If you’ve been considering applying for a Personal Loan, there are a few things you should be aware of before you submit your application. From choosing the right interest rate to determining your borrowing amount and loan features you require, there’s a lot to consider.
But do you need a down payment for a Personal Loan? In this blog, we’ll answer that question and share other essential information you will need to provide as part of your application.
Do you need a deposit for a Personal Loan?
No, unlike a Home Loan, which requires borrowers to put down a deposit, Personal Loan do not require a deposit, also known as a down payment. Borrowers can simply submit their application and wait for the lender’s decision. However, it’s worth noting that some lenders may charge an application fee as part of their process. Depending on the lender, these fees can range between 1 – 5% of your total loan amount.
Another thing to keep in mind when applying for a secured Personal Loan is that, while no deposit is required, you will be required to provide some form of security as collateral against the loan. For example, if you apply for a Car Loan, the vehicle will be the security. This safeguards the lender should a borrower default on their repayments, as the lender reserves the right to repossess the asset.
So, what do you need for a Personal Loan application?
If you are preparing to submit a Personal Loan application for the first time, it’s important that you understand what you will need to provide. While each lender has different requirements, the following are some of the most common pieces of information you may be asked to provide:
- Personal documentation — This includes your full name, address, phone number, email address and proof of ID, such as your driving licence or passport. You will also need to provide your banking details, so the lender knows which account to deposit the funds into.
- Proof of income and employment — Lenders will require proof of income and employment to ensure you can successfully meet your monthly repayments, Payslips from the last three months are acceptable, as are bank statements showing regular income deposits. The lender may also request contact information for your employer for further verification of your employment.
- Loan amount and purpose — Personal Loans come in all shapes and sizes, with different borrowing limits offered by each lender. During your application, the lender will ask how much would like to borrow as well as the purpose of the loan, for instance, whether it will be used to purchase a car, take a holiday or pay for medical expenses.
- Existing debt and living expenses — If you have a credit card or another loan that you are currently paying off, you will need to inform the lender during the application process. This provides the lender with a complete picture of your financial circumstances, allowing them to provide you with a product that meets your needs.
- Collateral if required — If you are taking out a secured Personal Loan, you will need to submit documentation listing the details of your collateral. For instance, if a vehicle will be used as security, you may need to provide ownership documents for collateral.
- Other related documents — As no two lenders are the same, your chosen lender may have specific document requirements. To ensure your application goes smoothly, get in touch with the lender to ask what lender-specific application forms they may require.
Now that you have a better understanding of what a typical Personal Loan application looks like, all that’s left to do is find the right lender. For many Australians, however, this can be easier said than done. If you’ve been hit with rejections from traditional lenders, there is something you can do.
Finance One has been helping Australians get the financing they need for more than ten years by providing simple and accessible finance solutions. Finance One offers standard Personal Loans, Vehicle Loans, Travel Loans, Medical Loans and a wide range of Business Loans.
Experience the Finance One difference, submit your application today
Imagine a lender that actually cares about helping you achieve financial success. That’s exactly the kind of service you’ll experience with Finance One. With over a decade of experience, we’ve helped everyday Australians achieve their goals, from managing unexpected expenses to pursuing bucket list ambitions.
We welcome applicants who have been turned away from traditional lenders, have a limited credit history, credit file defaults or recently declared bankruptcy. Our loans are not only intended to assist you in meeting your financial goals, but also to instil accountability, so you can learn from your mistakes.
We’re proud to be a responsible lender and will only put forward lending solutions we believe will empower you to make smart financial decisions. Learn more about our compassionate lending and find out if you qualify for a Finance One personal loan by getting in touch today.
Disclaimer: The information above is of a general nature only and does not consider your personal objectives, financial situation or particular needs. You should consider seeking independent advice regarding your legal, financial, taxation or other needs, to check how the information relates to your particular circumstances. We do not accept responsibility for any loss arising from the use of, or reliance on, the information. All loan applications are subject to normal lending criteria. Fees and charges payable. Terms and conditions apply.
