Imagine visiting the supermarket and seeing shelves full of your favourite foods, which are heavily discounted.
You experience a wave of disappointment as you’re then told the items are only discounted for certain cardholders, who earn a certain amount of spending points.
You’ve spent what little free time you have in this supermarket, so you begrudgingly pay the extra money and walk away with an average experience.
Frustrating? Of course.
Now imagine you’ve found a great loan offer, but that extra money you’re being asked to pay is $3,000. The frustration, disappointment, and hidden costs would be easily avoidable if lenders offered personalised loan offers.
Unfortunately, not many do.
Read on to find out how you can do this yourself, for free, in just five minutes.
What is a personalised rate?
A personalised rate is an interest rate presented to a customer based on their financial history and personal circumstances.
Lenders apply interest rates to loans through a risk assessment, which are used to separate borrowers into ‘tiers’ of riskiness. The higher the risk is that you cannot repay your loan, the higher the rates will be.
Each lender is different, although most risk assessments look at your credit score, job income and stability, existing debts, and living situation. Most lenders will request read-only copies of your bank statements to determine whether you can repay the loan amount.
The problem is that advertised rates are rarely available to the majority of borrowers, and the fees attached to a loan aren’t always included.
To find the real cost of any loan, you’ll need to find a comparison rate, which is the advertised rate plus all fees. This is crucial to comparing loans and finding your best offer.
Why are personalized rates important?
Comparison rates are exactly as they sound; a true representation of the loan’s full cost and your only option for comparing loan products.
Comparison rates allow you to:
- See the advertised rate
- See any initial fees (establishment fee, application fee etc.)
- See any ongoing fees (monthly service fees, account management fees etc.)
- See the total amount to repay (including total interest) over the term
- See your actual weekly, fortnightly, or monthly repayment amounts
They also allow you to accurately compare one loan offer with another, which means you are in control of which loan you choose and not pressured or surprised by a sudden change in total costs.
Comparison rates allow for better budgeting, greater transparency when borrowing money, and freedom of choice.
Unfortunately, getting a personalised comparison rate from lenders hasn’t always been easy, and most people who need a loan simply can’t wait three or four weeks to inquire and compare their options.
More so, what if a new, better offer becomes available in the meantime? Thankfully, there’s an easier and simpler way for anyone to find a personalised rate and compare their options.
How to get a personalised loan rate (the old way)
The outdated way of getting a personalised rate would involve contacting individual lenders and waiting for a response. Some lenders may reply with a range of interest rates and ask that you make an application before they can assess your eligibility.
Some lenders may offer you a personalised rate on a specific loan if you agree to a soft credit check (one which doesn’t affect your credit score) but this can still limit the number of available lenders to compare.
Another option could be to pay a finance broker; an expert who handles your loan application and is tasked with finding you the best deals available.
Compare personalised rates and offers in five minutes
Thankfully, financial technology is now being used to benefit the customer as well as the lenders.
Aimed at levelling the playing field when comparing loan offers and rates, a new service is delivering personalised loan offers and comparison rates in less than five minutes.
Money.com.au is the first of its kind in Australia; a free, online service that allows you to compare personal loan rates from multiple lenders.
The Money.com.au smart form asks a few simple questions about the reason for your loan and how much you need to borrow, then finds the best offers available to you.
You’ll see instant, real-time results which you can use to compare car loans, personal loans, debt consolidation, and any other loan offered by the Australian lenders on the platform.