Need a personal loan? First step, do a budget.

Have you noticed there’s a lot of talk around budgets at the moment? Yes, it is probably because of the federal budget recently being announced, but it should make us realise that budgets are an essential part of life, whether you are a Government, a business, a family or a care-free single.

Why should I do a budget?

The main reason you should do a budget is to understand exactly where all your money goes. Trust us, you will be surprised. There are many free budget planners you can download, such as the one provided on ASIC’s MoneySmart website. Consequently, there should be no cost to do a budget other than a few hours of your time. Once you have completed your budget you will be able to see where the majority of your income goes whilst potentially pinpointing opportunities to save money.

How can a budget help me get a loan?

If you complete a budget, here is how it can improve your chances of getting a loan:

  • Your budget will show you if you have any money left over each month. Extra money indicates you should be able to afford a loan.
  • Your budget can show areas (for example insurances and personal expenses) that can be reviewed and potentially reduced to free up extra cash that can then be used for loan repayments.
  • Your budget may highlight that a consolidation loan may be a worthwhile option to consider. When you consolidate, it also can free up extra cash that can be used for loan repayments.

I’ve done my budget. What do I do next?

Now you need to review the loan amount you want. For example, you may want a loan for $2000. At Fair Go Finance, repayments for a $2000 can range between $65 – 160 per week, depending on your affordability. By taking this repayment figure and comparing it to the amount of money you have left over each month, will give you a good indication if you would be able to afford a $2000 loan. So, for example, if you had $400 a month left over after all your expenses/spending money was taken out, then a $2000 loan should be affordable, as it suggests you have approx $100 a week you could put towards a loan repayment.

I think I can afford a loan, based on my budget. What next?

If you feel you can afford a loan, then the last step is to find a lender who matches your individual circumstances. Here are three things you should check to make sure a lender can consider you for a loan:

  • Credit History/Credit Score: If you have a bad credit history, make sure you understand your credit report and check it with the lender before applying. Banks in particular will generally not allow bad credit.
  • Employment: You need to check the lender’s employment rules. Most won’t accept an application if the person is still on probation, or has only been casually employed for a very short time.
  • Bank Account Conduct: Most lenders will ask to see your bank statements. This allows them to confirm any loan repayments you have declared, as well as see how well you operate your account. If you are not good with money and are constantly charged fees and direct debit dishonours, this will not look good to a lender.

I still need help!

We understand that even if you have completed a budget and know your credit history, you may still feel uncertain whether you are eligible for a loan. At Fair Go Finance you are always welcome to contact us to discuss your individual circumstances. Our very skilled customer service team are available on phone, e-mail and quick chat, so please don’t hesitate to contact us, we’re here to help you through the entire application process.

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Are you eligible to apply?

WARNING - DO YOU REALLY NEED A LOAN TODAY?*

It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.

Check your options before you borrow:
For more information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor.

Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan.
If you are on government benefits, ask if you can receive an advance from Centrelink.
www.humanservices.gov.au/advancerepayments

The Australian Government’s MoneySmart Website shows you how small amount loans work and suggests other options that may help you.

* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.