A practical guide to obtaining a personal loan

Holiday plans, your next car, a dream wedding or simply looking to get on top of your debt?

If you've checked your credit score and determined it's high enough that a lender may view your application favourably, you can consider a personal loan to cover these big-ticket costs.

The benefit of a personal loan is you're given a lump sum upfront which you repay with interest over a fixed term.

SocietyOne offers 2, 3 or 5 year terms with our unsecured loans, which mean they don't require assets for security or collateral to take out the loan. With an unsecured personal loan, you can borrow from $5,000 to $50,000.

SocietyOne also offers loan terms up to 7 years with our secured loan option. This requires you to provide an asset as security for the loan, such as a car. Providing collateral against the loan means you can borrow up to $70,000 and you can also benefit from lower rates. But if you don't repay the loan on time, the lender has the right to seize and sell your asset.

Whatever option you choose, you should only borrow the amount you can service, meaning the amount you are comfortable paying off each instalment. Find out what your repayments could be using the SocietyOne personal loan repayment calculator.

Before you apply

Just like shopping around for the best deal for new running shoes or flights, shopping around for the right loan could save you thousands in interest and fees.

But it's important to note it's not a good idea to apply for multiple loans from different lenders at the same in the hope that one approves your application. Thanks to Comprehensive Credit Reporting, lenders will see your applications on your credit report and might think you are desperate for funds or are requesting more money than you can repay. Multiple credit applications are likely to result in rejection, and this will affect your credit score. It could be months before your credit score is high enough to be able to apply for another loan.

Since applying for a personal loan can impact your credit score, it's worth identifying the provider offering the best terms according to your needs before sending any application off.

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Applying for a SocietyOne loan is simple

Once you've worked out whether you require a secured or unsecured loan, the amount you want to borrow and the period to pay it off, you're ready to apply.

Step 1: Get your rate.

Your personalised interest rate depends on your credit history, credit score, employment status and requested loan amount. People with a good credit score are rewarded with the best rate. Don't worry; checking your rate won't affect your credit score.

Step 2: Apply online.

Most people finish their application within 5 minutes. You'll need to have a few documents handy:

• Proof of identification like a driver's licence, proof of age card, passport or Medicare card. 
• Proof of income, like recent payslips, bank statements or two years of tax returns if you're self-employed.
• Statements from other loan accounts or credit cards you have open.

If you're applying for a car loan, you will also need to provide:

• VIN or chassis number, engine number and registration plate details.
• Car dealer information or the contact details of who sold you the car.
• Tax invoice and receipt for the car or purchase price if a private sale.
• Your CTP insurance and comprehensive insurance details.

Double-check the information you provide is correct to avoid rejection.

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Step 3: Your loan is approved

Once your application is approved and you've signed the documents online, SocietyOne will have the loan funds in your account in as little as 1 business day.

Personal loans are like any other debt: You should draw up a budget to ensure you have enough in your bank account to make the direct debit repayments when they're due. If you don't, you'll be charged a missed payment fee.

With SocietyOne, it's up to you if you want to repay in fortnightly or monthly instalments. Plus, you also have the freedom to pay out your loan early in full or make additional lump sum payments during the life of your loan with no extra fees or penalties.