly repayments over time. That means you may end up paying more interest in the long run, costing you more.

If you want to keep your mortgage separate (or you don’t own a home), you can simply take out a personal loan to consolidate your debt.

To secure or not to secure?
If you own something of value like a car, home or term deposit, you can choose to use this as security against a loan. With a secured personal loan, you can usually access a lower interest rate because it’s less risky for a lender to loan you money. You may also increase your borrowing capacity and get a longer loan term. The trade-off is that you give your lender the right to seize your asset if you fail to make repayments.

However, the vast majority of personal loans are unsecured, with no assets used as security against the loan. The lender’s choice to loan you money is based on how creditworthy you are. It’s an educated guess regarding whether or not they think you’ll be able to pay the money back. It’s more risk for them, so you’ll probably be offered a higher interest rate, lower loan amount or a shorter term. But there’s a quicker application and approval process, greater freedom to use the funds and your assets aren’t directly at risk.

Why choose a secured loan?
+  Lower rates
+  Increased borrowing potential 
+  Longer terms available
-  Can take longer to approve
-  Your asset is at risk if you fail to pay

Why choose an unsecured loan?
+  Greater freedom
+  Less borrowing potential
-  Shorter loan terms

And what about fixed and variable rate loans?
Every loan comes with interest, but even then, you still have options.

With a variable-rate loan, the interest rate isn’t locked in. So if the market interest rate goes up, so will your repayments. But on the flipside, when the rates go down, your repayments will too.

If you’re looking for certainty, you can fix your interest at a rate that will remain the same for the life of your loan. You’ll usually be offered a higher interest rate than for variable rate loans. But you’ll know exactly what your repayments are month to month, helping you manage your budget. Plus, If variable rates head north, you’re protected.

Just remember, depending on your lender, you may have less flexibility to make early repayments with a fixed rate. However many online loan providers offer no early repayment fees, regardless of whether your loan is fixed or variable. Be sure to check with your lender before you fix it.

Why choose a variable rate loan?
+  Usually more flexibility to repay your loan early
+ Lower repayments if interest rates go down
+  Rates are competitive
-  Budgeting is harder

Why choose a fixed-rate loan?
+  Know what your repayments will be for the life of the loan
+  Easier to budget
-  More likely to have early repayment fees
-  May be less flexible depending on provider

Anything else to know?
That’s the big things covered. When it comes to personal loans, there are a few other terms you might have heard of.

Fixed-term vs line of credit
With a fixed-term loan, you get the money as a lump sum and agree to pay it off within a certain time period. So you know exactly how long it will take you to pay off your debt.

Alternatively, a line of credit is a type of personal loan that works more like a credit card. You can draw on the funds in the form of an ongoing credit facility and pay off the debt and accrued interest in instalments. The advantage here is that you only pay interest on the money that you actually use, versus the entire amount as would be the case with a personal loan. This is less relevant for a debt consolidation loan. 

Special or limited purpose loans
Some lenders offer personal loans with lower interest rates provided the funds are used for a specific purpose.

Risk-based pricing
Most lenders give a ‘personalised’ interest rate and tailor the loans they offer. They do this through ‘risked-based’ pricing, where the rate provided is based on the probability of a borrower defaulting on a loan. To calculate this, they’ll look at your credit history, financial situation, the loan type, the loan amount and a range of other factors that are used to build your unique risk profile.

If you’re considered ‘low-risk’ and more likely to pay back the loan, you’ll be rewarded with a lower rate. If you’re ‘higher risk’, expect to get a higher rate.

Risk-based pricing has become more common with the introduction of comprehensive credit reporting (CCR). Credit providers are now required to include extra ‘positive’ information such as the type of credit you hold, the amount of credit and whether you pay your bills on time. In the past, credit reports only showed negative credit events or ‘black marks’ (e.g. missed payments or defaults), rather than giving an overall picture.

The choice is yours
When it comes to choosing which loan type is right for you, ask yourself:

What’s the interest rate like? Before choosing your loan type, you should compare debt consolidation loan rates to find the lowest possible rate available

Do you prefer a fixed or variable rate?

• What’s the interest rate like? 
• Before choosing your loan type, you should compare debt consolidation loan rates to find the lowest possible rate available
• Do you prefer a fixed or variable rate?
• Can you realistically make repayments on time?
• What is the length of the loan?

Don’t forget to factor in any fees and charges. Once you have the big picture, you can work out how much you’ll likely save by consolidating your debt into one loan.

From a construction loan for home renovation to a repair bill for a leaky roof, it’s what you need it to be.

A home renovation loan is a type of personal loan that gives you the money you need to make the changes you want to your home. Whether you’re planning your dream upgrade and looking at a construction loan for home renovation, need to build an extension for a growing family or just have a few repairs to make, the choice is yours.

A loan built for you
A renovation loan is separate to your mortgage and is not about refinancing or tapping into your equity. It’s stand-alone finance to help you on your journey to home happiness.

But just like any other personal loan, renovation loans come in a few different shapes and sizes. Here are the two main ways to tell them apart.

Secured or unsecured?
If you’re willing to put up an asset as security against the loan, you can often access a better rate with a secured loan. Just remember, if you can’t repay the debt, your lender has the right to repossess the asset.

Fixed or variable?
For complete control over your money, you can choose to lock in your interest rate by fixing your loan. Budgeting is a breeze because you can work out the total cost of your loan, down to the cent. Rates will usually be a bit higher than with a variable, but you’ll avoid the ups and downs of the market.

How much can I borrow?
You can borrow between $2,000 and $50,000 or more across a range of loan terms, from 1 to 7 years. The loan is paid back in regular instalments (weekly, fortnightly or monthly) with interest, which may be fixed or variable across the life of the loan.

Looking for a home loan with money for renovation? You might want to think of a personal loan instead.

Often your dream home doesn’t start out that way. If you’ve got a project waiting, or you’re considering buying a renovator’s delight, you might be looking for a home loan with money for renovation. Sometimes that’s possible, but it depends on your circumstances. And you might find that a stand-alone renovation loan is a better choice. Let’s look at what’s available.

Isn’t that what my mortgage is for?
If you’re looking for a home loan with money for renovation you’ll need to tap into the equity in your home. You’re essentially refinancing your home and increasing your loan amount to fund your home improvements. But there’s a catch. A few of them, actually.

First of all, you need to think about your loan to value ratio (LVR) – how much is your house worth compared to how much you still owe? If you have a high LVR (where you still owe most of its value) you won’t have the equity available.

Secondly, by rolling your renovations costs into your home loan, you now have a bigger mortgage. You’ll be repaying these borrowings for the life of the loan – that could be up to 30 years. What might seem like just a small difference to your repayments now can add up over time, costing you more in the long run.

You also might not be in the position yet to extend your home loan. If you’re looking to buy a new house, you’ll find that home loans generally don’t include renovation costs. So you’ll need to look elsewhere.

A more personal choice
Rather than mess about with your mortgage, you might like to consider a renovation loan. A renovation loan is simply a personal loan you’re using to fund your renovation costs. And they come with a few choices.

Secured or unsecured?
You can choose to secure your loan against something of value that you own, like a car, home or term deposit. It’s less risky for a lender to loan you money so you can usually access a lower interest rate. You may also be able to borrow a larger amount and get a longer loan term. But on the flipside, you give your lender the right to seize your asset if you fail to make repayments.

However, most personal loans are unsecured, with no assets used as security against the loan. A lender will choose to loan you money based on how creditworthy you are. It’s more of a risk for them, as they have no guarantee.They’ll only be looking at whether or not they think you’ll be able to pay money back. 

Because of this, you’ll probably be offered a higher interest rate, lower loan amount or a shorter term. But the application and approval process are usually quicker, you’ll have more freedom to use the funds and your assets aren’t directly at risk if you default.

Why choose a secured loan?
+  Lower rates
+  Increased borrowing potential
+  Longer terms available
-  Can take longer to approve
-  Your asset is at risk if you fail to pay

Why choose an unsecured loan?
+  Greater freedom
+  Quick application process
-  Higher rates
-  Less borrowing potential
-  Shorter loan terms

Keeping your interest rate fixed or variable
You can also choose what type of interest you’d like to pay, either at a fixed rate or variable.

If you choose to fix your interest at a rate, you can be confident that it will remain the same for the life of your loan. You’ll usually be offered a higher interest rate than for variable-rate loans, but if variable rates go up, you’re protected.

With a variable rate loan, your interest will move up and down with the market. So if the market interest rate goes down, so will your repayments. But, if they go up, you’ll be paying more.

Remember that you may have less flexibility to make early repayments with a fixed rate. But many online loan providers offer no early repayment fees, regardless of whether your loan is fixed or variable. Be sure to check with your lender first.

Why choose a variable-rate loan?
+  Usually more flexibility to repay your loan early
+  You’ll benefit from lower repayments if interest rates go down
+  Rates are competitive
-  A rate increase will result in higher repayments
-  Budgeting is harder

Why choose a fixed-rate loan?
+  Know what your repayments will be for the life of the loan
+  Easier to budget
-  More likely to have early repayment fees
-  May be less flexible depending on provider

Anything else to know?
When you’re thinking about all things loan, there are a few other terms you probably want to be familiar with.

Fixed-term vs line of credit
A fixed-term loan is a traditional kind of loan – you get the money as a lump sum and then pay it off within the agreed time period. You make regular repayments and know exactly how long it will take you to pay back your loan. 

A line of credit is a bit different as it works more like a credit card. It’s up to you when you draw on the funds from your ongoing credit facility – you access the money when you need it. You then pay off the debt (including interest) in instalments. The bonus, of course, is that you only pay interest on the money that you’ve actually used, not the whole loan amount.

Special or limited purpose loans
If you’re using the loan for a specific purpose, you may be able to access personal loans with lower interest rates from some lenders.

Risk-based pricing
With the introduction of comprehensive credit reporting (CCR), credit providers now must include extra ‘positive’ information in your credit report, such as the type of credit you hold, the amount of credit and whether you pay your bills on time. Previously, credit reports didn’t give the complete picture – they only showed the ‘black marks’ or negative credit events (such as missed payments or defaults). 

That means risk-based pricing has become more common. Most lenders now tailor the loans offered to you and give you a ‘personalised’ interest rate. They’ll look at your credit history, financial situation, the loan type, the loan amount and a range of other factors to build your unique risk profile. The rate you get is based on the probability (or risk) of you defaulting on your loan.

If you’re considered more likely to pay back the loan, you’re ‘lower risk’ and you’ll be rewarded with a lower rate. But expect to get a higher rate if you’re ‘higher risk’.

The right loan for you
Feeling a bit spoiled for choice? Keep it simple. Ask yourself:

• What’s the interest rate like? Before choosing your loan type, you should compare renovation loan rates to find the lowest possible rate available 
• Do you prefer a fixed or variable rate? 
• Can you realistically make repayments on time? 
• What is the length of the loan?

Don’t forget to factor in any fees and charges. Answering these questions can go a long way toward making the decision for you – whether you need a home loan with money for renovation or a tailored personal loan.

A legal fee loan isn’t right for everyone or every situation. Legal fee loans are ideal for those in situations where a clear settlement outcome is expected. In cases where there’s no clear expected outcome, or where clients are simply hoping for a positive outcome, a legal fee loan is generally not approved.

Legal fee loans cannot be used by people involved with disputes concerning only parenting matters. However, if you have a property settlement matter as well as a parenting matter, you may still be eligible.

There are a few general requirements you must meet in order to qualify:

• You must be involved with a family law matter
• There must be a property settlement component and a clear entitlement to some property division under the Family Law Act
• You must be able to provide some form of security against the loan
• You must be an Australian resident, with the majority of your assets in Australia

Keep in mind, Plenti is not an unsecured lender for family law loans. Our loans are usually secured against a house or property. In some instances, security may be difficult to obtain, as funds might be in a lawyer’s trust account, however, this is generally not an issue. In cases where there is no security available at all, a legal fee loan is unlikely to be approved. Plenti’s dedicated team will always work with your lawyer to explore all options that may be available.

To work out the overall cost of your legal finance, you need to factor in:

1. Loan Interest Rates: The biggest factor in how much a legal fee loan will cost you is the rate of interest you’ll pay on the amount borrowed. Legal fee loans can come with variable or fixed interest rates. If you are opting for a variable-rate loan, it is best to also calculate a worst-case scenario, one where a loan’s interest rates rise significantly in the future to be sure you have a comfortable buffer in the event things change. At Plenti, our legal fee loan interest rates are always variable. Interest is only paid on the amount outstanding, once a settlement is reached.   

2. Upfront Fees: ‘Establishment’ or application fees for all loans can vary greatly, so it’s an area where shopping around can make a difference. 

At Plenti, we have one upfront fee on our family law loans. The credit assistance fee is 4% on the amount of credit sought. This is a one-off fee capitalised to the loan at the time of the initial drawdown. This means you won’t actually pay the fee upfront, rather, it will be added to your repayments at the time of settlement. 

3. Ongoing Fees: These fees are charged throughout the life of the loan. Common ongoing fees include: 

• Monthly or annual fees (also called account keeping fees)
• Default, dishonour or missed payment fees
• Hidden fees in the terms and conditions of a loan 

At Plenti we never add hidden fees. We charge two types of ongoing fees for legal fee loans: 

• An $80 monthly fee
• A risk assurance charge, which is 5% on every dollar drawn down on the loan
• Some loans also require a security fee, if caveats are required for the security of the loan, these fees are $980 for caveats and $1300 for mortgages

Each of these fees is capitalised to the loan, so you only pay them once you begin making repayments.

To find the true cost of a loan, you can combine the costs of these fees with the interest rate of the loan. As long as you are comparing the same loan terms and amount, a comparison rate helps you to compare the cost of different loans. 

At Plenti, typical borrowers incur effective costs of about 11% p.a. 

Now that you understand the building blocks of a legal fee loan, you’ll be better able to decide which loan suits you. Planning and considering your situation upfront will help when comparing what green loan products are available that might really fit your needs, and offer the best value.

When you’re ready to apply for a legal loan, you’ll want to gather all required documents and information before you begin.  

If you’re applying for a Plenti Legal Loan, you’ll need to be working with a Plenti-accredited lawyer. If you are working with a lawyer who isn’t accredited with us yet, you’ll need to ensure they get in touch with us to do so before we can approve your loan. 

Once you’ve confirmed your lawyer’s accreditation, you should review the eligibility criteria to ensure you qualify. To review, when borrowing with Plenti, you must meet these requirements:

• You must be involved with a family law matter
• There must be a property settlement component and a clear entitlement to some property division under the Family Law Act
• You must be able to provide some form of security against the loan (this is usually via caveat over real property – whether on title or not – but we may consider other forms of security)
• You must be an Australian resident, with the majority of your assets in Australia

In addition, before a legal loan is approved, the matter should have progressed to a point where the main issues in dispute are known and the pool is well established.  Regardless of the size of the loan, it is also important to be able to demonstrate how the loan will be repaid at settlement - i.e. by cash received, selling assets or by a refinance. 

When you apply, you’ll need the following documents to get started: 

• A balance sheet outlining both side’s view of the pool (where available)
• Current mortgage statement for all properties (where available)
• Title searches for all properties (where available)
• Appraisals for all properties (where available)
• Business valuations (where available)

When you’ve reviewed your eligibility and gathered the required documents, you can apply online using our convenient application portal. 

What is an EV loan?

An EV loan is a type of car loan specifically used to buy an electric vehicle (EV) or plug-in hybrid electric vehicle (PHEV). A Plenti EV loan works like a car loan, with a few extra features designed specifically for EV drivers.

Inclusions

• A 0.5% discount on our standard automotive rates
• Loan amounts from $10k to $100k
  
• Loan terms from 3 to 7 years
• No monthly fees
• No early repayment fees
• 100% digital process from rate estimate to settlement

Coming Soon

• Access exclusive discounts with a leading insurer on comprehensive car insurance made to cover the unique requirements of your EV. Your cover can be secured as part of the Plenti EV loan application.
• Top up your EV loan at any time to pay for services and infrastructure directly related to running your EV, such as installing a charger, purchasing a software update or insurance.

When exploring the possibilities of an EV, one of the most crucial considerations is charging. Whilst you’ll most likely come home with your own charger for home use, you’ll also need to be aware of your charging options while out on the open road. 

While close to home, you’ll likely be able to go a few days between charges, especially if your commute is short. However, if you ever venture away on a road trip, you’ll need to ensure your route 

It’s true that Australia has not caught up with some other countries with regard to public charging infrastructure, but things are changing fast. Keep reading to find out where you can find charging stations, both close to home and far away.

How does EV charging work?

Typically, if you purchase an electric vehicle (EV) from the manufacturer, a wall box charger will be included with the purchase. Some manufacturers require you to buy the charger separately. 

There are three ways to charge an EV: 

• With a traditional socket, at home or elsewhere
  This is the slowest option, but it’s a good backup in a pinch. Most vehicles come with a cord that can plug directly into a three-prong wall socket, though some will require an adapter for the plug.
• With a wall box from your manufacturer (AC charger)
  Around 80% of EV owners charge their vehicle this way. Using a wall box charger, your EV will power up much more quickly than with a traditional socket. Boxes are usually installed somewhere around the home, typically in a garage or driveway. There are also several thousand public wall boxes for EV charging across Australia. 
• Fast chargers (DC charger)
  These are the chargers you’ll find at dedicated charging stations. With these speedy chargers, most EV drivers can power up their car in under an hour. Currently, there are 110 fast charging sites across Australia, with more than 250 chargers across them. Certain car manufacturers allow their new EV customers to use their charging networks free of charge, such as Tesla and Mercedes, which utilises the nation’s largest network, Chargefox. 

The easiest way to locate the nearest charging station is using a map like the EV Charger Map from the Plugshare.  

These maps provide detailed information about the location, accessibility and type of charger available.

As the map shows, there are several dozen level-3 charging sites in states like NSW and Victoria, but public charging infrastructure falls short in other states. This is why planning ahead, and knowing exactly where you can recharge next is crucial when planning an extended trip. Let’s review the charging setup in each Australian state. 

Electric vehicle charging stations Sydney

In NSW, there are a total of 783 charging points. Around 150 of them are DC chargers, or “fast chargers” while 630 are AC or “level 2” chargers. Of these chargers, around 250 are in the Greater Sydney region, while others are dispersed across regional and coastal NSW. 

The state is in the process building 1,000 new EV charging sites, so keep an eye out for new locations.

Electric vehicle charging stations Brisbane

In Queensland, there are 395 charging points, 59 DC chargers and 336 AC chargers. 

Queensland has a unique “electric super highway” which includes 31 EV charging sites that stretch from Coolangatta to Port Douglas, and from Brisbane to Toowoomba, allowing EV drivers to confidently travel these routes knowing fast charging is always close at hand.

Electric vehicle charging stations Western Australia

Western Australia has a total of 227 EV charging sites: 25 DC chargers and 202 AC chargers. 

Earlier this year, WA unveiled its plan to build 90 new EV charging points across 45 locations on key travel routes. 

Electric vehicle charging stations Melbourne

In Victoria, there are 536 EV charging points, with 86 DC chargers and 450 AC chargers. A large majority of charging sites in Victoria are located in the Greater Melbourne area.

Victoria plans to expand its EV charging network with 100 new charging points, with 80% of funding being spent in regional areas.   

Electric vehicle charging stations Adelaide

South Australia has 235 charging points, 19 are DC chargers and 216 are AC chargers. The state has announced it will spend more than $13 million to improve its EV charging network. 

Even if you’re no mathematician, you’re probably aware that the earlier you pay off your debt, the less interest you’ll pay overall. There may come a time during the life of your personal loan where you find yourself able to pay the loan off more quickly. Or perhaps you’ve been able to budget and save enough to pay the loan back entirely (high five if this is you!).

Before you throw your ‘debt-free’ party, it’s important to check whether you’ll be stung with an early repayment fee for paying back your loan early. An early repayment fee, or ‘break cost’, is a penalty charged if you pay back more than your fixed monthly repayment or pay the whole loan off too early.

The whole story.

It might seem rough that you’re hit with a fee for your financial diligence, but there is a method in the madness. Early repayment fees are designed to cover the lender’s loss incurred if you end your loan early.

To fully understand why these fees are sometimes imposed, it helps to know the backstory of your loan (cue flashback music): 

1. Your personal loan is approved
2. Your lender borrows money in order to provide your loan
   
3. Your lender uses the interest you pay on YOUR loan in order to make payments on THEIR loan
   
4. You choose to repay your loan early
   
5.  Your lender charges an early repayment fee to cover their losses caused by the interest you will no longer be paying
   

To fee or not to fee?

That’s a good question! It’s worth doing the sums to figure out whether you’re better off suffering the dreaded early repayment fee in order to finish your loan early. You may still be ahead of the game by reducing the amount of interest you’ll pay over the long term.

The fee is usually calculated by looking at the remaining loan balance and loan term. For example, fixed rate personal loans often charge an “economic cost” or “fixed cost” for repaying a loan earlier than expected.

If you’re feeling unsure, call your lender to discuss the early repayment fee so that you know exactly how much you’ll be expected to pay.

The good news.

This is one fee you can avoid.

Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.

At Plenti, we believe in tailoring personal loans to suit your unique financial situation and lifestyle. This means rewarding your strong credit history with attractive rates that are personalised to you and offering the flexibility to pay it back faster. In fact, we’ll never charge you fees or penalties for paying your loan back early.

This means you can increase your scheduled monthly repayment, make an extra payment, or pay off the loan in full at any time without being stung for extra charges.

It’s your life – you’re in control.

We all want tomorrow to be better than today - and most of us have a big idea in mind and know just where we’d like to start. No matter what you’re looking to plan, a personal loan can get you there faster.

The cheapest personal loan is bound to be the one with the lowest interest rate, right? Well, not necessarily.

Up-front fees, ongoing service charges and other hidden costs can make your personal loan more expensive than you bargained for. It’s also important to consider the features of your personal loan. A loan with slightly higher interest rate might allow you to make extra repayments and pay off the loan early, reducing the cost of your loan overall.

Here are some of the extra charges that could apply to your personal loan:

·       Establishment/upfront fee: You could be charged a fee when you apply for a personal loan to cover the cost of assessing your application and preparing loan documents.

·       Service fee: Monthly account keeping fees add up over time. It’s worth calculating the total cost for the life of the loan so you’re not caught by surprise.

·       Late payment fee: Your lender may charge a fee if you default on your loan or miss a payment.

·       Early repayment fee: Do you hope to pay your personal loan off sooner? Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.

·       Other fees: Check out the terms and conditions of your car loan for a full list of fees and charges.

It’s worth taking the time to understand how personal loans work. Finding the right loan for your personal circumstances will help you enjoy your tomorrows even more.

Take your pick

Whether you’re planning to complete your studies, marry in style or take to the water, a personal loan can be a great way to make your dreams come true when you don’t have enough savings to go ahead outright.

Personal  loans usually range from $5,000 to $100,000 with loan terms from one to 10 years. Interest rates can be as low as 2.99% up to 10% for secured loans, and up to 15% for unsecured loans.

The amount you can borrow depends on your financial situation, including your income, expenses and other debts. Lenders will also check out your credit history to assess whether you’re a trustworthy borrower. 

It’s helpful to research your options when deciding which type of personal loan is right for you. 

Fixed or variable interest rate?

When you apply for a personal loan, you have the option to choose between a fixed or variable interest rate.

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation.

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan.

Pros

·       You know exactly how much your repayments are each month.

·       You can plan and budget with certainty, knowing your repayments won’t change.

·       You’re protected from future interest rate rises.

The reality is that most of us have an idea we’d like to make a reality - that will make a real difference to our lives. If you are unable to save enough to go ahead right away, one, a personal loan can help bridge the gap in your budget and keep you moving forward.

Are you one of the growing number of Australians who are self-employed or work as a contractor? If you’re seeking a car loan, you might have to jump through a few more hoops before you can get behind the wheel. But don’t lose heart. Even without a history of stable employment, there are many options to help you hit the road faster. 

Before you apply for a car loan, ask yourself these questions:

• Can you show evidence of a stable income for the past two years?
• Does your income exceed the minimum income criteria? To be eligible for a Plenti car loan, you must be able to prove that you earn over $25,000 per year.
  
• Can you provide proof of savings? If lenders can see that you’re capable of setting aside money for loan repayments, they’re more likely to view you as a trustworthy borrower.
  

Improve your chances

If you’re able to show evidence of a stable income over the past two years, your potential lender will then examine your credit score, savings, expenses and other debts to determine whether you have the ability to make repayments. Check out these 3 things you can do to improve your chances of qualifying for a car loan:

• Select a less expensive car so you can borrow a smaller amount
• Save for a deposit so you can borrow a smaller amount
  
• Check and improve your credit score
  

Your credit score is a number that sums up the information on your credit report. It takes into account information like the number of credit applications you’ve made and the amount of money you’ve borrowed. It also notes your history of repaying debts on time. Basically, it tells the lender whether or not you’re a trustworthy borrower. 

If you have a low credit score, you could be stung with higher interest rates so it may be worth working on improving your score before you buy. You can do this by:

• Paying your rent, mortgage and utility bills on time
• Making credit card repayments on time and paying more than the minimum repayment
  
• Lowering your credit card limit
  
• Limiting how many applications you make for credit
  

All of these things will help your credit score to improve over time, giving you a greater chance of being approved for a car loan and securing a competitive interest rate. 

Know your Plan B

If you’re not approved for a car loan, there are other options available. You could apply for a secured personal loan, instead of a car loan. With a secured personal loan, the lender uses the car that you purchase as security against the loan. This means if you cannot make repayments down the track, the lender can repossess the car to cover the costs of the loan. 

Alternatively, you could apply for a guarantor personal loan, where you have a family member or friend co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Having a guarantor on your personal loan might improve your chances of being approve because your guarantor acts as a type of security, making it less risky for your lender to loan you the funds. 

You might also be able to secure a lower interest rate if you have a guarantor on your personal loan, which means you’ll save money over the life of the loan. 

Low doc car loan

If you don’t earn a regular income or you know you’ll find it tough to produce documents proving two years’ worth of stable income, a low doc car loan could be a good option for you. 

As the name suggests, lenders who offer low doc car loans ask for less documentation than is usually required. The downside? Low doc car loans often come with higher interest rates because they are considered riskier for the lender. 

Before applying, it’s a good idea to use a car loan calculator to find out how much you’d be expected to repay each month and how much you can reasonably afford to borrow. 

Do you qualify?

Tick off the list to see if you meet the criteria for a low doc car loan:

• Australian permanent resident (some visa holders are also permitted)
• Over the age of 18
  
• Earn at least $25,000 per year
  
• Hold a valid driver licence (provisional or full)
  
• Hold an ABN if self-employed
  

Considerations

When you’re comparing low doc car loans, make sure you understand the loan features, including:

• Interest rates: Is the rate fixed or variable?
• Hidden fees: Does the loan have upfront and ongoing service fees, or charges for making additional repayments down the track?
  
• The loan amount and terms: Car loans generally range from $3000 to $100,000, to be prepaid over a period of one to seven years.
  
• Loan restrictions: Low doc loans often have stricter lending criteria. For example, you may not be allowed to make additional repayments to repay the loan more quickly. Make sure the loan offers the flexibility to suit your situation.
  

Submitting an invoice with Plenti is simple. Just ensure that you invoice has the following minimum requirements before submitting:

1. Unique invoice number

2. Supplier details in full

3. Plenti applicant’s full name and current address (we cannot accept a partner’s name)

4. Exact model numbers of panels and inverters (brand, size and model numbers for batteries), and STC amount included

5. Business banking details for payment

6. System size and CEC accredited installer’s name

For further information, check out the guide we have created on invoice submission here.

In general, all-electric vehicles in Australia can cost between $45,000-$200,000. The average price for an electric vehicle (EV) is $88,716, but like traditional vehicles, they vary significantly in price.

There are currently 17 all-electric vehicles available for sale in Australia. There are also many plug-in hybrid electric vehicles (PHEV) on the market, which range in price from $42,000-$215,000.

^{Data sources:
EV Central: How much does an EV cost to own in Australia?
NRMA}

Your automotive finance BDM is here to help you answer any questions you may have about this new product and its exclusive rates.   

Yes! We have put together this guide so you can see exactly which cars are eligible for this discounted rate.

How do I charge an EV?

If you purchase an electric vehicle (EV) from the manufacturer, a wall box charger may be included with the purchase. However, many manufacturers require you to buy the charger separately. 

When you purchase an EV through Plenti, you can seamlessly add on the cost of a charger and installation through our partnership with JET Charge. Learn more. 

The 3 ways to charge an EV

1. With a traditional socket, at home or elsewhere. 
   This is the slowest option, but it’s a good backup in a pinch. Most vehicles come with a cord that can plug directly into a three-prong wall socket, though some will require an adapter for the plug.
2. With a wall box from your manufacturer.
   Around 80% of EV owners charge their vehicle this way. Using a wall box charger, your EV will power up much more quickly than with a traditional socket. Boxes are usually installed somewhere around the home, typically in a garage or driveway. There are also several thousand public wall boxes for EV charging across Australia.
3. Fast chargers
   These are the chargers you’ll find at dedicated charging stations. With these speedy chargers, most EV drivers can power up their car in under an hour. Currently, there are 110 fast charging sites across Australia, with more than 250 chargers across them. Certain car manufacturers allow their new EV customers to use their charging networks free of charge, such as Tesla and Mercedes, which utilises the nation’s largest network, Chargefox. 
   

 EV drivers can find the nearest charger anytime, anywhere using mobile apps like PlugShare or ChargeFox.

While charging infrastructure in Australia is still developing, EV drivers should feel optimistic about their charging options in the future, with federal and local governments rolling out plans to install thousands of charging stations in the next few years. Starting this year, the Future Fuels Fund is launching a $24 million initiative to deliver a seven fold increase in the number of fast charging stations across Australia. In addition, New South Wales plans to install more than 1,000 stations across the state over the next four years, with similar programs launching in South Australia,Victoria, Western Australia, Queensland, Tasmania and the Northern Territory.

We will send fortnightly emails to the top ten companies and individuals letting them know their spot on the leaderboard. If you aren't in the top 10 and want to know your position, you can contact your BDM to find out how you're going overall.   

Yes! If you win the individual prize, you can also be eligible for the company prize. You can't however, be eligible to win the prize for top-seller in your state if you are the top-seller in Australia. 

The company that settles the most loans between November and January will receive a Plenti prize pack worth over $32,000 including:  

• A Plenti trophy
  
• $500 worth of merch 
• 5 cases of beer
• A co-branded video produced by Plenti
• Plenti's platinum lead gen package
• 3 blog articles written by Plenti
• 2-hour sales & marketing workshop

They will also win $10,000 to spend on our prize list packed with exciting experiences and gifts that features something for everyone.   

The individual who settles the most loans in the country between November and January will win a $795 Plenti prize pack including:

• Plenti trophy
• $150 worth of merch
• 5 cases of Plenti beer

They will also win $5,000 to spend on our prize list packed with exciting experiences and gifts that features something for everyone. 

The process for uploading and downloading documents within the Broker Portal is very simple.

Uploading a Document

1. Log into the broker portal and click ‘View’ on the desired application
2. When you arrive at the selected application, scroll down the page to view the option for uploading documents
3. Under the ‘Supporting documents’ section, you should see an option to upload a document. Click this button to continue

Downloading a Document

1. Log into the broker portal and click ‘View’ on the desired settled application
2. Navigate to the right-hand side of the selected settled application screen. Under ‘Credit details’ there is an option to download the contract

An in-depth guide with illustrations for this process is available here.

Yes, you can set up a 4-digit PIN to access the App. If you want to change your PIN or have forgotten you PIN, select “Forgot my PIN” at the login screen and follow the prompts.

Yes. Select the ‘Funds’ at the bottom of the Plenti App screen. Select the ‘Transfer in’ or ‘Withdraw’ buttons and follow the prompts to complete your transaction. Your recent transactions are displayed at the ‘Funds’ tab.

You can review your returns by tapping the ‘Returns’ tab at the bottom of the App screen.

On either the ‘Returns’, ‘Portfolio’ or ‘Funds’ tabs in your Plenti App, tap the ‘Invest now’ button. A pop-up window will appear where you can:

1. Select a lending market to invest in

2. Choose the amount you wish to invest above $10 minimum

3. Create a lending order at the market rate or at a custom rate

4. Confirm your order details

Your order will be placed on market and in queue to be matched with borrowers so you can start earning.

Please enter your Plenti Account email and password. You can find these at the top right-hand corner of your web browser in your Plenti Account. If you have forgotten your login details, please contact us at: contact@plenti.com.au

Your investment is not a deposit and does not have the benefit of depositor protection laws as it would have if it were an amount deposited with an Australian ADI.

Where there is an ancillary arrangement in relation to a loan to which your funds are matched, a party making payments pursuant to that ancillary arrangement may stop making payments or default on their obligations. In such circumstances, you may be protected by Plenti making a claim to the Provision Fund, however, there is no guarantee nor warranty as to any protection from the Provision Fund, and as such you may suffer financial loss as a consequence of the third party not meeting their obligations under the ancillary arrangement.

In circumstances where your funds are matched to a secured loan and where lenders funding that loan are not fully compensated by the Provision Fund in the event of a default, your investment may be impacted by the realisable value of the property over which a security interest is held, to the extent that the realisable value is not sufficient to cover the full repayment of the loan. In other words, if a loan is secured, its repayment is not guaranteed.

We assess a borrower’s creditworthiness as at the date of loan application, and our assessment reflects their creditworthiness at that point in time. We do not commit to evaluating a borrower’s creditworthiness on an ongoing basis, although we may do so periodically. Your investment may be impacted should the creditworthiness of that borrower change over time, reducing the borrower’s capacity to repay their loan. In addition, your funds may be matched to the loan of a borrower whose creditworthiness has changed since their loan application was approved, or to a borrower who has been or is late in making payment on their loan.

Your investment may be impacted by differences in the creditworthiness of borrowers to whom your funds are matched in circumstances where lenders are not fully compensated by the Provision Fund in the event of borrower late payment or default. Plenti performs a comprehensive borrower risk assessment and lends only to creditworthy Australian-resident individuals and businesses, however, there may be differences between the creditworthiness of borrowers to whom your funds are matched and there may be different risks and different levels of overall risk associated with loans to individuals versus loans to businesses.

In the event of a borrower late payment or default where you have not benefited from Provision Fund protection, you may only be able to withdraw your funds relating to that loan when any collections or recoveries have been made against that loan.

In the event your funds and the funds of other investors in the 1 Month Rolling market need to remain on loan to a borrower beyond the indicative term, the funds of other investors may be repaid before your funds are repaid and there is no guarantee that your funds will be repaid at the same time as other investors in the same loan.

In the 1 Month Rolling lending market, your funds may need to remain on loan to a borrower or series of borrowers in a lending market, beyond the indicative term. This may occur if, at the end of the indicative term, there are insufficient lender funds available to replace your funds in a loan. This period could be as long as an additional thirty-five months.

If your funds in the 1 Month Rolling lending market are committed to a loan beyond the indicative term, your funds may be returned to your holding account if your investment in the relevant loan is able to be replaced with the funds of a different investor, subject to the funds replacement buffer. If your funds are committed for a longer period, you will continue to receive payments (where paid by the borrower or you are compensated by the Provision Fund in the event that a borrower is late making payment or defaults) and your interest rate will remain the same.

Your investment may also be longer than the indicative term in the event that a borrower or series of borrowers to whom your funds are matched are late in making payment and you are not compensated by the Provision Fund or other collection or recovery efforts.

You are only able to withdraw (or reinvest) your funds at the end of the indicative term of the lending market in which they are invested, except where i) they are repaid to you through scheduled payments, ii) they are repaid to you by a borrower as a result of the borrower making an additional payment or repaying their loan early or iii) you are compensated by the Provision Fund.

When the early access transfer feature is available, you may be able to request an early access transfer to exit an investment in a loan before the end of its indicative term, provided there are funds from other lenders to replace your interests in that loan. An early access transfer request will not be fulfilled where, inter alia, the value of lender orders in that lending market following execution of the order would be less than the early access transfer market value limit or replacement funders would be matched to the relevant facilitating loan at a rate above the early access transfer rate limit, such limits as set by us from time to time and published on our website. The availability of the early access transfer feature is not guaranteed and may cease to be available to lenders without warning.

See Section 7.12 of the Product Disclosure Statement for more information on early access transfers.

If a borrower to whom your funds are matched defaults on a loan and you are not fully compensated by the Provision Fund, Plenti may assign that defaulted loan to a third party, such as a collections agency, for an amount it is able to negotiate or the Provision Fund for $1. Once a loan has been assigned, you may not benefit from any recoveries that may then be made from that borrower. Further information on the assignment of loans is provided in Section 7.11 of the Product Disclosure Statement.  

We may make a claim to the Provision Fund to compensate you in the event of a borrower late payment or default. However, the Provision Fund is not an insurance product and we cannot guarantee or warrant that you will be compensated. Plenti has discretion as to whether to make a claim and may determine to only make a partial claim or not to make any claim if, amongst other reasons, there are insufficient funds in the Provision Fund to cover all expected claims in relation to existing loans.

Where the Provision Fund buffer is greater than the value of expected losses, it is our expectation that the Provision Fund Claims committee will make a claim to the Provision Fund to compensate lenders for the full amount of any borrower late payment or default. If the Provision Fund Claims Committee determines that there may not be sufficient funds in the Provision Fund to cover all expected future losses (based on loans currently outstanding), then it may reduce the amount it seeks to claim from the Provision Fund to compensate for borrower late payment or default. For example, the Provision Fund Claims Committee may make a claim on the Provision Fund to compensate an investor for amounts of unpaid principal, but not interest, or may decide to delay any claim for interest until a later date.

If you are not compensated by the Provision Fund in the event of borrower late payment or default, you may benefit from debt collection or recovery processes that Plenti may undertake, which may or may not recover any funds. In such circumstances, Plenti may also assign your loan to a collections agency or the Provision Fund for consideration.

A borrower or series of borrowers to whom your funds are lent may delay or stop payment on a loan or default on a loan. You may be protected by Plenti making a claim to the Provision Fund, however, there is no guarantee nor warranty as to any protection from the Provision Fund, and as such you may suffer financial loss as a consequence of borrower late payment or default.

While your monthly repayments do not alter during the term of your loan, there may be different everyday investors that are funding your loan at various times. Where investors require a different rate of return to continue funding your loan, you will receive a notification of a rate change that is outside of your normal monthly statement. Importantly, any change you are notified about only applies until your next monthly repayment and does not impact the amount of that next repayment.

A fixed-rate loan has the same interest rate for the entire term of the loan, whereas the interest rate for a variable rate loan may increase or decrease during the term of the loan If your interest rate changes, you will receive a notification — either in your monthly statement or a separate notice. Changes in your loan interest rate does not impact the amount of your ordinary monthly repayment, only your final repayment. When interest rates increase, this may increase your final payment, and when they decrease, reduce it.

In order to collect your direct debit payment, we submit the request one business day prior to your direct debit date. Your bank may choose to process the request when they receive it, or up to 2 business days later. If the submission date is not convenient we can certainly look at adjusting your direct debit date. 

Your payment schedule is displayed on your Plenti account and has the amount and dates of all of your repayments. 

You can make extra payments by BPAY, but you do need to make your contractual payments by a monthly direct debit. Making any manual payments will not adjust the timing or amount of your monthly payments. 

You can only make your payments on a monthly basis, however, we can adjust the direct debit date if the current date is not convenient.

When you accepted your loan online, the balance was increased to include any applicable fees for your loan. Also interest has started accruing on your loan so you will see the balance increase slightly until your next monthly payment has been collected.

The funds replacement buffer is the amount of funds that must remain on the 1 Month Rolling market after any existing investor funds are replaced (except where there are no investors whose funds are matched to a loan beyond the indicative term). The funds replacement buffer will be determined by Plenti on an ongoing basis and is currently $300,000. See section 6.7 of the PDS for further details.

When you invest via the 1 Month Rolling market you are funding loans up to 36 months in term. Typically, the 1 Month Rolling market provides you an opportunity to exit your investment each month (or earlier if a borrower makes an early payment). This is subject to there being sufficient funds from replacement funders to replace your investment at that time.

If you did not receive your funds at the end of the one-month indicative term, there may not have been sufficient funds available from replacement funders to replace your investments in loans.

Importantly, until repaid to you, your funds will remain on loan and you will continue to earn a return at the same interest rate. You will also continue to benefit from Provision Fund protection if one or more borrowers miss payments or default on their loan. You can see additional details about the loans to which you remain matched, and any expected future payments from borrowers, in your Plenti Account.

Your funds will be returned to your holding account as borrowers make payments and/or as funds from replacement funders are available to replace your investment. See FAQ below for further details.

The interest rate limit is the highest interest rate at which an order can be placed in a lending market and is determined by us from time to time. The interest rate limits are currently:

1 Month Rolling: 4.3% p.a.

3 Year Income: 5.4% p.a.

5 Year Income: 6.5% p.a.

National Clean Energy: 6.0% p.a.

SA Renewable Energy: 4.4% p.a.

Comprehensive credit reporting will reward you for being a responsible borrower. By committing to your repayment schedule, avoiding late payments, and, if possible, making additional repayments, you can actively improve your credit score, which may help improve your ability to borrow money in the future.

Comprehensive credit reporting has been introduced in conjunction with open banking, a new data-sharing model that gives customers full control over who can access data related to their financial history. Together, comprehensive credit reporting and open banking promise to make it easier than ever for you to qualify for, and access, a personal loan.

Plenti has a number of measures in place to help mitigate risks to investors. To date, all investors have received their principal and interest repayments.

Plenti only funds loans to creditworthy borrowers. Before any borrower is approved for a loan, they undergo a stringent underwriting process performed by in-house underwriters. Borrowers are identity checked, credit checked and risk assessed. Plenti only matches investors with creditworthy Australian-resident borrowers. You can view statistics about our credit performance by registering as an investor (this is free and there is no obligation to invest).

In the event that a borrower defaults on their loan, we (or a third party on our behalf) may act to collect overdue payments, including appointing an external collections agency or using available legal remedies, including where appropriate, court action. If a loan is secured, collection actions may include the secured asset being repossessed or sold. Plenti has the sole discretion to determine what actions if any are taken to recover funds from a borrower.

In addition to our stringent underwriting standards and established collections processes, Plenti investors may be protected by our unique Provision Fund. In the event of a late payment or borrower default, the Provision Fund may compensate investors for loss. The Provision Fund is not a guarantee nor an insurance product, but thanks to the Provision Fund, no investor has lost a cent of principal or interest due to them. Our number one objective is to maintain this track record on an ongoing basis.

Learn more about the Provision Fund.

Yes, you can. To be eligible to apply for a Plenti loan as a self-employed individual, you will need to have been in your current role for at least 12 months and be able to provide your most recent individual tax return and the corresponding notice of assessment from the Australian Taxation Office.

The Common Reporting Standard (CRS) is a new information-gathering and reporting requirement for financial institutions in participating countries (including Australia), to help fight against tax evasion and protect the integrity of tax systems.

What is reportable?

The CRS seeks to establish the tax residency of customers. Under CRS, financial institutions are required to identify customers who appear to be a tax resident outside of Australia and report certain information to the ATO. The ATO may then share that information with the tax authority where you are a tax resident.

Why are you asking me for my jurisdiction(s) of tax residency?

Under CRS, the ATO required us to collect and report certain information relating to our customers' tax statuses. If you register to become a member of the Plenti Lending Platform, or have opened an account after 31 July 2017, we will ask you to certify a number of details about yourself. This process is called "self-certification" and we are required to collect this information under the CRS.

How is my tax residence defined?

This will depend on where you live and your circumstances. Please contact a professional tax adviser or check the ATO website for more information on how to determine your tax residency. Plenti cannot give tax advice.

How often will I need to provide this information?

Once we have a valid self-certification on file, you will only be asked to complete another when you update certain information on your account or we believe your reportable status may have changed.

Will Plenti respect my data privacy?

All information we collect on you if help subject to our Privacy Policy. We will only disclose your information to the relevant tax authorities if we are legally required to do so.

Where can I find further information and advice?

The ATO has published a simple guide to CRS (and the related regime for US tax residents, FATCA).

In the unfortunate event that a Plenti account holder passes away, we can transfer control of the account to the executor of their estate. To complete this transfer, and depending on the type of lending account, we will usually require a copy of the death certificate and a copy of probate.

If the executor wishes, we can stop reinvestments and set up an auto-withdrawal so that funds are transferred back to a nominated bank account. Alternatively, the executor can take over the lending account if they would like to continue lending with Plenti.

If you wish to close your account, please send an email to contact@plenti.com.au. Unfortunately, we are unable to delete your account because regulatory obligations require us to retain account details for up to ten years. You can be assured that your data is stored securely and will not be made available to third parties without your consent.  

If you have recently changed your residential address, please update us by emailing contact@plenti.com.au.

We will require a document to verify your new residential address. This could be a recent utility bill, updated driver's licence, or bank statement.

If you have forgotten your password, you can request a password reset.

You will receive an email to the email address associated with your Plenti account containing a unique link. Simply follow the link within 24 hours and follow the prompts to nominate a new password.

Early access transfers are requested from within an investor’s Plenti account when the feature is available. To request an early access transfer:

1. Click ‘Early Access Transfer’ on the left-hand menu of your lender Plenti Account.

2. Select the lending market out of which you'd like to transfer a loan (3 Year Income, 5 Year Income or National Clean Energy).

3. Specify the amount that you wish to early access transfer. This amount excludes capital reduction and fees.

4. Click ‘Get Quote’

5. Confirm details of the early access transfer, including any applicable fees and any capital discount. Then click ‘Proceed’ to be placed in market for matching with prospective replacement funders.

Note that when you request an early access transfer funds will be returned to your holding account, not withdrawn to your nominated account.

For borrowers, one of the attractive benefits of taking out a loan on the Plenti platform is the ability to repay their loan early without facing any early exit fees or charges. This does mean that the lender may occasionally be repaid early. Lenders can use reinvestment settings to ensure their funds are automatically reinvested back into a lending market of their choice if this happens.  

Your first scheduled repayment must come from the bank account that you originally provided to us. After the first payment has been made, we can update your bank account details if required.

To change your nominated bank account, log into your account online, click on ‘Account Settings’ and click on the link under ‘Nominated Bank Accounts’. From here, you can follow the prompts to submit a request to change your bank account.

Please note that it’s only possible to change a lending order if it hasn’t yet been fully matched. If your order has been partially matched (that is, only a portion of your order has been matched to a loan or series of loans), you can change or cancel the order only in relation to the amount that hasn’t been matched.

To change a lending order, log in to your Plenti Account and click the relevant lending market under "Your Loans and Orders" in the menu on the left. Then expand the box titled "Unmatched” and click "Change" or "Cancel" next to the relevant lending order.

You can withdraw some or all of the cleared funds in your holding account to your nominated bank account at any time. Withdrawals can be made as a one-off transfer, or you can elect to establish an automatic, periodic withdrawal. The minimum amount for any withdrawal is $1.

You are not able to withdraw any funds that are on loan or that are on market. If you wish to withdraw funds that are on market and waiting to be matched with loans, you will need to cancel the relevant lending orders.

If you wish to withdraw funds that are currently on loan in the 3 Year Income, 5 Year Income or National Clean Energy lending markets, you may be able to use the early access transfer feature to exit your investments prior to withdrawing these funds.

To withdraw funds from your holding account to your nominated bank account, log in to your Plenti Account and click the "Withdraw" link on the left-hand menu.

For more information on withdrawing funds, please read our Product Disclosure Statement.

We understand it may be distressing to receive a notification about a change in your interest rate. However, it’s important to note that the change does not impact you in the immediate term or the amount of your next monthly repayment. Any changes in rate only impact the amount of your final repayment.

For the 3 Year Income and 5 Year Income lending markets, a 1.5% early action transaction fee applies.

For the National Clean Energy market outgoing lenders may pay a fixed fee of up to 1.5% of the amount paid to them by the early access facilitating partner (i.e. net of capital discount).

If you miss a scheduled direct debit repayment, we will notify you by email and will reschedule the direct debit, generally for about five days later. You may incur fees for missed repayments as outlined in your loan contract.

If you miss multiple scheduled payments, we may engage our specialist debt collection agency to assist with recovery activity. Defaulting on a loan may affect your credit history, and this may, in turn, affect your ability to borrow in future.

If you are having trouble making your repayments, you should contact us.

If an investor has funded a loan or loans in the 3 Year Income, 5 Year Income or National Clean Energy lending markets, they may be able to use the early access transfer feature to withdraw part or all of their investments before the end of their indicative term. The availability of the early access transfer feature is at our discretion and may not always be available to you. For information about when the early access transfer facility is available, see section 6.12 of our Product Disclosure Statement.  

The interest rate for our variable rate loans can change or vary over the life of the loan. The interest rate that applies to your Plenti loan is not set by Plenti, but is determined by the rates offered by everyday investors who funded your loan in our lending markets.

The Early Access Facilitating Partner is the entity to which an outgoing investor’s loans are transferred following a fulfilled early access transfer. The Early Access Facilitating Partner ‘pays’ the outgoing investors for that transfer using funds lent to it by the replacement investor. This creates two back-to-back loans, with the Early Access Facilitating Partner in the middle. 

No. Early access transfers are available at Plenti’s discretion and may cease to be available to lenders at any time. An early access transfer request may not be fulfilled if:

• There are insufficient funds available from other lenders to replace your interests
• After fulfilling the request, the value of the remaining lending orders is less than $750,000 in the 5 Year Income lending market, $500,000 in the National Clean Energy lending market, or $300,000 in the 3 Year Income lending market (this is known as the early access lending market value limit)
  
• Replacement lenders will be matched to replace your investment at a rate above 10% p.a. in the 5 Year Income or National Clean Energy lending markets or 8.5% in the 3 Year Income lending market (this is known as the early access lending market rate limit)
  
• Your outstanding principal in a loan contract is less than $10.00.
  

If your early access request is accepted, it may take up to four hours to fulfil. Your early access transfer request may be cancelled if the capital adjustment required to fulfil your request is higher than quoted.

No, lenders specify an amount (before fees and any capital discount) that they wish to acquire using an early access transfer. Plenti then selects loans (or parts of loans) to fill this amount, starting with the loan that has the longest remaining term. 

Our displayed rates of return may assume that a lender is reinvesting their borrower payments into the same lending market at the same rate. If your actual rate of return is less, this may be because of processing times, because you have not reinvested your repayments, or because you have reinvested them at a lower rate than the original rate of your order. 

You can request to change your direct debit date by logging in to your Plenti account by selecting 'Details and Payments'. From here, you can submit a request to amend your direct debit date.

To collect your payment by the specified payment date, Plenti makes a direct debit request to your bank the business day before. Occasionally, the request will clear on the same working day which can lead to funds departing your account early; please keep this in mind when selecting a new direct debit date. There may also be fees applied payable each time you ask to move a monthly repayment to a date after the scheduled due date.

If you would like to increase the amount of your monthly repayment to pay off your loan faster, you can amend your payment schedule at any time through your Plenti account. There are no fees or charges for increasing your repayment amount, or for paying off your loan early.

Simply log in to your Plenti account and select 'Details and Payments'. From here, you can select the amount you wish to repay monthly. If you would like to revert back to your monthly contractual repayment amount, you will be able to do so using this screen.

You can make an extra payment at any time using BPAY or bank transfer without incurring any fees or penalties.

Any extra payments you make will automatically reduce the term of your loan. This means that your monthly repayments will stay the same but you will pay less interest overall. Additionally, any extra payment will not affect the amount or timing of your regular monthly direct debit payments.

You can find our BPAY and bank account details and make an extra payment by logging in to your Plenti account and selecting 'Details and Payments'.

You can repay your entire loan at any time. Even better, there are no fees or penalties for repaying your loan early. Simply log in to your Plenti and go to 'Details and Payments'. From here, you can select to view and repay your outstanding loan balance by BPAY or bank transfer.   

The first step in applying for a Plenti loan is to request a RateEstimate. Your RateEstimate is an initial assessment of your eligibility to apply for a loan with Plenti. It provides you with the estimated fees, charges and interest rate that may apply to your loan, taking into account a number of factors including your proposed loan term, amount, purpose and personal credit history.

Requesting a RateEstimate won't impact your credit score and there's absolutely no obligation for you to proceed with a loan application. It's free, secure, and will only take 1 minute to complete.

If you are happy with your RateEstimate, you can proceed by completing our simple online loan application form and providing your supporting documents. Once we receive your complete application, we will provide you with an outcome within two business days.

You can elect to reinvest interest and/or principal automatically as it is received. To access your reinvestment settings, log in to your Plenti Account, then click ‘Reinvestment settings' in the left-hand menu.

You are able to select:

• The lending market into which your reinvestments are made
• Whether the full payment is reinvested, or just the capital amount
  
• Whether your reinvestment is made at the market rate or at a specific interest rate (selecting the market rate option will help to ensure your funds are reinvested relatively quickly).
  

To process an order or reinvestment, there must be at least $10 in your holding account.

Simply log in to your Plenti Account and then click the "Plenti Data" tab. Click "View Full Market" to view all current lending and borrowing orders in the corresponding market.   

We believe that transparency is fundamental to peer-to-peer lending. That’s why we’ve made it easy for lenders to view historical rates via the investor portal.

To change your address, log in to your account portal and select "Account Settings." Next to your address, you will see the option to change your address.

Once you’ve made an order, it can take anywhere from a few minutes to several days or more for the order to match with a borrower. This depends on the amount and rate you are offering, as well as the rate that borrowers are willing to accept.

As a general guide, investors bidding lower rates in our lending markets are matched with borrowers more rapidly. This is because our borrowers are matched at the lowest rate.

For more information, you should see our Product Disclosure Statement.

To view your loan contract, log in to your Plenti account, click "Details and Payments" next to the relevant loan, and then click "View your loan contract".   

The Holding Account contains deposits made into your Plenti account as well as capital and interest repayments on existing loans. You can withdraw these funds from your account immediately or place them on market to be matched against borrower loans.

Funds in your Holding Account are held as cash on trust in an account with an Australian Authorised Deposit-taking Institution, in the name of Plenti's appointed custodian. You do not earn any interest while your funds are in your holding account.

The custodian also acts as the legal lender of record in relation to loans made to borrowers.

Funds in your holding account and funds on market waiting to be matched with borrowers are held in cash. These funds are held on trust in an account with an Australian Authorised Deposit-taking Institution, in the name of Plenti’s appointed custodian. The custodian also acts as the legal lender of record in relation to loans made to borrowers.

Plenti is not a bank, and Plenti investor accounts are not bank accounts. Plenti is neither authorised under the Banking Act 1966 (Cth), nor supervised by the Australia Prudential Regulation Authority. As such, the depositor protection provisions in section 13A of the Banking Act will not cover your investment.

Plenti is regulated and licensed by ASIC, and holds both an Australian Financial Services Licence (number 449176) and an Australian Credit Licence (number 449176). Learn more about our compliance.

View ASIC's Money Smart website to learn more about peer-to-peer lending.

Yes, you can apply for a second loan through your Plenti account provided you meet certain eligibility criteria.    

In the event that a borrower is late with their payment or defaults on their loan, the Provision Fund may be used to compensate investors for any loss. The Provision Fund is neither a guarantee nor an insurance product. However, to date, every investor has received every cent of principal and interest owed to them. For more information, please see the Product Disclosure Statement.   

When making a deposit into your Plenti holding account, the funds arrive the following business day. This can occasionally take longer depending on bank processing times.

In some circumstances, deposits may require manual reconciliation due to the use of an incorrect payment reference. If this occurs, we may require a receipt for the transaction.

If you make a withdrawal from your Plenti holding account, the funds should arrive in your bank account the following business day. This can occasionally take longer depending on bank processing times.

We facilitate lending to creditworthy Australian-resident individuals. Our average borrower earns an income of $84,000 and is 40 years old. Borrowers are typically seeking loans for purposes such as consolidating debts, purchasing a car or renovating their home. In our National Clean Energy lending market, borrowers are seeking funds for the purchase and installation of clean energy equipment, such as solar panels and batteries.

At Plenti, we do the work for you. We carefully examine an applicant’s credit file and circumstances to understand their financial position and ability to repay the loan. Our standards mean that we are not able to assist a large majority of borrowers that submit an enquiry.

Plenti provides a confidential lending service. The only details you are provided about a loan to whom your funds are matched to is a reference number. All identity, credit, affordability and suitability checking is performed by Plenti and is not displayed on our website. However, Plenti publishes a full loan book that sets out details (including loan amounts, interest rates and purposes) on every loan funded to help you understand more about the profile and performance of our loans.

For more information, you should see the Product Disclosure Statement.

If you are having trouble making your repayments, or require assistance due to financial hardship, please don't hesitate to email us at contact@plenti.com.au or call us on 1300 768 710. We will be able to provide you with a financial hardship application and discuss your options.

If we approve your financial hardship application we will make a variation to your loan contract, for example by offering reduced monthly loan repayments for a period of time.

Yes, you can register as an overseas investor. We currently don't have an online application for overseas investors, as the website is designed for Australian details only. However, if you send an email to contact@plenti.com.au, we will provide you with a link to provide your details so that we can create an account for you manually. We will then contact you to request some documents required to verify your identity. These documents will need to be certified.  

Yes, self-managed superannuation funds (SMSFs) can invest with Plenti. SMSFs are typically structured as trusts — simply select the relevant trust type when registering as a Plenti investor. 

The minimum investment to become a peer-to-peer lender is $10. Although there is currently no maximum investment, Plenti reserves the right to cap the amount of your total investment. In addition, Plenti reserves the right to refuse to submit your order to a lending market or to cancel your order without giving you prior notice. 

The Provision Fund is designed to help provide investors with ongoing protection against borrower late payments or loan defaults. It is not a guarantee or an insurance product.

The money in the Provision Fund comes from charges paid by borrowers. When a borrower applies for a loan, they may be required to pay a charge (the Risk Assurance Rate or Risk Assurance Charge), the amount of which is determined by a number of factors, such as their credit rating from independent credit bureaus. Borrowers pay the Risk Assurance Rate or Risk Assurance Charge into the Provision Fund.

Although the Provision Fund is funded by borrowers, it has been established for the benefit of lenders. Plenti may, at its discretion, instruct the Provision Fund's trustee to pay an amount out of the Provision Fund to compensate lenders for a loss arising from a borrower default. Importantly, funds held in the Provision Fund are held for the benefit of investors. Plenti cannot use these funds for its own purposes. The Provision Fund can only be used to compensate investors for losses of principal and/or interest.

For further information about the Provision Fund, see the Product Disclosure Statement.

Yes, the net income earned on your Portfolio will be assessable for tax.

If you do not provide your Tax File Number, we are required to withhold tax from your net interest earnings at the highest marginal tax rate. This rate is currently 45%. This amount is remitted to the ATO. If you provide your TFN, we will not withhold any tax.

To make it easy for you to complete your tax return, we will provide an annual statement that outlines the interest you have earned and the net of our fees.

Please refer to our Product Disclosure Statement for further information regarding tax on your Plenti investment. The tax implications outlined in our Product Disclosure Statement are general in nature and do not take into account your specific circumstances. You should obtain specific taxation advice from a suitably qualified tax advisor before investing.

Plenti is not a bank, and Plenti investor accounts are not bank accounts. Plenti is not authorised under the Banking Act 1966 (Cth), nor is it supervised by the Australia Prudential Regulation Authority.

Plenti is regulated and licensed by ASIC, holding both an Australian Financial Services licence (number 449176) and an Australian Credit Licence (number 449176).

Loans are ordinarily repaid via direct debit, with the repayment dates defined in accordance with the borrower's loan schedule. You can view any payments that you are scheduled to receive using your Plenti account. Simply login, click the relevant lending order under "Your loans and orders" in the left-hand menu, expand the box titled "On loan", and then click the "Your funds on loan" link.

Your schedule of payments is defined by the terms of the lending market you have decided to lend in. Funds may appear back in your holding account earlier than anticipated. In some circumstances, you may not receive your funds until after the indicated term.

For further details, please see our Product Disclosure Statement.

Select the menu button at the top left-hand corner of the Plenti App. The Menu will appear and the ‘Help and support’ button will take you to your options to contact us.

You can view the following data if you click the data button at the top right-hand corner of the Plenti App:

• Market rates
• Market orders
• Provision Fund

No - you can make extra payments, increase your monthly payment or repay your loan early and there are no fees for doing this. You would also save on the amount of interest you are paying. 

Plenti offers secured and unsecured personal loans between $2,001 and $45,000. 

Unfortunately, we cannot disclose specific reasons as to why we have been unable to provide you with a RateEstimate.  

Yes, you can. However, your request to refinance a loan with Plenti will be treated as a new loan application and must, therefore, meet the same eligibility criteria as your original loan. We will likely request that you provide us with updated information concerning your personal and financial circumstances before assessing your refinancing request.  

Yes, it is possible to refinance your loan. However, you will need to meet certain eligibility requirements.

If you are eligible to apply for refinance you will be able to do so through your Plenti account. Alternately please email us at contact@plenticom.au for more information.

You can register to invest with Plenti online in just 5 minutes. Once we have approved your registration, you will be able to transfer funds into your account, select the lending market you wish to invest in, set your rate and have your funds matched with loans to creditworthy borrowers.

For more information about investing, you should see the Product Disclosure Statement.

Looking for a little more, to change a lot? 

A loan top up allows approved applicants to efficiently and easily borrow additional funds. 

This additional amount will be consolidated into the existing loan, with one monthly repayment.

To find out if you are eligible for a top up, login to your Plenti account and visit the ‘Top up your loan’ section on your summary page.

Applying for a top up is simple and 100% online.To process your top up request, you will need to 

1. Confirm some information about your current financial circumstances

2. Provide a copy of your latest bank statement

We will then perform an up to date credit check.  Getting an accurate picture of your most recent financial position helps us ensure we offer you the best possible rate on your top up.

Plenti will provide you with an outcome, and if successful we will invite you to accept your new loan contract. The new loan contract will cover the balance of your existing loan combined with the new top up amount.

Investors are charged an interest margin fee of an amount equivalent to 10% of the gross interest they receive from borrowers. This is charged whenever an interest payment is received. Investors do not earn interest on funds in their holding account, as interest earned on the bank account that holds Plenti investors' funds is retained by Plenti. Management costs also include borrower fees which In the financial year ended 30 June 2020, were 3.77% of average net scheme assets.  Read our Product Disclosure Statement for further details.

Importantly, all lending rates displayed on the Plenti site take into account the fees you are required to pay. The rate you see is the rate you get, subject to a few important assumptions.

If you know that you're going to miss a payment, or you are having trouble making your repayments, it's essential that you let us know as soon as possible by contacting us on 1300 768 710.

Plenti takes the security of your information very seriously. We work hard to protect ourselves and your information from unauthorised access.

We also protect against unauthorised disclosure, alteration or destruction of information we hold.

• We keep hard copy and electronic records on our premises and systems or offsite using trusted third parties.
• We ensure personal information we hold on you is secure at all times, including ensuring that it is protected from misuse, interference and loss, unauthorised access, disclosure and modification.
  
• Your information is only accessible by you and those authorised to access it. Employees and third parties who deal with your information are bound by confidentiality obligations and are required to complete training about information security and privacy.
  
• When we no longer need your information, including when we are no longer legally obliged to keep records relating to you, we will destroy it or de-identify it.
  

If you have forgotten your password, you can request a password reset.

You will receive an email to the email address associated with your Plenti account containing a unique link. Simply follow the link within 24 hours and follow the prompts to nominate a new password.

You can log in to your account via the link in the top right corner of the Plenti homepage. To log in, you will require the email address and password associated with your account.

If you have forgotten these, simply click the 'Forget Your Password?' link and we'll guide you through the process of resetting it.

Our fee structure includes a once-off Credit Assistance Fee, which is payable to Plenti for assisting with your loan, as well as an interest rate. You may also incur a Risk Assurance Charge, based on a number of factors including your credit profile.

When you request a RateEstimate we will provide you with an estimate of the upfront fees and charges that may apply to your Plenti loan. These fees and charges are included in your monthly repayment.

Although your RateEstimate includes our best estimate of fees that may apply, it’s important to remember that these could change as we assess your loan application in more detail.

Plenti has put in place a number of measures designed to minimise the risk of investors losing money due to borrowers making a late payment or defaulting on their loan.

Firstly, we are very cautious about who can borrow using Plenti. Before any borrower is approved for a loan, our underwriting team verifies their identity, checks their credit, and assesses their risk. Plenti only lends to creditworthy individuals with Australian residency. You can view statistics about our credit performance by registering as an investor (this is free and there no obligation to lend) and clicking the "Plenti data" tab.

Secondly, the Provision Fund exists to help protect lenders from loss. The Provision Fund is not a guarantee nor an insurance product. However, thanks to the Provision Fund no Plenti investor has lost a cent of principal or interest.

Thirdly, we employ an experienced, specialist debt collection agency to help us retrieve late payments or defaulted loans. Until an investor’s funds are lent out, they are held in trust by an independent custodian in a bank account at an Australian Authorised Deposit-taking Institution.

Finally, to satisfy obligations under our Australian financial services licence (AFSL) and Australian credit licence (ACL), we undergo a number of external audits every year. This ensures that investor funds are properly accounted for and our platform is operating as it should.

Read our Product Disclosure Statement to learn more about the risks of investing.

Individuals, companies and trusts (including SMSFs) can invest with Plenti. To invest as an individual with Plenti, you must have an Australian bank account and be at least 18 years of age. Before investing you should make sure you read and understand our Product Disclosure Statement.  

Yes, a company or trust can invest with Plenti. Simply select the relevant entity type when registering as a Plenti investor. 

If you would like to close your account, please contact us on 1300 768 710 or send us an email at contact@plenti.com.au.

Please note that we are unable to delete your account because regulatory obligations require us to retain account details for up to 10 years. You can be assured that your data is stored securely in accordance with our Privacy Policy.

Funds that remain on loan beyond the indicative term are added to an access queue. Replacement funders placing new lending orders in the 1 Month Rolling market will replace existing investors in the access queue on a pro-rata basis by indicative term date (from oldest indicative term date to newest). Note that replacement is subject to several conditions, including the “funds replacement buffer” (see FAQ below).

You can view additional details about the access queue, and the position of your funds relative to the queue, in your Plenti Account.

Plenti personal loans are available for terms between 6 months and 5 years. 

Your RateEstimate is an initial assessment of your eligibility to apply for a loan with Plenti. It provides you with the estimated fees, charges and interest rate that may apply to your loan, taking into account a number of factors including your proposed loan term, amount, purpose and personal credit history.

Requesting a RateEstimate won't impact your credit score and there's absolutely no obligation for you to proceed with a loan application. It's free, secure, and will only 1 minute to complete.

Applying for a loan may impact your credit score, particularly if you are applying for multiple loans in a short space of time.

If you apply for a loan with Plenti, we will submit a credit enquiry and request your credit file from Equifax and/or Illion. A credit enquiry may affect your credit score. For more information about your credit report, you should contact the credit bureaus.

No. When you request a RateEstimate, Plenti Pty Limited Limited will request a copy of your credit file as an 'access seeker', known as a soft credit check. A soft credit check is only visible to you and other access seekers, will not be visible to other credit providers and does not impact your credit score.

If you complete a loan application Plenti RE Limited will submit a credit enquiry and request your credit file. This may impact your credit score.

Your specific interest rate may vary depending on your individual circumstances, as well as the loan details such as the amount you wish to borrow, your desired loan term, and the rates in our lending markets. To find out the likely interest rate for your loan, complete a 1-minute RateEstimate.  

Can I repay my personal loan early?

Absolutely. At Plenti, we don't have any early repayment fees or penalties, so you can increase your scheduled monthly repayment, make an extra payment, or pay off the loan in full at any time without incurring any additional charges. You can manage this online by logging into your Plenti account.   

We take our responsible lending obligations seriously – it’s the law. We require your bank statements in order to verify the information provided on your loan application, which may include your income, expenses, and living costs. Other personal loan providers are also likely to require your bank statements before approving your loan for this reason.

Plenti values customer privacy and will handle your information in accordance with our Privacy Policy.

The best way to assess your eligibility to apply for a loan with Plenti is to request a 1-minute RateEstimate.

Generally speaking, Plenti provides secured and unsecured loans to Australian residents. You can apply for a loan for a range of purposes, including purchasing a new car, home renovations, debt consolidation, a major event, a holiday, or even to finance your small business.

Save time before applying by making sure:

• You are aged 21 or over
• You are an Australian citizen or permanent resident
  
• You have a regular source of income that you can demonstrate
  
• You have a good credit history
  

The interest rate that applies to a loan withdrawn via an early access transfer may differ from the interest rate associated with the loan that replaces it. Consequently, the outgoing lender may receive less than the current face value of their loan.

For example, if the interest rate of a replacement funder’s lending order is greater than the interest rate on the relevant early access loan, we will discount the early access loan. This ensures that the economic return expected by the replacement funder (given the rate specified in their lending order) is met, and also means that payments under the early access loan remain the same.

For example, say an individual loaned $1,000 in the 3 Year Income market at a rate of 8% per annum. If, when they seek to withdraw their loan using an early access transfer, the prevailing interest rate in the market has increased to 10% per annum, we will use the capital discount to ensure that the lender who replaces them (at 8% p.a.) receives an economic return equivalent to 10% per annum. In other words, we would discount the value of the outgoing lender’s loan to ensure a fair return for their replacement.

Where an outgoing lender receives less than the face value of their loan following an early access transfer, they may be able to recognise the reduction in value of their loan interests as a tax or capital loss.

Yes. Investors will not know if they are funding a new borrower loan, or replacing an outgoing lender via a loan to the early access facilitating partner. 

Plenti prides itself on reviewing loan applications in a fast and frictionless manner. It takes just five minutes to submit an application. Once we have received all required documents we aim to provide you with an outcome within 2 business days.  

A notice of assessment is an annual statement provided by the Australian Tax Office after you have lodged your tax return. It contains an itemised account of the amount of tax you owe on your taxable income, as well as details such as whether you can expect a tax refund or tax credit.  

BankStatements.com.au is a trusted financial data platform used by many of Australia’s largest financial institutions to retrieve customer bank statements in a safe and efficient manner.

BankStatements.com.au takes your data security seriously: your online banking credentials are never stored, and your data is encrypted with bank level 256-bit encryption.

Once your loan application has been approved and you have accepted your loan contract, we will transfer the funds the following business day. They should arrive into the relevant account within one to two business days.

If we approve your loan application, you will have two weeks to accept the loan before your approval is no longer valid. If you need additional time, please contact us.    

Loans to borrowers may be secured or unsecured. You do not choose whether your funds are matched to secured or unsecured loans. 

Unfortunately, we cannot disclose specific reasons as to why we have been unable to provide you with a loan. However, broadly speaking, when we assess an application, we look for evidence of how suitable the loan is with regards to your current circumstances and the purpose for which you require the funds. We also take into account your employment details, income, and expenses, as well as your financial history as evidenced by bank statements, credit bureau information, and any other details you communicate to us.

We also consider your credit file as provided to us by Equifax and/or Illion, our credit bureau partners. If you would like more information regarding your credit file, you should contact Equifax and Illion directly.

Yes, you can. By combining the 'Reinvestment' and 'Auto-Withdrawal' settings, you can re-invest only the principal component of the payments you receive and draw an income to your nominated bank account.

How to enable the reinvestment of principal amounts paid

Log in to your Plenti account, then click 'Reinvestment settings' in the left-hand menu. You can then enable the reinvestment of your principal from the relevant lending market to the lending market of your choice. Interest will accumulate in your holding account as it is paid.

How to automatically withdraw the balance of your holding account

To automatically withdraw the accumulated interest in your holding account to your nominated bank account at a frequency of your choice, simply enable the auto-withdrawal setting. Log in to your Plenti account, click 'Withdraw funds' in the left-hand menu, and then choose 'Auto-withdrawal' and follow the prompts. Please note that you will need to have made a successful manual withdrawal before being able to use the auto-withdrawal feature.

If we approve your loan application, we will let you know by email and the acceptance process is completed online.

To accept your loan, simply follow the prompts in your approval email to create your Plenti account, review your loan contract, and accept its terms and conditions.

The rate that applies to your loan is set by the everyday investors who fund your loan in our lending markets. As a result of the unprecedented economic uncertainty caused by the COVID-19 pandemic, we have experienced greater than usual volatility in our lending market rates. We anticipate interest rates will stabilise over time.

Why has my interest rate changed since I submitted the application?

After you submit your application we complete a hard credit check and review the application details, which may have impacted your customised rate. Furthermore, our lending market is live and your rate can vary based on the rates in our lending markets.  

Plenti uses greenID as a secure and simple way to verify your identity electronically as part of your application. 

You can login to your account via the Members Portal using your email address and password.    

Plenti is required to verify the identity of all applicants by law, including under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

Most applicants can complete their identity verification online, however, we may ask you for further documents if we are unable to confirm all of your details.

Does the Provision Fund guarantee I will not suffer a loss?

No. We believe the Provision Fund provides meaningful protection for investors, and to date, no investor has lost any principal or interest due. However, it's important to remember that the Provision Fund is neither a guarantee nor an insurance product and your capital is at risk. Hence, in the event of a borrower late payment or default, an investor may not be fully or partially compensated.

If you are not compensated by the Provision Fund in the event of a borrower late payment or default, you may instead benefit from a number of debt collection or recovery processes undertaken by Plenti, which may or may not recover any funds.

Please read our Product Disclosure Statement for more information.

You can cancel your loan application by calling the Plenti customer service team on 1300 768 710. Alternatively, you can email your cancellation request to contact@plenti.com.au.    

Before you can start investing, you need to transfer funds into your Plenti account. To do this, log in to your Plenti account, then click ‘Transfer funds in’. The minimum initial amount you can transfer into your account is $10.

You can transfer funds into your account using BPAY or a bank transfer. If you choose to conduct a bank transfer, please make sure to include the payment reference we provide. This will help us identify your funds.

We will confirm via email when we’ve received your funds and made them available in your holding account. Funds will ordinarily appear in your holding account on the next business day after you make a transfer, depending on your bank.

There are some important factors to consider when reviewing the rates displayed on our website:

• Rates displayed on the website are described as ‘starting from’, which means they could vary
• Rates displayed on the website are calculated based on an individual with an excellent credit history
  
• All rates you are charged or quoted are personalised to your individual circumstances.
  

Our interest rates are determined by a number of different factors, these may include the loan term, your individual circumstances and the rates currently available on our lending markets.

If you are having trouble making your repayments, or require assistance due to financial hardship, please don’t hesitate to contact us by phone on 03 8592 7029 or email at hardship@plenti.com.au. 

You can submit a hardship application to us over the phone, or by completing and submitting the hardship application form below. 

Submit enquiry

If we approve your financial hardship application, we will make a variation to your loan contract, for example by offering reduced monthly loan repayments for a period of time. 

Need help managing your debt? These resources can help. 

Australian Financial Complaints Authority (AFCA) 
Call 1800 931 678 | Email:  info@afca.org.au | Post:  AFCA Limited GPO Box 3 Melbourne, VIC 3001

National Debt Helpline
Call 1800 007 007

Australian Securities and Investment Commission (ASIC) resources:
-Budget Planner
-Buy Now Pay Later services
-Interest-free Deal Calculator

What is One Score?

One Score is a new consumer credit score provided by leading credit score bureau, Equifax.

This new score provides lenders with a higher level of consumer credit risk prediction than CCR, enabling lenders to have a better picture of who they are lending to.

How is it calculated?

With One Score, credit history is evaluated using a rich collection of data. While data collected is entirely dependent on the individual, data sources may include: 

• Comprehensive Credit Reporting data
  
• Up to two (2) years of Repayment History Information (RHI) 
  
• Negative data coverage, including enquiries, defaults and public records
  
• Information from alternative data sources including Buy Now Pay Later services
  
• Information from geodemographic data sets to more accurately predict risk outcomes

Why has Equifax released a new credit score?

Equifax designed the new system to give a more accurate picture of a borrower’s creditworthiness in the current age, accounting for new consumer behaviours that weren’t relevant until recently. By reflecting these modern behaviours, lenders get a more accurate and relevant picture of their potential borrowers.

What does One Score mean for lenders and brokers?

Lenders and brokers will benefit from the increased accuracy One Score provides. In some case, this may allow the lender to increase the size of an approved loan and improve the alignment between price and overall risk.  In addition the one score should allow lenders to expand the borrower population eligible for credit.   In short lenders can approve more customers.

When will Plenti switch over to using One Score, and what support is offered?

Plenti personal loans will be assessed using One Score starting Tuesday, the 3rd of May, 2022. In the near future, we’ll be holding a training session with Equifax to give our broker partners the opportunity to learn more about the score model and ask questions. In addition, our BDMs, RMs and broker support members are trained in One Score and are prepared to answer any questions. 

Will Plenti still use Comprehensive Credit Reporting?

Yes, auto loan applications will still be assessed based on CCR scores until further notice.