Cheap Loans – Do they Exist? How to Find the Best Deals on Personal Loans

Andrew Bell

Last updated: April 28, 2020

• 7 minute read

7 minute read

Cheap loans: fact or fiction?

We’re all looking for cheap loans online, but are they a real thing? Traditionally, personal loans have not been the cheapest of options, but times are changing. We live in a world where almost everything is available online and that includes a personal loan. The fintech game is getting more and more competitive and this is a good thing for borrowers. The speed and ease of online lending is why most consumers are opting for this method of borrowing, as well as the fact that you can snag a pretty good rate on a personal loan. Just make sure you do your research!  PS. If you need information on small loans, check out our link now.

Are cheap loans a real thing?

The word ‘cheap’ is somewhat subjective when it comes to personal loans. If you are planning on applying for a personal loan then it is really important to do your homework. When choosing a lender it is important to be aware of:

• Whether or not they comply with the Australian code of responsible lending;
• Your own credit score and how this could affect your chances at approval with a particular lender;
• Be aware of the fine print – what you see isn’t always what you get; 
• The interest rate associated with the loan;
• Any other payable fees or charges on the loan. 

If you’re considering applying for a personal loan it is essential that you take a hard look at your financial circumstances. Ask yourself whether you really need the loan and whether you are going to be able to keep up with the repayments. It is important to remember that defaulting on a personal loan could incur fees and could also result in a negative mark on your credit score. 

Borrowers should enter into a personal loan contract with their eyes wide open – so make sure to question your lender if there is anything you are unsure about.

How much does a personal loan cost? 

If you’ve been googling ‘where can I get a cheap loan’ or ‘cheap personal loans Australia’ then you’re probably curious as to how much a personal loan will actually cost you. The cost of a personal loan varies depending on the lender, however, the Australian government has capped the fees and charges payable on a personal loan to some degree. Here’s a quick breakdown of fee caps taken from the MoneySmart website:

Fee limits on small loans (less than $2,000) are as follows: 

• A one-off establishment fee of 20% (maximum) of the loan amount;
• A monthly account keeping fee of 4% (maximum) of the loan amount;
• A government fee or charge;
• Default fees or charges;
• Enforced expenses – if you fail to repay the loan these are the costs of the credit provider going to court).

Fee limits on medium ($2,001 – $5,000) amount loans are as follows: 

• A one-off fee of $400;
• A maximum annual interest rate of 48%, including any other fees and charges.
• A government fee or charge;
• Default fees or charges.

Fee limits on loans more than $5,000 are as follows:

• The fees and charges on all loans over the value of $5,000 or with terms of longer than 2 years must be no more than 48% annually (including any establishment or other fixed fees). 
• A government fee or charge;
• Default fees or charges.

For more information on personal loans, check the MoneySmart website. 

Secured and unsecured loans 

If you’re looking for cheap loans it is important to consider whether the loan amount is secured or unsecured.

Unsecured loans

An unsecured loan is any amount of cash under the value of $2,000 and does not require an asset as collateral. Unsecured loans are somewhat easier to come by as they are usually smaller amounts of cash. However, borrowers should be aware of the high interest rates that could be attached to the loan. It is important to clarify the terms and conditions of an unsecured loan before you sign an agreement. 

Secured loans 

Secured loans are cash amounts over $2,000 and require an asset attached as collateral against the loan. Most lenders accept a car, boat, caravan or motorbike as security. However, it is important to clarify this before signing an agreement. Secured loans can be trickier to obtain due to the fact that they are a bigger risk for the lender. If you’re looking for a cheap loan it is a good idea to shop around and compare a few different lenders before signing a contract.

Nifty’s top tips 

So, now you know a little more about how to find a cheap loan online, here are our top tips for when you think you’ve found the perfect personal loan:

• Don’t believe everything you read – a personal loan could sound great because it has a low interest rate or a longer repayment term. Yet, keep in mind that the longer the term – the more interest you will have to pay.
• Read the fine print – make sure you read through the entire loan contract and make yourself aware of the possible fees and charges payable on the loan. There could be account keeping fees or charges for payment defaults. 
• Check that the credit provider is licensed – all credit providers in Australia must be licensed with ASIC or be an authorised representative of someone who is licensed.
• Watch out for scams – make sure you do your research to verify that the loan company you are trusting is who they say they are!
• Ask questions – if you’re unsure about any part of your loan agreement get in touch with your lender straight away. 
• Find out the true cost – it is extremely important to find out the true cost of the loan before signing an agreement. Make sure you consider whether the loan is the most cost-effective credit product for your personal financial circumstances. 

Nifty Loans 

Nifty is the online lender more Aussies trust. If you’ve been searching ‘cheap loans now’, ‘cheap repayment loans’ or ‘cheap affordable loans’ then it is important to state that Nifty does not claim to provide cheap loans. Our team do, however, provide competitive rates on our personal loan products. Nifty is proud to be a responsible lender. That means we comply strictly with the Australian code of responsible lending to ensure we are providing safe and reliable personal loans. Not even bad credit needs to stand in your way. Our team take a realistic approach to lending. So, if your credit score is less than perfect you’re still welcome to apply. 

If you’re looking for a fast way to access safe and reliable cash then you might have just found the lender for the job. At Nifty, our entire process is online – from application to approval – you won’t even have to leave the comfort of your own home. You can apply for a Nifty little loan wherever you are and whenever you like, Australia wide! If you submit an application during AEST business hours our team will endeavour to get back to you with an outcome in 60 minutes. Once approved the cash could be in your account and ready to use in 60 seconds*.

*NPP enabled bank accounts. 

Who can apply for cheap loans?

This will depend on your lender, but at Nifty, we keep our application criteria pretty simple: 

• All applicants must be over the age of 18;
• You must have received some type of regular income for the last 90 days into a bank account that is your own;
• Applicants must have an active mobile phone number and email address that we can contact you on; 
• You must have internet banking set up.

What if I have bad credit?

Bad credit does not have to stop you from applying for a loan with Nifty. While we don’t claim to offer cheap loans, we can approve loans for people with poor credit. At Nifty, we look at more than just your credit score. Our team will take a look at factors like your income, employment status and current financial commitments to assess whether a personal loan is right for your individual financial circumstances. The best part is an application with Nifty is free! So, what are you waiting for? You could click the button below to apply now. 

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