Different Loan Options & Products You Can Consider to Get Financing
Do you want to buy a property but don’t have enough money? Have you dreamed of going on vacation in the Caribbean but couldn’t save as much as you expected? Don’t worry! You can rely on a loan to finance those goals.
However, if you take a look at the loan market, you will notice that there are lots of options. From various types of home loans to fixed-rate mortgage options, you can find dozens of solutions to choose from!
Therefore, to make the best decision, get an interest rate according to your needs, and make sure there are no issues when you start the process, you must have the help of experts!
Fortunately, we’re here! Westend Finance has an impressive team of finance specialists who know the market, have partnered with the most trusted lenders, and will do whatever it takes to find the right loan for you or your business.
However, we have a lot to do first. Before you start, check out all the types of loans available here!
Personal Loans
The broadest type of loan is this one. There are multiple financing options for individuals, whether you are looking for one with a variable interest rate or prefer a fixed-rate loan. In addition, you can find some options with repayment periods ranging from one year to seven years.
Personal loans are quite common because you can use them for almost anything. These are some acceptable ways you can use this type of financing for:
- Travel
- Pay for wedding expenses
- Home renovations and improvements
- Cover your medical treatment
- Consolidate multiple debts
- Buy a car or any other type of vehicle
- Buy computers or other high-priced electronic equipment
There are two types of personal loans: secured (you must offer security) and unsecured (the money is lent without security and lent based on an individual credit score).
Home Loans
While you can find many types of home loans, most focus on one thing: helping you buy the house of your dreams.
Depending on the option you choose, you can have a fixed-interest rate or connect your home loan to an offset account from where payments against the debt will be taken.
In addition, there are also some interest-only loans if you are looking for lower payments during the first part of the home loan term.
Auto Loans
Personal loans also include options for those seeking financing to purchase a vehicle from a dealership, auction house, or private seller.
Depending on the lender, you will need a “security” or collateral, which is probably the car itself.
As with other personal loans, you can also find options with different interest rates.
Business Loans
If you need financing to support your company’s operations or purchase commercial equipment, there are also some options. From machinery loans to business car finance, you can find different solutions!
When you obtain business financing, loan interest rates can also vary according to many aspects. In other words, you must set your goals and needs in order to find a suitable option.
Unlike personal loans, this type of financing is usually more strict, meaning you’ll likely have to meet more criteria. However, it can give you the funds your company needs with a variable or fixed interest rate according to your cash flow!
Chattel Mortgage
Among the different financing options for businesses, you can find in Australia, there’s also a chattel mortgage. It’s a type of loan that allows you to obtain the funds to purchase a commercial vehicle or equipment for business purposes.
When you get a chattel mortgage, the lender uses the car or piece of equipment you buy as a security against the loan. In other words, if you don’t meet the monthly repayments, they can take ownership of that asset.
Chattel mortgages are a popular contract type when it comes to financing business vehicles. At the end of the loan term, ownership is transferred to you.
Mortgage Loans
A mortgage loan can help you finance a house or apartment. You can find different mortgage options and financiers, including banks and private entities. Also, if you meet specific criteria, you may qualify for one offered by government agencies.
Mortgage loans usually have a fixed interest rate (which does not change over time) or a variable interest rate (the lender can adjust it at their convenience). In both cases, the property acts as collateral or “security,” meaning the financier can take ownership of it if you fail to meet monthly repayments.
Home Equity Loans
This type of loan is available to those who have some equity in their residential property. It’s also known as a second mortgage.
If you choose this type of financing, the equity or portion you own secures the loan. You can borrow a portion of your home’s equity (usually up to 80% of the property value) from a bank. The amount is paid as a lump sum, and you can repay it over a loan term convenient to you.
Debt Consolidation Loans
A debt consolidation loan allows you to apply for a new loan to pay out other multiple high interest loans, leaving you with one monthly payment, instead of trying to manage multiple accounts.
This option may be ideal if you have a debt with an interest rate that is too high since you could qualify for lower monthly payments or lower interest rates. Therefore, you can consider debt consolidation loans if you want to save money in the long run or alleviate financial burdens.
This type of loan should be considered carefully, and you want to make sure you are doing the correct calculations to ensure you are achieving a specific benefit or you are saving money.
Leisure Loans
Leisure loans are designed to help people purchase recreational vehicles, including bikes, boats, caravans, jet skis, and more!
Low Doc Loans
Do you need financing but can’t produce the documents that regular loans require, such as financial statements or tax returns? Don’t worry! Low-doc loans exist for this reason.
This type of loan has been designed for self-employed borrowers who cannot provide traditional documentation. There are specific terms and conditions to qualify for a low-doc loan, so we recommend getting in contact to discuss your scenario.
Frequently Asked Questions
No, they don’t. Even if you choose similar loans or the same type, interest rates can vary due to different factors, including the lender’s criteria, your creditworthiness, or the loan term.
Defining an average interest rate is difficult. However, as a general rule, mortgages have the lowest interest rates because they are backed by security.
Again, this depends on the lender. Some financiers allow borrowers to negotiate the loan term, while others may have fixed periods.
A loan interest rate can be affected by various factors, including the following:
- The borrower’s creditworthiness
- Loan terms
- Credit score
- Debt-income ratio
- The lender’s criteria
- Type of loan, whether you choose a fixed-rate loan or a variable rate loan
Yes, in Australia, there are different types of home loans, including the following:
- Bridging loans
- Construction loan
- Fixed vs. variable home loan
- Interest-only home loan
- Introductory loan
- Line of credit loan
- Low-doc loan
- Self-employed home loans
- Variable (principal and interest loans)
- Split rate (principal and interest) loans
In some cases, the interest rate you must pay for a home loan, or any other type of financing is subject to movements set by the Reserve Bank of Australia.
An interest-only loan is a financing option that allows the borrower to pay only the interest of the loan for a certain period.
If you get an interest only home loan you can enjoy increased cash flow and better manage your monthly expenses or defer them to a time when you expect a higher income.
However, when you only pay the interest, you must be careful because this type of loan can add default risk.
An offset account is a bank account that you can link to your home loan. It’s used like any other Bank account.
If you deposit your salary or savings in this account, the balance of your loan is then offset by the amount you hold in the offset account, therefore you are only charged interest on the loan amount after the balance in the offset account is netted off. An offset account acts as an everyday account and normally comes with a debit card so you can access the money easily and conveniently.
An offset account is used to help you repay your home loan quicker, and if you can leverage this tool the Bank offer it can save you thousands over the life of your loan.
Knowing if linking an offset account to your home loan will be beneficial will depend on your circumstances and future plans. Banks often charge fees to get this feature, so you want to be sure the benefit outweighs the cost.
It’s a rate that can fluctuate over time due to multiple factors including market interest rate changes.
Variable interest rates are normally offered on Home Loans and Personal Loans.
Final Thoughts
Whether you want to find financing for yourself or your business, you can find many options on the market! However, to make the process easier, you can seek help from a financial expert like us!
At Westend Finance, we have a seasoned team that can help you find the best solutions, whether you do not have enough documentation, are looking for a specialised loan, or need quick approval. Call us today!
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