No Guarantor Loans in Australia – What You Need to Know

financial situation

When applying for a loan, it is important to make sure that you are aware of the current state of your finances. Not only can your credit score greatly impact your chances of being approved, but it can also limit the amount that you are able to borrow. In this article, we will be providing you with insight into how you can apply for no guarantor loans with ease. 

What Is A No-Guarantor Loan?

A no guarantor loan is a loan that you can apply for without the need for security or a guarantor for your loan to be accepted. A non-guarantor loan is a loan type that allows you as a borrower access to the funds in a financial emergency without the need for an additional person to co-sign on the loan, even if you have a poorer credit score.

Is A Loan Without A Guarantor Expensive?

No, a loan without a guarantor is not more expensive as the APR and interest rates completely depend on the state of your credit score as well as your monthly income at the time of the application. Though a guarantor loan does offer that additional layer of security to the lender, it is important to note that any loans such as this should only be used in a financial emergency. Regardless of whether this is a Payday Loan or a no credit check loan , there are several ways that you can use this loan type when struggling in a financial emergency.

What Can A Non-Guarantor Loan Be Used For? 

Though applying for a loan type such as this should be saved for financial emergencies only, many are still unsure what the loan can be used for. Though it may seem tempting to use a loan such as this for a holiday or for a new television to replace the old model current sat in your living room, it is important to make sure that you are using non-guarantor loans to cover emergencies such as emergency car breakdowns or home and boiler repairs that you may not have the money left in your budget to cover.

How to Apply for This Loan Type

Should you find that the loan type is the right one for you it then comes time to apply. With several lenders allowing for a quick application process through their online platform, applying for a loan type such as this could not be any easier. With a simple form to fill out at the time of application providing them with information that they need on their monthly income as well as the current state of your credit score. From there, the lender will check your credit score and eligibility to determine if you can afford repayments, with the money being paid into your account if you have been successful in your application.

Though this application process may take time, it is important to make sure that you are considering the current state of your finances before applying as this will aid in ensuring a successful application.

Recommended Reading: 3 Steps To Clean Up Your Credit Report

3 Types of Debts You Should Focus on First

Types of Debts

You’re having a laugh with a friend when they mention that they’ve paid off their mortgage loans or that they’re finally done with college student debts. Your mood instantly turns dark as you realize your situation is the exact opposite. Knowing these types of debts can help you organize your plan how to pay them faster.

You go home, whip out your calculator, and there’s a dizzying list of numbers and figures and percentages and dollar signs. Your debts are crippling, and so are you. So how do you begin paying off these debts? Well, there are a couple of ways to arrange your debt payments in order and achieve your financial goals. Here you go:

1. Secured vs. Unsecured Debts

As you know, while signing a debt contract, there are two types of debts. The ones that have collateral against their monetary value, otherwise known as secured debts. The others are unsecured debts, against which there are no collaterals. The collateral maybe your car, your business, your stocks, or even your residential property.

So while arranging a debt repayment plan, you have to choose between secured and unsecured debts first. In secured debts, something precious to you is actually at stake. You might lose your possession if you do not pay the debt in time, so it makes sense to just clear the secured debts with whatever you can arrange. 

On the other hand, your unsecured debts can become pretty troublesome if you delay them for too long. The pressure will just mount higher, and late payment may also affect your credit score. 

Both are risky, and both are urgent. You just have to keep a balance between the two sets and figure out a repayment method with the least losses incurred.

2. Debts with the Highest Interest Rates

This category is also pretty crucial in figuring out which debts you have to pay back first. The debts with the highest interest rates, such as those on a credit card or a mortgage loan. Other debts, such as student loans or other personal loans, have lower interest rates, which do not accumulate as fast as the higher interest ones.

In this way, it’s usually beneficial to pay back loans in their elevating interest rate. The higher the rates, the sooner you should try to get rid of the debt. This way, you’ll be able to reduce the more significant debts quickly and will be able to focus better on the smaller ones.

3. Small Debts

Many people follow the total opposite of the highest interest rate. They use the debt snowball method by starting paying off their debts with the smallest ones right up to the largest one. This way, you can get rid of the number of debts on your credit sheet and focus much better on the larger ones. In this type of debt arrangement, you don’t have small debtors nagging you for repayments every single day, which is a great benefit in itself.

Conclusion

Debts are terrifying. They keep us up at night. However, paying debts back is not impossible. You just need the right strategy to arrange how you will pay back the different debts you have under your name. From debt, you may then start thinking about how to build your emergency fund.

How to Choose Your Student Loan

Student Loan

Choosing the right student loan can seem like a daunting task. In order to get the right amount of money, and the best interest rates, you need to do a bit of shopping around instead of just choosing the first one you see. Student loans come in all shapes and sizes. Let’s take a look at some of the key things to consider when choosing student loans.

1. Interest rates

The first thing to note about interest rates on student loans is that they can either be fixed or variable. If they’re fixed, the interest rate won’t change over time. But if they’re variable, they can. This is important as you could end up paying different amounts of interest each year.

If you choose a subsidized federal student loan, with a fixed interest rate, the federal government pays the interest while you’re still in school. If it’s a Direct PLUS loan, you will pay interest while you’re in school. The rate is fixed until you pay it off too, between 2.95% and 9.15%. For private loans, variable interest rates can range from 1.02% to 12.37%.

2. Fees you might have to pay

Along with interest rates, there may be other fees associated with your chosen student loan. These are usually quoted as a percentage of the total loan amount. The fee usually comes off the amount of money you receive per payment, so you pay the fees automatically.

For federal loans, fees can range from 1.057% to 4.228%, depending on whether it’s subsidized or not. Loan arrangements may also have late payment fees to think about when it’s time to start paying it back. So, it’s vital that you always repay your student loans on time!

3. Maximum loan amount

The third thing to consider when choosing between student loans is the loan amount itself. The maximum amount of money you can borrow depends on a number of factors. These include your credit score, your degree type and which year of school you’re in.

With a federal loan, most undergraduates can borrow between $5,500 and $12,500 per year. Postgraduates are generally able to borrow up to $20,500 per year. Loan amounts for private options vary just as much. There are options for as little as $1,000 up to the full cost of your tuition, so they often offer more flexibility at the cost of higher interest rates.

4. Repaying your student loans

While the above factors will contribute to how you repay your student loan, it’s also important to consider the repayment terms. Most loans, both federal and private, will offer a 6-month grace period for undergraduate loans.

While private loans tend to be less flexible in terms of repayments, federal loans offer a bit more wiggle room for those facing financial hardship. If you’re in the world of teaching, military service or other public services, there may be debt forgiveness options available to you. So, it’s always worth checking if you’re eligible to have some of your student loan debt forgiven and make sure you clean up your credit report.