Find the best loan in Australia with Lendela

What is a loan?

A loan is basically borrowing money or property from another person or entity, which has to be repaid according to an agreement between the lender and the borrower. These agreements typically include terms borrowers have to follow, such as a repayment schedule where you will have to pay off your borrowed amount plus interest and fees, over time. Loans can come in many different shapes and forms, like unsecured loans and credits, and loans for specific purposes such as car loans and mortgages. We will look into the different loan types available in the market further down in this guide.

Who can give out a loan in Australia?

Before granting a loan to anyone, all financial institutions in Australia must be licensed by the Australian Securities and Investments Commission (ASIC).

If you are unsure whether your lender is registered, or if you want to make sure that Lendela is qualified to match you with a loan, visit ASIC's registry of credit providers to ensure you are dealing with a licensed credit provider – it's always a good idea to double-check who your loan broker or actual loan provider is before dealing with them!

Here is a general tiered list of the different banks and alternative lenders that typically provide loans in Australia:

• Major banks (Australia and New Zealand Bank, Commonwealth Bank of Australia, National Australia Bank, Westpac, Macquarie Bank)

• Alternative lenders (there are more than 600 of them!)

Despite the fact that many people prefer going to major banks for convenience and security reasons, there are many advantages to borrowing from an alternative lender. Processing speed, flexibility in terms of loan structure and less conservative credit score criteria are all examples of that.

Who is eligible to take up a loan in Australia?

At Lendela, our business is to make sure that anyone is able to find the right loan for their needs. Though our broad panel of partnering lenders is enabling a rather generous and flexible set of criteria, there are some basic guidelines enforced by the Australian Securities & Investments Commission (ASIC) that both Lendela and our lending partners have to follow when deciding if you are eligible for a loan.

You generally need to:

• Be at least 18 years old

• Meet a minimum income requirement (varies from lender to lender)

• Have a credit score that is decent to very good

In other words, before granting a loan to a borrower, financial institutions must ensure that they are lending money responsibly and only to borrowers who they believe can repay the loan in a trouble-free way. Always double-check with your chosen lender on their specific criteria, especially for different types of loans.

What types of loans are there?

Loans in Australia generally fall under these broad categories:

• Personal loans

• Housing loans

• Business loans

• Education loans

• Car loans

Note that loan products such as debt consolidation, balance transfer, and line of credit are falling under the personal loan category.

What is the cost of a loan?

It largely depends on the amount you borrow and the loan type you choose, as well as the loan terms that apply to your specific loan. The terms normally vary depending on the policies and individual risk assessment checks performed by each lending entity, and on your financial situation and credit rating. Altogether, these factors determine things such as interest rate, tenure, potential fees etc.

How are the loan terms decided?

Loan terms are generally determined by ASIC's regulatory guidelines; however, these terms may differ for the same type of loan offered by the same or different lenders.

For example, you might have a personal loan with a principal payment term and another personal loan with an interest-only payment term. Despite being the same loan product, the payment terms for these loans are different – that is one important thing to note when comparing your loan offers.

Keep in mind that fees and interest rates are part of any loan agreement, so expect to pay a little more than the actual amount you are looking to borrow.