$3,000 loans in Australia – How to get the best offer
Personal loans come in all sizes, and sometimes the size that’s just right for your needs is $3,000. Before you apply for a loan, it’s a great idea to get familiar with how the process works so you can pick the best deal for your situation. Not only that, but you’ll also know how to curry favour with the lender and get that stamp of approval.
Below, BestFind explores what you should know about getting a $3,000 personal loan.
What are the repayments on a $3,000 personal loan?
Your repayments will depend on your credit score, the duration of your loan, fees and the interest rate. If you choose a longer-term loan your repayments will be small, but the overall interest paid will be great.
Typical repayments on $3,000 over 36 months:
- Application or establishment fee: $0 to $450
- Monthly fee: $0 – $10
- Interest rate: Between 7% and 19%
- Monthly repayments: Between $79 and $92
- The total cost on a $3,000 personal loan: Between $2,861 and $3,329
Where to get a $3K personal loan
There are two main types of Aussie lenders you may choose from:
- Traditional lenders. This option includes the Big Four and more than a handful of other reputable major and smaller banks. There are also credit unions, which are non-profit financial institutions that typically offer rates and terms that are more competitive than shareholder-based institutions.
- Alternative lenders. These include online lenders and peer-to-peer lending platforms. Most alternative lenders have fast turnaround times and could be your best bet if you need $3,000 in a hurry. Additionally, in most cases, you’ll only get a competitive rate if your credit score is in decent shape.
Types of $3,000 loans on offer
Personal loans also come in all types. However, to keep things simple, here are the main types you need to be aware of:
- Secured/Unsecured. Unsecured personal loans are more common for a loan this size. They allow you to get cash without offering a car or some other asset as collateral. It’s possible, however, to secure your debt, particularly if you want to snag a lower interest rate.
- Variable/Fixed. Variable rates fluctuate, and this may affect your repayments. Fixed rates remain stable, so your repayments never change. Both options have downsides and upsides. For instance, when variable rates fall, that could translate to interest savings. But if they rise, you may end up paying more. On the other hand, fixed repayments mean you’ll always have a good handle on your budget, though you don’t get to save when rates fall.
Personal loan types also include joint applications and specialist loans tailored to specific borrowers such as self-employed people, casual workers, and retirees. Additionally, personal loans can be tailored to credit scores. That means there are options for excellent and bad credit, plus everything in between.
One other thing, some banks also offer overdrafts that are linked to your bank account. These enable you to keep withdrawing cash up to a specific limit, even if the balance reads zero.
Uses of $3,000 dollar loans
Considering that personal loan amounts can go up to $100,000, a $3,000 loan is not hefty by any means. While it’s not enough to finance high-end things such as an expensive cosmetic or IVF procedure, the money is still good for covering:
- Debt consolidation
- Medical bills
- Car repairs
- Emergencies and unexpected expenses
You can also use the cash to top up your savings, so you have enough to cover that dream wedding, swimming pool installation, or whatever floats your boat.
Short-term loans vs standard personal loans for $3K
Since $3,000 is a relatively small amount, you’ll likely come across the term “short-term loans” in your search. Short-term loans differ from traditional loans in that they have to be paid off quickly, hence the name.
Generally, they have to be paid off within a year or several months. In contrast, standard personal loans have terms of up to five or seven years.
So should you opt for a short-term loan? The benefits of doing so include a quick online application, fast cash, no need for collateral, and the availability of bad credit options.
However, some short-term lenders offer products like payday loans that are notorious for having higher than average interest rates and fees. It’s easy for people to spiral into a cycle of debt once borrowing costs start adding up and repayments become unaffordable.
Therefore, these types of loans should only be a last-ditch, short-term option. If you’re going this route, be wary of disreputable lenders that offer “no credit check loans” while imposing steep charges.
How to compare $3,000 loan options
The personal loan market is awash with many $3K offers. Comparing them is easy if you know what you’re looking for. Below, we’ve earmarked top factors to consider when choosing an option that suits you most.
- Interest rate. Some lenders offer personalised rates, while others have a one-size-for-all approach. Rates also depend on whether the loan is secured or unsecured. The bottom line is to get the most competitive rate possible for your preferred loan type.
- Comparison rate. A low interest rate is not the only feature of a cheap personal loan. If you need a quick idea of the true cost of your loan, glancing at the comparison rate can help. That’s because it combines the interest rate as well as standard fees and charges. Therefore, if there’s a huge difference between the advertised rate and the comparison rate, the loan might be too expensive.
- Fees and charges. While the comparison rate indicates the true cost of the loan, you’ll still need to break down the fees, especially since some of them may not be included in the comparison rate. Typically, lenders charge an establishment or application fee and ongoing monthly account keeping fees. Other fees such as early repayment fees and dishonour fees may apply.
- Repayment flexibility. Repayment frequency can be weekly, fortnightly, or monthly. Make sure you’ll be able to choose an option that’s tailored to your pay cycle. Generally, a loan is considered flexible if you can make additional repayments and pay off your debt early without penalty. Additionally, you should be able to withdraw your extra repayments via a redraw facility.
General requirements for getting a $3K loan
- Be over the age of 18
- Be a permanent Australian resident
- Have a regular source of income
- Provide required documentation such as ID, payslips, bank statements, and proof of address
- Provide personal and contact details as well as information about your expenses and other debts.
How to apply for a $3,000 personal loan
If you decide to apply for a $3,000 loan, following these simple steps will get you your funds, all things being equal:
- Check your credit score. Every responsible lender has to review an applicant’s credit file before handing out funds. Checking your credit score before applying gives you an idea of what to expect. It also allows you to fix any errors that might give a bad impression.
- Compare options and take your pick. Take your time and compare as many options as possible. It’s easier if you are using our table above since all these options are in one place. As mentioned earlier, you need to consider factors like rates, fees, and repayment flexibility to find what works for you.
- Calculate your monthly repayments. To find out what your monthly repayments will be for a $3,000 loan, use our calculator. The estimate you get will vary depending on your term. A lengthy term gives you affordable repayments but higher costs overall. On the other hand, a short term comes with larger repayments, but you save on borrowing costs in the long run.
- Check eligibility criteria. Although we’ve specified general requirements for qualifying, be sure to double-check with your preferred lender. Lending criteria may vary slightly between providers.
- Complete the online application form. In the same product table above, click “Go to Site” to access the lender’s website. Next, fill in the online form that awaits you and upload any required documents.
- Get your funds. If approved, you then accept the offer, after which the funds are released to you.
Frequently asked questions about borrowing $3,000
Can you get a personal loan with bad credit?
Yes, but at a higher cost. That’s because bad credit personal loans are riskier for the lender. The lender will therefore offset this risk by charging higher fees. However, the ASIC regulates what lenders charge, which is why it’s a good idea to deal with licensed lenders only. This helps you avoid disreputable lenders with predatory fees that may worsen your financial situation.
How quickly can I get the money?
This depends on the lender. Some lenders are upfront with this information, so you know beforehand when to expect the money. Turnaround time can be as fast as a few hours or as slow as a couple of weeks.
Can I still get a $3,000 loan if I’m self-employed?
Yes, keep in mind the lender is mainly concerned about your ability to make repayments. If you’re self-employed and can provide sufficient proof of income, such as tax returns and bank statements, then you are good to go.
What if I want to borrow more or less than $3,000?
Some credit providers do offer amounts below $3,000. (Related: Small personal loans). You can also apply for any amount up to $100K.