The features to enjoy on a $7,000 personal loan
With lower loan amounts come more manageable monthly repayments, which makes it easier for you to juggle your loan payments with other expenses.
We’re partnered with lenders who can give you the freedom to pay beyond the minimum, enabling you to save overall by shortening your term.
Borrowers get to decide whether to pay monthly, fortnightly or weekly based on their preferences and which option suits their income flow the most.
Part of the beauty of unsecured personal loans is the speed at which they’re processed, with instant, 60-second approvals and funds transferred inside 24 hours.
Types of personal loan
With an unsecured personal loan, you can potentially borrow as much as $75,000 without the need to attach any valuable assets, such as your car, as security. These loans are the most widely available and often the quickest, with same-day approval possible.
Secured personal loans, on the other hand, make use of collateral. This lowers your risk profile in the eyes of a lender, potentially lowering your interest rate and expanding your borrowing power beyond what you may be able to get through an unsecured loan.
Variable interest rates remain open to fluctuation during your term. This means you can benefit from decreasing rates and save on your loan if the market heads in that direction, although you’ll also pay more if rates start rising.
Fixed interest rates are locked at the beginning of your loan and remain constant throughout your repayments. This acts as a valuable protection against interest rate increases, as your loan will be unaffected, but you’ll miss out on potential drops as well.
If you’re paying off multiple debts at the moment, particularly those with high interest (such as credit card debts), consolidating them into one payment can not only make them more convenient to manage but also potentially save you money overall.
Looking to take off on a holiday with your family but want to pay it off at your own speed? Travelling can be expensive, so you can distribute the cost of your next trip over a period you’re more comfortable with by taking out a personal loan to pay for it.
There are so many costs that go into making your dream wedding a reality, from venue hire to catering to dresses and suits and so much more. By taking out a personal loan, you can start planning the big day you want, even if you can’t pay for it upfront.
Home improvements are desirable for a range of homeowners to help keep their living space fresh and interesting, not to mention increase its value. You can get past the financial hit of renovations with a personal loan paid in instalments.
Personal loans aren’t limited to PAYG employees, though. If you’re running your own business, you can still be approved for financing by submitting tax returns and other alternative documents instead of payslips and utilise your funds however you wish.
There’s a variety of expenses which come with being a student, ranging from the cost of your courses, textbooks and computer to your accommodation. Taking out a personal loan can make these costs more manageable by spacing them out.
Some lenders offer green personal loans, which are designed to be used for energy-efficient appliances and products such as solar panel and air conditioning installation in your home. You can qualify for lower interest rates and fees with this loan.
Why compare personal loans through Savvy?
The factors which affect your personal loan’s interest
Your credit score
Your credit score is perhaps the most important factor that impacts your interest rate. This is because it provides a clear indication of your success when it comes to paying debt in the past.
Lenders assess applications based on risk, so they’ll increase rates where they believe there may be a higher risk of someone defaulting (such as a bad credit borrower). Conversely, having a strong record in this area will help you secure a low rate.
Frequently asked questions about $7,000 personal loans
More about $7,000 personal loans
How do I compare $7,000 personal loans?
There are many ways you can go about comparing different personal loan offers, which you can do right here with Savvy. We’re partnered with flexible lenders from around Australia to give you high-quality comparisons and provide you with all the key details you need to make an informed call on the best finance deal for your needs. You wouldn’t choose to buy the first car or house you saw, so why should personal loans be any different? The key areas to factor into your thinking are:
For smaller loan sizes of $7,000, it’s important to be able to select your preferred repayment term, as it can be the difference between costing you and saving you hundreds of dollars. Not all lenders will allow you to take as little as one year to repay your debt, enforcing minimums of two to three years in some cases. For example, a $7,000 loan at 10% p.a. repaid over two years would cost you $752 in interest but opting for a one-year term for the same loan would only result in an interest spend of $385. Your repayments would be almost doubled each month, but it’ll save you in the long run.
Of course, the rate you’re offered on your loan should have a significant bearing on your decision, as it’s one of the two direct main cost factors in your finance deal. The higher your rate, the more you’ll be required to pay. Fortunately, it’s simple to compare loans based on their interest rates, as lenders always put this figure front and centre of their advertising. Calculating the cost of different personal loans, you can see a $7,000, two-year deal would cost almost $170 more with a 13% p.a. rate compared to 11% p.a.
There are several fees which can apply to personal loans that are important to compare between different offers. While interest is still a major factor, fees can often be the greatest influence on the cost of a smaller loan such as a $7,000 finance deal. Establishment fees can cost up to $595, which is 8.5% of the loan cost in itself, while ongoing fees of up to $10 add up to $120 over the space of just 12 months. However, some lenders won’t charge one or both of these, so it’s crucial to look at this when comparing. Late fees of $15 to $35 will apply regardless, so you should always aim to avoid these for the sake of your hip pocket and credit score.
If you want a more accurate picture of the cost of your loan beyond your interest rate alone, all loans also come with a comparison rate. This figure incorporates both interest and fees into one percentage to give you a more indicative reflection of how much you’ll be paying for your loan. While it includes fees like establishment and ongoing charges, conditional costs such as late or early repayment fees won’t factor into this calculation, as these are largely conditional and may not ever need to be charged.
You should always ensure the lender you’re applying to has eligibility criteria which you’re able to satisfy. These are generally readily available on their sites, so you should review them or get in touch with lenders if you’re unsure of whether you qualify for financing. While these points differ, the general criteria you’ll have to meet are:
- You must be at least 18 years old
- You must be an Australian citizen, permanent resident or accepted visa holder
- You must be holding stable employment and earning at least $20,000 p.a. from consistent sources
- You must have a strong credit history without any prior defaults or bankruptcies
Having the freedom to make additional payments is incredibly valuable on personal loans, as it’s a way of helping you pay your agreement off sooner and save money in the process. Even paying $50 extra per month can make a difference, as it could save you $131 and shorten your term by three months on a $7,000, two-year loan at 12% p.a. Some lenders will charge you an early repayment fee for doing so, though, so you should always make sure you don’t cop a substantial fee in the process and compare lenders thoroughly beforehand.
There are other useful features which can come with personal loans, too. If you plan on making additional payments, you may want the flexibility and security of a redraw facility to give you access to those additional funds should you need them down the track. This saves on the hassle associated with looking for another finance deal, although withdrawing from your loan will undo any work done to shorten your term and save to an extent. On top of this, you should always keep an eye out for lenders who can accommodate your preferred payment frequency of either monthly, fortnightly or weekly.
How can I save on my $7,000 personal loan?
There are many ways you can go about reducing your finance bill even when it comes to a $7,000 loan. Some of the main ways to do this are:
- Make additional repayments: by contributing more than the required amount each week, fortnight or month, you can reduce your overall loan term and the amount of interest and fees you pay overall. For instance, by paying $75 extra each month on a $7,000, two-year loan at 10% p.a., you’d save over $150 and trim your term length by four months.
- Select a short loan term: the shorter your loan term, the less you’ll pay in interest and fees overall. This is because interest is calculated based on your outstanding principal, meaning the quicker your debt falls, the quicker the amount of interest you’ll be liable to pay will decrease in equal measure. If your loan comes with monthly fees, a shorter term will automatically save you compared to long-term finance.
- Compare your options with Savvy: it’s crucial to consider as many offers and lenders as you can before committing to a particular product or service. By comparing your options from a range of online Australian lenders, you can be more confident in making an informed call on which one is the best for your needs. Find the lender with the lowest rate and fees, suitable loan terms and any other added features which are important to you.
Will I need to provide security for my $7,000 personal loan?
No – there’s no need for you to put up a valuable asset as collateral for your loan when taking out financing as small as $7,000. It isn’t required up to $75,000, with lenders now offering large unsecured personal loans to borrowers who either can’t, or don’t wish to, provide any security as part of their agreement. The advantage of these loans is that they’re more widely available from a greater number of lenders and can be processed more quickly than secured finance.
However, there are several distinct benefits to offering up an asset like your car as security, the most important of which is that they typically come with lower rates and fees than unsecured loans. This can save you more than $100 overall in some cases, depending on your interest rate and loan term. However, it’s important to note that, in most cases, you won’t be able to take out a $7,000 secured loan. These are typically capped at a minimum of $15,000 to $20,000, making your decision simpler as a borrower.
Helpful personal loan guides
Still looking for the right personal loan?
Personal loans come in all shapes and sizes, so read more about the ways you can use them, as well as how they might work for you.