personal loans

Question 1

what is a personal loan?

Answer 1

A personal loan lets you borrow money to pay for something special, like a holiday, car or home renovations.

Imagine mama gives me money for something for only me to enjoy and do whatever I want.

Question 2

How does it work?

Answer 2

You make regular payments to credit provider, and have to repay it with interest over a fixed term, usually between one and seven years.

Imagine me doing house chores and mama has to pay me regularly.

Question 3

where can you access it from?

Answer 3

• banks (for example, ANZ Banking Group, Commonwealth Bank of Australia, National Australia Bank
  and Westpac Banking Corporation)
• credit unions
• building societies
• other financial institutions (for example, finance companies).

Question 4

advantages

Answer 4

• easy to manage
• works nearly the same as a normal loan
• you get money straight away

Question 5

disadvantages

Answer 5

• interest rates can be higher than alternatives
• more eligibility
• fees and penalties can be high
• potential credit damage