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Personal Loans for Indigenous Australians
Find the best personal loan for you by comparing the options on offer from Savvy's diverse lender panel.
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What are personal loans for Indigenous Australians?
There aren’t really any specific personal loan products designed for Aboriginal Australians. Standard personal loans offered to all other Australians are available for Indigenous borrowers, which gives you a greater choice of options to work with.
There are several different types of loans that you may wish to consider when choosing your preferred personal financing deal, which include:
Unsecured personal loans
Unsecured loans are the most common type of personal loan sought after by Australians around the country. They come with no security requirements, meaning you don’t have to put up a valuable asset as collateral for the loan. This makes them faster to process (funds in your account in 24 hours) and gives borrowers a range of $2,000 to $75,000 and terms of one to seven years to work with.
Secured personal loans
Unlike unsecured loans, secured financing does require an asset as collateral for the loan. This can be anything from your car, caravan, motorbike or boat. Adding security gives you access to lower interest rates and an expanded borrowing power of $15,000 to $100,000. It’s important to note that there’s no risk of losing your asset if you can stay on top of your repayments.
You can also decide on the type of interest rate present on your personal loan, which are the following:
Fixed rate personal loans
Fixed interest involves locking in your rate at the beginning of your loan and keeping it in place across your whole term. This brings greater stability to your repayments, enabling for easier budgeting month-to-month, as well as protecting you against rises in your lender’s rate during your term.
Variable rate personal loans
Variable interest keeps your rate open to fluctuation from the start of your loan, with the potential for differing repayments each month. The primary benefit of this type of rate is that it allows you to capitalise on decreases in interest rate, which could save you money overall. These rates often start from a higher base, however.
How should I compare personal loans?
As mentioned, it’s crucial that you compare as many personal loan offers as possible in the lead up to choosing your deal, as it’s the best way to ensure you walk away with the best loan for yourself. You can do that right here with Savvy, as we break down personal loans offered by our lending partners into all the areas that are most important to consider, making it simpler for you. You should consider the following factors for your personal loan:
Interest rates
Interest is one of the most important factors to consider, as interest forms the basis for the cost of your loan. Even a rate difference of 1% p.a. could save you hundreds of dollars, if not over $1,000, on your personal loan. Where possible, you should look for the lowest rates on offer for this reason.
Fees
Similarly, fees can set you back hundreds on your loan if you’re not careful. It should be noted that we’re partnered with lenders who don’t charge some or any fees on their personal loans, so you should look for these to help you save. The main fees include:
- Establishment fee: $0 to $595
- Ongoing fees: $0 to $10 per month
- Late payment fees: $15 to $35
Loan terms
Not all lenders offer the same range of potential loan terms (one to seven years). Some cap their maximum length at five years, while others enforce minimums of up to two to three years. It’s very important that you choose a lender with your preferred term, as you shouldn’t compromise comfort or savings.
Repayment flexibility
An extension of the point on fees is that you should look for loans that afford you the freedom to repay them as quickly as you like. Not enforcing fees on early repayments gives you the ability to pay above the minimum required amount and potentially shave months off your term, saving hundreds in the process.
Eligibility
Of course, you should make sure you’re eligible to apply to your chosen lender before you commence your application by checking the following general criteria:
- You’re 18 or over
- You’re employed and earning a stable income of at least $20,000 p.a.
- You have no history of prior defaults or bankruptcy
- You can supply all the correct documents
Types of personal loan
With an unsecured personal loan, you can potentially borrow as much as $75,000 without the need to attach any valuable assets, such as your car, as security. These loans are the most widely available and often the quickest, with same-day approval possible.
Secured personal loans, on the other hand, make use of collateral. This lowers your risk profile in the eyes of a lender, potentially lowering your interest rate and expanding your borrowing power beyond what you may be able to get through an unsecured loan.
Variable interest rates remain open to fluctuation during your term. This means you can benefit from decreasing rates and save on your loan if the market heads in that direction, although you’ll also pay more if rates start rising.
Fixed interest rates are locked at the beginning of your loan and remain constant throughout your repayments. This acts as a valuable protection against interest rate increases, as your loan will be unaffected, but you’ll miss out on potential drops as well.
If you’re paying off multiple debts at the moment, particularly those with high interest (such as credit card debts), consolidating them into one payment can not only make them more convenient to manage but also potentially save you money overall.
Looking to take off on a holiday with your family but want to pay it off at your own speed? Travelling can be expensive, so you can distribute the cost of your next trip over a period you’re more comfortable with by taking out a personal loan to pay for it.
There are so many costs that go into making your dream wedding a reality, from venue hire to catering to dresses and suits and so much more. By taking out a personal loan, you can start planning the big day you want, even if you can’t pay for it upfront.
Home improvements are desirable for a range of homeowners to help keep their living space fresh and interesting, not to mention increase its value. You can get past the financial hit of renovations with a personal loan paid in instalments.
Personal loans aren’t limited to PAYG employees, though. If you’re running your own business, you can still be approved for financing by submitting tax returns and other alternative documents instead of payslips and utilise your funds however you wish.
There’s a variety of expenses which come with being a student, ranging from the cost of your courses, textbooks and computer to your accommodation. Taking out a personal loan can make these costs more manageable by spacing them out.
Some lenders offer green personal loans, which are designed to be used for energy-efficient appliances and products such as solar panel and air conditioning installation in your home. You can qualify for lower interest rates and fees with this loan.
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Common queries about personal loans from Indigenous Australians
Yes – there are several different resources and services able to be accessed by Indigenous Australians that share helpful financial advice. Some of these are:
- MoneySmart: a government resource that has published videos and podcast that speak about financial issues which relate to First Nations people.
- Be Smart, Buy Smart: a guide published by the Australian Competition and Consumer Commission (ACCC) outlining your consumer rights.
- Mob Strong Debt Help: a free legal service which provides advice about matters such as debt and credit, among other areas.
No – Indigenous Business Australia (IBA) is a service which primarily helps Aboriginal Australians start up, or continue to run, their business. They also offer home loans as part of their model to help First Nations people move into the property ownership market.
Yes – if you’re earning benefits such as an aged pension, parenting or carer payments, we work with lenders who can allow you to include these in your income as part of your personal loan. JobSeeker payments can be utilised as supplementary to a low income or family tax benefits, but not on its own, while ABSTUDY can’t be included in your overall income.
Yes – the No Interest Loan Scheme (NILS) is a program available to low income-earners across Australia to provide them with access to funds for necessary goods and services. These range up to $1,500 in total and can be repaid over 12 to 18 months without interest or fees. These are more restrictive in how they can be used, such as for essential appliances like fridges and furniture but not for cashflow or to cover bills.
You can – applying jointly with a partner can be a great way to increase your chances of approval. This is because your overall income servicing the loan is increased and, with another income stream to rely on, the likelihood of defaulting is lower.
Comparison rates are a combined figure incorporating both your interest rate and the main fees included on your loan (such as establishment and ongoing costs). It’s important to compare these more so than interest alone because it gives you a more accurate indication of the cost of your loan.
You can still be approved for financing if you’re a casual worker or self-employed as long as you meet eligibility criteria around minimum income and overall stability. You’ll be required to serve at least six months in your casual role prior to applying for your loan, while self-employed workers will need to have run their business for two years. Additionally, because you don’t receive payslips, lenders will need to see your last two years of tax returns.
Helpful personal loan guides
Still looking for the right personal loan?
Personal loans come in all shapes and sizes, so read more about the ways you can use them, as well as how they might work for you.