Don’t sweat bad credit with a personal loan
Bad credit? Don’t worry
Bad credit might be an impediment in life, especially when it isn’t your fault. Defaults on your credit history can happen due to dodgy housemates, unforeseen accidents, and other misfortunes. That shouldn’t mean you’re punished for it forever. At Savvy, we can help connect you with a lender who meets your personal loan needs.
Forge ahead with better finances
According to credit reporting agency Veda, 600,000 Australians are at-risk for credit default. This means you are far from alone when it comes to having a poor credit history. Savvy understands this, and knows that a personal loan for debt consolidation purposes can give you a leg up out of debt and into good financial standing. Find out more about your options and start your application today.
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Your helpful guides to bad credit personal loans
Using personal loans as consolidation
Though many of us consider personal loans for use on cars, holidays, renovations, or family emergencies, bad credit personal loans can also be used as consolidation loans. Once approved, you can pay off smaller, high-interest debts in one “hit.” This means you only pay one monthly payment instead of many others. You should make sure that any outstanding debts being paid off don’t come with early repayment fees or other related charges which either partially or wholly negate the consolidation in the first place. In most cases, though, you’ll notice a clear difference (and saving) after combining your debts under one roof.
Bad credit loans vs. small personal loan
It’s important to understand the difference between regular bad credit personal loans and small personal loans, or payday loans. Small loans range from as little as $300 up to a maximum of $5,000 and can be repaid over terms of 16 days to two years in total. The biggest difference, however, is that these loans don’t really charge interest. Instead, they’re charged fixed, capped fees: an establishment fee of up to 20% of the cost of your loan and an ongoing fee of 4% of your loan with each payment. With this structure, you’ll know exactly what you’ll be paying for your finance deal well ahead of time. These loans also come with no early repayment penalties.
Personal loan over a balance transfer
Balance transfers can be a good way to get out of a large credit card debt. However, if you do not pay off the balance – or even add to it – within the zero-interest period, this can leave you worse off. Here’s why: personal loans are, on average, much cheaper than credit cards, especially in terms of interest rates. Credit card interest rates average around 17-19% p.a. A personal loan – even a bad credit one – could end up cheaper over time. Instead of making minimum monthly repayments, which ensures you incur interest, paying off a personal loan will guarantee an eventual zero balance, which means you can leave your finances in better health compared with when you started
Can I get a secured personal loan?
Though most personal loan products are “unsecured” i.e., they do not have an asset which the loan is tied to, some personal loans can be secured to a high-value asset such as a car. This can increase chances of approval and lower your offered interest rate. However, if you default on your loan, your lender has the right to repossess the collateral to recoup the costs on lending you the money as a last resort. It’s important to note, though, that most bad credit personal loan specialists don’t offer secured personal loans as an option, so if you have your heart set on one, you’ll have to do your research to find a lender who can accommodate your needs.