5 ways a personal loan can help you

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Not all debt is bad debt. With the right advice, you can use personal loans to get ahead and improve your overall financial wellbeing.

If you’ve never considered taking out a short-term personal loan, you might be surprised to find there are at least 5 ways they can benefit your financial situation and improve your standard of living.

Home improvements

The first way a personal loan can benefit you and your family seems pretty obvious when you think about it. Home improvements and renovations are almost always a sound investment, and in most cases they’ll add significantly more value to your property than what you spend on them.

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Home renovations can be a good investment. 

If you don’t have the spare cash or the equity for the renovations that you’d love to get on with, personal loans can be a good way to finance them. You’ll probably be surprised to find the interest rates a lot more affordable than you imagined, and the short term of the loan is just long enough to get you through to the other side of the renovation where you can have your property re-valued.

The right renovations—especially kitchens and bathrooms—will deliver a great return on investment, so sometimes it’s worth the little extra interest to get the ball rolling.

 Personal Loan or Credit Card?

There are a bunch of reasons you might think about racking up some debt; a looming wedding, an overdue vacation, or fixing an ailing car.

You might be able to choose between using a credit card or a Personal Loan to fund the expense – but which is the better way to go? While their interest rates might not differ greatly, there are several things to consider when choosing between a Personal Loan and a Credit Card.

Personal loans are repaid over a set term so you know how long you’ll be committed for and can plan your finances accordingly. Credit Cards have no set term so they need a great deal of self-discipline if you’re going to settle the debt within reasonable time. If you only pay the minimum repayment amount each month, the loan balance won’t reduce and you’ll be in debt for an extended period.

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Maybe it’s time to use your credit card less? 

A Personal Loan is for a set amount whereas you can keep on drawing from a credit card which (if not controlled) could get you into hot water! Everyone’s different and only you know what loan product would suit you best.

If you’re wanting to start a new business, or buy equipment like computers for a business you already run, you could save a lot in the short term by getting a personal loan. Most business expenditure is tax deductible, but you won’t see the benefit of it at tax time if you’ve been paying huge amounts of credit card interest for more than half the year when you didn’t need to.

Medical emergencies

There’s another obvious way a personal loan can help you: by getting you through a rough patch following an accident, illness, or other medical emergency.

Many medical expenses can be claimed under government allowance or private health cover, but in most cases you have to cough up the amount in full first. You might even be putting off important treatment because you can’t afford it, which is only going to hurt you more in the long term.

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You can’t plan for your sudden medical emergencies. 

Most people don’t have that kind of money lying around. And even if you’re a public patient and your hospital expenses are virtually free, there’s a good chance your outpatient treatments, medications, or unpaid time off work will cost you a lot. A personal loan can get you through periods like this if and when they happen. 

 

Improved credit rating

A little-known benefit of personal loans is improving your credit score. Taking out a personal loan—or, more specifically, being approved for one—boosts your score instantly, and paying it off on a regular schedule (and not in a lump sum) will push it up further.

A short-term personal loan can mature in just a few months, so you usually won’t have to wait very long for it to take effect and improve your credit score.

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Your short term loan can easily improve your credit score.

This is particularly helpful for those people trying to break into the property market in tough conditions. Taking out a personal loan and paying it off diligently over the loan term could be the thing that brings your credit score up high enough for a real loan—a mortgage.

Reduced debt

Taking a personal loan, when planned sensibly on solid advice, can help you consolidate and reduce your debt. If you’ve got debt spread across high-interest finance sources like credit cards, taking out a personal loan can help you to regain control of your finances.

Credit card interest can get away from you, making loans a better option if you’ve got the capacity to finance the loan and pay it off in the specified loan period. Because personal loans have a comparatively short loan term, they won’t suit every situation, and some debts are better resolved with professional consolidation.Find out how to get mortgage refinancing consolidation.

You’ll definitely need the right financial expertise to help you determine whether a personal loan is the right option to reduce your debt, but it’s certainly a potential solution for those struggling with big interest repayments.

 

Always get informed advice before making financial decisions that could affect your long-term financial wellbeing. For more information on personal loans and how they might benefit you and your family, contact Jacaranda Finance, and we’ll be happy to share our expertise and help you invest in a brighter financial future.



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Fast & Safe Loans

Small Personal Loan

Loan Amount

Minimum
$300


Maximum
$2,000

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Terms

Minimum
12 Months


Maximum
12 Months

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Costs

Up to 20% Establishment Fee
+ monthly fee up to 4%

Jacaranda Finance does not charge an annual interest rate on SACC loans. These small amount loans incur 'fees' instead of interest. The maximum comparison rate on our loans between $300 and $2000 is 199.43%.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Loan Amount of $1,000 over 12 months repayable weekly (50 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $480 (fees based on 4% per month over 50 weeks) = $1,680 total repayable in 50 weekly installments of $33.60.

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Medium Personal Loan

Loan Amount

Minimum
$2,100


Maximum
$4,600

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Terms

Minimum
13 Months


Maximum
24 Months

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Costs

Annual Percentage Rate (APR) is 48%
Comparison Rate is 67.41% per annum.

This comparison rate is based on a medium amount credit contract of $2,500 repaid over 2 years with a $400 establishment fee and APR of 48%.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
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Examples

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest*) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

Loan Amount of $4,500 over 24 months repayable weekly (104 weekly repayments). $4,500 (Principle Amount) + $400 (Establishment Fee) + $2,732.56 (reducing interest*) = $7,632.56 total repayable over 24 months with weekly installments of $73.39.

* Reducing intertest means that the 48% APR is applied to the outstanding balance on a loan. When a loan repayment is made, the loans outstanding balance goes down and the APR is applied to that lower balance. Therefore, the interest component of the loan will constantly reduce (as long as repayments are being made!) - thus it is called reducing interest.
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Large Personal Loan

Loan Amount

Minimum
$5,000


Maximum
$10,000

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Terms

Minimum
13 Months


Maximum
24 Months

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Costs

Annual Percentage Rate (APR) is 21.24%
Comparison rate is 48% per annum.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate
Invoice Icon

Examples

Loan Amount of $5,000 over 18 months repayable weekly (78 weekly repayments). $5,000 (Principle Amount) + $2,027.80 (Interest) = $7,027.80 total repayable over 18 months with weekly installments of $90.10.

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

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