Good credit personal loans – Get better than average finance
Having a good credit score means you can still make the cut when it comes to personal loans with competitive interest rates and flexible terms. If you need extra cash to cover a wedding, holiday, dentist bill, or another worthwhile purpose, good credit opens the door to more loan offerings than average.
But before you take your pick, review what BestFind has to say about finding a good credit personal loan that’s best for your needs.
What’s a good credit personal loan?
When you approach a lender for funds, your credit score is a rating that signals your standing in the hierarchy of Australian borrowers. A good credit score is between 625 and 739, though this may fall into the “very good” category somewhere between 700 and 799.
It tells the lender you’re a low-risk, responsible borrower who can be trusted to make repayments on time. That’s because you usually can’t pull such high numbers unless you have a clean and strong credit history.
The ranges mentioned above are based on Equifax and Experian’s scores, two of Australia’s main credit reporting agencies. Another credit reporting agency, Illion, also has a different set of good credit scores, which further broadens the range. Generally, credit scores vary depending on the credit scoring model and algorithms used. In any case, good credit loans usually tie-in the following benefits:
- Easy credit approval. Keep in mind that approval always remains at the discretion of the lender. However, having good credit does make it easier to get a yes.
- Affordable interest rates. Financial institutions don’t dole out credit on blind trust. But they usually can’t argue with a good credit score since it’s hard proof of your creditworthiness. You can use it to leverage a lower rate and more savings in exchange for reducing the lender’s risk.
- Faster achievement of your financial goals. Applying for and receiving finance the easy way ensures you get the extra funding you need to set your goals in motion much more quickly.
How do personal loans for good credit work?
Good credit loans generally have the following features:
- Interest rates. Market rates are always fluctuating, but with good credit, you have a better chance of receiving an offer lower than the headline rate. This could save you hundreds or thousands of dollars, depending on how much you borrow. However, the rate you end up with also depends on whether the lender offers risk-based pricing and your income details and financial situation.
- Fees. Loan fees and charges that may apply include application fees, establishment fees, monthly services fees, and late payment penalties.
- Loan amounts. Minimum and maximum borrowing limits are fluid across many lenders. Therefore, what you get depends on how well you meet each lending criteria, but typically, there’s a broad range between $2,000 and $100,000.
- Loan terms. Again, this varies between lenders, but you can expect to make repayments over any period between a year and 7 years.
What are the available types of good credit personal loans?
Here are some types of personal loans you can access when you have good credit:
- Unsecured personal loans. Unlike secured personal loans, where your application’s strength depends on the type of collateral you have, unsecured loans do not need an underlying asset. The lender awards you credit based mainly on your ability to pay back. However, expect to pay higher interest rates than those for secured loans. Also keep in mind that while there’s no risk of losing your asset, the lender can always take legal action against you if you default.
- Peer-to-peer loans. P2P lenders generally have a reputation for offering attractive deals to Australian borrowers with good credit. P2P loans don’t originate from traditional banks or credit unions. Instead, you get funding from a bunch of investors that you match up with online via a secure platform.
- Car loans. A car is a big purchase and having good credit is a boon if you’re looking for car finance. Most car loans are secured, which further boosts your potential interest savings. You’ll likely end up with fewer out-of-pocket expenses and flexible terms that allow you to repay your debt comfortably.
How to compare good credit personal loans to find the right deal
It’s generally true that your good credit does most of the work to secure a better deal. But it’s up to you to settle on the financial product or lender that suits your budget and objectives. Asking the following questions helps push you towards a conclusive and beneficial decision:
- What’s the comparison rate? – The promise of a low rate shouldn’t blind you to high-cost fees and charges that can overturn your budget. The comparison rate is a handy percentage that better represents the total cost of the loan after the interest rate, and fees are rolled together. Give it the attention it deserves but don’t skip reading the fine print in case other fees are not included.
- Does the loan have flexible features? – When taking out debt, it’s best to approach the process with an eye towards how quickly you can free yourself. This ensures borrowing doesn’t become a huge financial trap. Therefore, it’s practical to opt for offers that allow extra repayments and early exits while charging little or nothing for these features.
- What’s the size of my repayments? – If you’re planning on maintaining or improving your credit rating, affordable repayments ensure you won’t struggle to meet due dates. Give our personal loan repayment calculator a few tries to find an estimate that helps keep you in good favour with lenders.
- What sets the loan apart from others? – You may already be satisfied with getting some of the best rates on the market. But you could add icing on the cake by choosing a loan with better, additional features. For instance, you could have access to redraw facilities that enable you to withdraw from your pool of extra repayments during tough times. Some lenders also offer online accounts where you can track and manage your loan’s progress.
Will a good credit personal loan improve your credit score?
In the hands of a responsible borrower, a personal loan can be leveraged to boost your credit score further. If you already have good credit, you can cement your proven track record in the following ways:
- Clean payment history. By shopping for the lowest rate available and choosing an affordable repayment, it’s easier to keep making payments on time.
- More credit mix. If you already hold other types of credit, such as credit cards and home loans, taking out a personal loan gives you more variety. This is a factor that’s often used by CRBs when calculating credit scores.
Credit score building tips
If you’re an ambitious borrower, there’s no harm in aiming for an excellent credit score. After all, it only translates into more savings and better deals. These tried and tested tips have helped many Aussie borrowers boost their credit score:
- Check for credit file errors. You can access your credit report from any of the three CRBs: Equifax, Experian, and Illion. Check to see if the information reflects what’s on the ground and contact the relevant CRB to patch up any errors.
- Don’t miss due dates. Making payments on time is one of the biggest factors contributing to your credit score. If this isn’t one of your strengths, you can always sign up for direct debit or auto payments.
- Reduce your credit utilisation ratio. Try to strike a balance between your credit mix and the amount of debt swallowing your budget. Paying down debt reduces your debt-to-income ratio, which is another significant step towards becoming the ideal borrower.
What to avoid when trying to improve your credit score
Knowing what to do is one side of the equation when it comes to building your credit score. You should also know what not to do:
- Skipping payments. It’s the single most damaging thing you can inflict on your credit rating, and the effects can remain visible for years.
- Too many credit applications. This usually applies if numerous credit enquiries show up in a short space of time. Lenders looking at your credit file will likely mark you as a desperate and risky borrower.
- Incurring negative judgements. Any court actions and defaults can keep your credit score in the lower ranks by as long as 7 years.
The bottom line
A good credit score isn’t the only ticket you need to qualify for a personal loan. However, in most cases, it might get you fast approval and better rates. If you’re interested in applying for a good credit personal loan through BestFind, follow these four simple steps:
- Compare your loan options – Comparing personal loans is the quickest path to find finance that suits your budget and needs.
- Use our repayment calculator – Enter your term and amount to estimate your monthly instalment.
- Check for requirements – Minimum requirements state that you must be 18 years or older and an Australian citizen.
- Click “Go to Site” – Fill in the required details and submit relevant documents on the lender’s application page.
Popular personal loans searches
View all search queries