Lifestyle Loans
Have a pending expense that you need financing? You never know when you’ll need extra funds, and this is when lifestyle loans come in handy. You can use a lifestyle loan for any purpose – anything from a holiday, boat, caravan loan, travel, home renovations, or even life events such as a wedding.
Let’s discuss what a lifestyle loan is, what are the terms of lifestyle loans in Australia, and what should be a borrower’s considerations before applying for this loan.
What is a lifestyle loan?
Lifestyle loans, a category of personal loans in Australia, offer borrowers the flexibility to finance a diverse array of expenses that can improve one’s quality of life.
Unlike secured loans, lifestyle loans are unsecured, which means they do not require collateral and are not earmarked for a particular purpose. You then have the freedom to utilize the funds for whatever expense you need. It could be a caravan loan, motorbike finance, boat loan, wedding expense, travel, and more.
Lifestyle loan values can range between $5,000 to $100,000 depending on the lender, and you could structure it as a secured loan, with, say, the leisure vehicle as the security, or as an unsecured loan without needing security.
As for repayment terms, most lifestyle loan terms can span from 1-10 years, depending on the amount and loan period you and your lender agree upon.
Where can I take out a lifestyle loan?
Lifestyle loans are quite popular in Australia, and both traditional banks and non-bank lenders offer this product. Of course, clients who are seeking more flexible terms may turn towards non-bank providers such as peer-to-peer lending platforms, online lenders, and boutique financing services.
Since borrowers look for better deals apart from traditional lenders, it’s better to work with a broker like Intellichoice as we provide unbeatable access and insight to the best personal loans and rates in the market.
You can use our lifestyle loan calculator to get an estimate, or if you have something in mind, give us a call to discuss a solution that fits your needs.
Why do Aussies take out lifestyle loans?
Recent years saw how Aussies dramatically increased their personal loan applications. The RBA reports that about eight million loan clients have existing personal loans – in the ballpark of $173 billion.
How are borrowers spending their personal loans? Stats show that most personal loans are used for planned expenses:
· 88% of personal loans are spent for car loans, boat loans, weddings, education, holidays, and renovations.
· 12% of personal loans are for unplanned expenses, including emergency car maintenance, medical bills, home emergencies, and more.
Lifestyle loans play a crucial role in many Australian households. While this means covering repayments for a couple of years, getting into debt is a necessary move for many to help manage costs that they would otherwise be struggling to cover with their existing savings.
Let our loan professionals help you navigate lifestyle loan options offered by our network of over 50 lenders. You may book an appointment with us here.
Top considerations in lifestyle loans
Ensuring you are using lifestyle loans properly helps keep your debt manageable. If you are considering taking out this loan, be mindful of these considerations:
- Check ongoing fees and charges
While borrowers usually focus on lower interest rates, it also pays to check the additional fees and charges associated with lifestyle loans. Some add-ons could make the loan more costly in the long run, so the lowest rate won’t always be the best loan.
- Choose loans with early repayment
Potential personal loan clients can make loan management easier when there is an early repayment option that has zero penalties. It makes things more flexible and could save you money over the loan term. It’s especially important for individuals who are not paid consistently per month, and could receive bigger sums at certain times.
- Loan term should suit your needs
While a longer loan term generally makes your repayments lower, personal loan lenders tend to charge higher fees because of the accessibility that lifestyle loans provide. Of course, if high repayments and a short loan term are impossible given your current budget, then a longer term may indeed be the better route.
Take a look at your monthly income, weigh the most balanced repayment amount and loan term you can manage, and talk to your loan broker about your options.
Let us help you with lifestyle loans
You can always do the legwork on your own, but you could always secure a better loan product faster with our help. Intellichoice has experienced loan professionals who can work closely with potential borrowers regardless of financial and credit standing. Whether you are looking to pay for a scheduled expense, want a caravan loan, or planning the holiday of your dreams, we have the resources and network to find the right solution. Make your lifestyle loan application seamless and book a consult today.
