Secured personal loan – you’ve heard of them, haven’t you. But what, exactly, does it entail?
For most people, borrowing money happens at some stage in life. There are as many types of loans as there are reasons for taking them out, giving us all a variety of options to choose from. A secured personal loan is just one type.
What is a secured loan?
A secured loan is a loan that requires an asset to be tied to the loan as security for the lender. This is to protect the lender if you were unable to repay the loan. In other words, if you default on your loan or can’t pay it back, the asset can be seized and sold to make up for the lost money. That’s the worst case scenario – in our experience, our clients take out a secured loan because they need a slightly bigger loan – of $2,000 to $4,600 – to consolidate debt against security. It’s a larger loan with one manageable repayment.
Some assets that can be considered are:
Savings or investments
At Jacaranda Finance, we would consider a car, motorbike, caravan or boat as security that could be tied to your loan.
You’ve probably come across secured loans before without realising it. Take a look at these.
Some types of secured loans:
- Mortgages – a mortgage is a type of secured loan since the loan is tied to the property. The house or property is the asset that protects the lender if you were unable to repay the loan.
- Car loans – another type of personal loan is a car loan. These loans allow to borrow money to pay for the purchase of a vehicle.
- Personal loans – secured personal loans can be used for any purpose and secured with all types of assets – just make sure you check what your lender accepts as security.
- Here’s something important to make note of – unlike a car loan, which is used to buy the car that then becomes the security tied to the loan, a secured personal loan can only be secured with an asset you already own.
Where can I find secured personal loans?
If you’re after a secured personal loan, look no further than Jacaranda Finance. Head to our home page or scroll up a bit and fill in our quick and easy online application form. It’ll take you less than 5 minutes!
How to apply for a secured personal loan?
To apply for a secured personal loan, all you need to do is fill out our simple application form. It will ask you details about your personal information, as well as your purpose for the loan.
What are the eligibility requirements for a personal loan?
In order to, be eligible to get a secured loan there are few basic requirements that you’ll need to meet:
- Must be at least 18 years of age
- Need to receive a regular income
- Must be an Australian citizen or permanent resident
- Can’t be declared bankrupt or in financial hardship
- Must have a contact number and email address
- Need to have internet banking set up
What information do I need to provide to get a secured personal loan?
To apply for a secured personal loan, you’ll need to have your contact details handy, as well as your internet banking details. We will also ask you to provide us with 100 points of ID.
To find out more about what is needed to make up the 100 points of ID this is a useful link to check out
If you receive government benefits, make sure you have those details handy.
Once you’ve submitted your application, make sure you keep an eye on your mobile phone for a call or email.
How much can you borrow with a secured personal loan?
With a secured personal loan, you can borrow up to $4,600 with Jacaranda Finance. If you’re looking for an amount of $2000 or less, an unsecured personal loan, we may be able to help you too. If you’re not quite sure if you qualify, your best bet is to apply, and let us take a look.
How long does the loan term last for?
A secured personal loan with Jacaranda Finance can carry a repayment term of 13 to 24 months.
How much do secured personal loans cost?
A secured personal loan carries with it an establishment fee of $400 plus 48% in annual fees.
Let’s look at an example of how much a secured personal loan would cost:
Say you would like to borrow $3000 repaid over 18 months:
- It will cost an establishment fee of $400 and $1,378.87 in other fees
- The total repayment amount will therefore be $4840.14
How does repayment work?
Repayments on a secured personal loan work by setting up a direct debit with us. That way your payments can be made automatically without you having to worry about doing them all yourself.
Why do people apply for secured personal loans?
Secured personal loans can be used for a variety of different purposes. Here are some examples of reasons people choose secured personal loans for:
- Car repairs or maintenance
- Wedding expenses
- Moving costs
- Home renovations
- Child care costs
- Medical bills
- New furniture
- Down payment on a car
What are secured car loans?
Secured car loans are loans that allow you to borrow money to purchase a vehicle. The vehicle can then be used as the security for the loan.
What are secured car loan rates?
Secured car loan rates can vary from lender to lender. However, with Jacaranda our secured car loan rates are 48% (APR). Though to our comparison rate is 66.0347% per annum.
A good way to calculate how much your loan repayments will be to use a secured car loan calculator:
Can you get secured loans if you have bad credit?
You can apply for secured loans if you have bad credit. We assess people on a case by case basis, so even if your credit rating is less than perfect you may still be able to get a secured personal loan with Jacaranda Finance. That’s because we understand your credit rating may not be true reflection of your actual relationship to money and credit. We prefer to look at your recent relationship with credit. We use the latest technology that allows us to look at your most recent financial transactions to see if you can safely manage financial obligations.
What’s the difference between secured and unsecured personal loans?
While secured and unsecured loans are both types of personal loans, there are a few factors that differentiate them from one another.
With secured loans you can usually borrow larger amounts since the lender is protected with a security.
Unsecured loans usually charge higher fees since they are riskier for the lenders.
If you default on your payments on the secured loan, the lender is legally liable to repossess your assets.
If you default on an unsecured loan the lender could pass you onto a debt collector.
An asset refers to an item that has economic that could be converted into cash. Assets include property, vehicles, land, savings accounts and investments.
This stands for Annual Percentage Rate (APR). It is the rate of interest charged as the cost of borrowing the loan. It therefore describes the overall amount of interest you’ll pay for the loan over a whole year.
When you are declared bankrupt, it means that you are unable to pay your debts. It helps you to release yourself from your debts, and give yourself a fresh start. It normally lasts for 3 years.
These are useful tools to help consumers to understand the true cost of a loan. It combines the interest rate as well as the other fees and charges, to allow consumers to accurately compare loans.
This is a number given between 0 and 1200 that reflects your history of using credit. Lenders use this credit rating to determine whether they want to lend credit to you or not.
Your credit report is a breakdown of the information reflected by your credit rating. Some of the information that is shown on the report is the following: Personal information such as name, address and contact details. Other information includes history of your credit. Such as your payment history, as well as length of credit history, credit use and credit mix.
A creditor refers to the person or institution that lends you credit, with the intention of being repaid in the future. Another word for a creditor is a lender.
This term refers to an act of bankruptcy. It occurs when a person is unable to pay their debts. However, a debt agreement is less restrictive than bankruptcy.
When you have multiple debts that you are paying off with separate payments, it may seem slightly difficult to manage. Debt consolidation works by paying off all your outstanding debts with one loan.
This is a fee that you may be charged if you were to default on any payments.
A direct debit is an automatic payment method that you can set up with your creditor, and allow payments to be automatically withdrawn from your account.
Early termination fee
With some contracts, you may be charged an early termination or early exit fee. This also occurs with some loan contracts, so it’s important to check whether there are charges if you want to pay your loan off early.
Equity refers to the amount of value you have built up on an asset, such as a house. Equity can be explained as the total value of the asset minus the liabilities owed on that asset.
This is an upfront fee charge required when first taking out a loan. Check with your lender to find out how yours will be paid – often it is paid over the first few repayments.
A guarantor is a person who guarantees the loan. They are a type of security when it comes to get approval from a lender. The guarantor is legally responsible for repaying the debts of the borrower if they were unable to pay them to the lender.
This is when a person steals another person’s personal details to steal money from another person.
This the refers to cost of borrowing money overtime. It is often calculated as a percentage of the amount borrowed.
The interest rate refers to the percentage amount that is charged on the amount borrowed.
A liability is something that is owed such as a debt.
Similarly, to debt consolidation, loan consolidation allows you to consolidation multiple loans into one loan. It saves you from having to pay multiple interest rates.
A mortgage, otherwise known as a home loan is money lent to a borrower for the purpose of making a real estate purchase.
No Interest Loan Scheme
Is community initiative organised to help low income earners and families to have access to interest free loans.
A personal loan is a form of borrowing credit. Personal loans can be secured or unsecured. They can have a variable interest rate or fixed interest rate. And they can be short-term, medium-term or long-term.
This is the initial amount of money borrowed and still owing on the loan. It is the actual amount requested, before interest is added.
The act of refinancing, refers to the change from one loan to another, in the aim of getting a better rate. This is most commonly found with refinancing mortgages.
A savings account can also be considered an asset. Savings accounts are accounts designed to store and save money since they have higher interest rates to help you accumulate capital and save more funds.
Secured loans refer to loans that need to be tied to a security. The security can be an asset, such as a vehicle or property.
Is the asset that secures the loan for lender.
This is a type of loan that does not have to be tied to an asset as security. Though this type of personal loan has higher interest rates.
In summary, secured loans are simple to apply for and you can get them right here online with us. So, if you needed to make a much-needed purchase a secured personal loan might be exactly what you need to make that happen.