Compare guaranteed personal loans
If you need assistance in making a larger purchase such as a new car or important appliance, taking out a personal loan with a guarantor can be a great way to access the funds that you’re looking for. Find out more about guaranteed personal loans, how they work and compare your options right here with Savvy.
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|Wisr Unsecured Personal Loan|
Borrow between $5,000 and $64,000 with great low rates for excellent credit. Get a personalised rate estimate in 2 minutes that won't impact your credit score.More details
|Plenti Unsecured Personal Loan (Excellent Credit)|
Apply for an unsecured personal loan and enjoy low rates for excellent credit. With no early repayment or exit fees, there’s a lot to love about this loan.More details
|OurMoneyMarket Unsecured Personal Loan|
Apply for an unsecured personal loan between $2001 to $75,000 for a variety of loan purposes. Get a personalised rate estimate in minutes without impact your credit score.More details
|Harmoney Unsecured Personal Loan|
Borrow up to $70,000 with personalised rates and repay over 3,5 or 7 years loan terms.More details
Disclaimer: A comparison rate indicates the true cost of a loan. The comparison rate displayed for this advertiser is calculated based on a loan amount of $30,000 over 5 years and represents the effective rate on the loan. Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.
Guaranteed Personal Loans
How does a guaranteed loan work?
Guaranteed loans are simply secured personal loans which utilises security provided by a third party, known as the guarantor (such as a parent or family member). This can sometimes involve the guarantor providing an asset as collateral. In the same way as regular secured loans, this asset can be a new or used car, equity in a property or, less commonly, high-value assets of other sorts such as jewellery or rare metals.
Guaranteed loans are necessary in some cases, as potential borrowers may need to access funds but might not be eligible to borrow the amount they’re looking for. This may be because their borrowing power doesn’t match their needs or that they’ve struggled with credit previously.
In the event you default on your repayments, your guarantor will be responsible for covering your debts. Once the loan has been repaid in full, your guarantor will be released from your agreement and will simply retain full control of the asset provided as collateral, with no future obligations towards either yourself or your lender.
Once your initial loan has been resolved, you might find that you’ve built positive credit reporting, which can increase your score and make it easier for you to get approved for loans in the future, perhaps even at lower rates and without guarantors.
What is the best way to compare guaranteed loans?
When comparing personal loans, there are some fundamental points which are important to consider, including the following:
In order to keep the overall cost of your loan to a minimum, you should make sure that you target a loan with the lowest possible interest rate. Even small differences in your rate could end up saving you hundreds of dollars over the life of your loan. For example, a $30,000 personal loan repaid over five years at 7.5% p.a. would cost approximately $6,068.31 in interest. However, increasing that rate by 1.5% to 9% p.a. would raise the total cost by almost $1,300 to $7,365.04. Opting for a guaranteed personal loan can help you access lower interest rates than you otherwise would’ve been eligible for.
There’s a range of fees that can be charged on your personal loan. The two most common are ongoing monthly fees and application fees, which can set you back between $0 and $10 per month and $0 and $595, respectively. It’s important to compare loans based on fees as, like interest rates, seemingly insignificant differences can help you save in the long run. Additionally, most loans come without penalties for early repayments, but you should always double-check to make sure.
Depending on the nature of your situation, you might wish to find a loan that offers features such as redraw facilities, customisable repayment frequency or early repayment options. If you can find a loan that includes these at little or no extra cost, this might be an attractive option for you. It’s important to bear in mind that you should only look to secure extra features if you intend to use them, as you may be paying for something that serves no use to you otherwise.
You will need to make sure that the assets which are eligible to be used with your financier are in line with the assets available to your guarantor to offer as security. For example, your guarantor might not be comfortable offering equity in their home as security, so will only be able to offer funds in a fixed-term deposit. Your lender will need to be willing to approve of these particular assets in order for your loan application to be successful.
Length of loan term:
Because your guarantor will still want to maintain their own financial flexibility for the future, you should consider the most appropriate loan term for both you and them. This will entail making sure that the loan term will be suitable relative to your ability to make your repayments, as well as your guarantor’s preference for how long they’re willing or able to have their asset ‘locked in’ to your agreement (the asset is unable to be sold or replaced whilst serving as security).
It’s important when looking at the maximum amount of financing available to you that it doesn’t exceed the value of your guarantor’s assets which are being used to secure the loan. For example, if your guarantor has a vehicle worth $4,000 that they’re willing to offer as security, you’ll need to make sure potential lenders offer this amount with an accommodating minimum borrowing range.