A personal loan is typically repaid through regular instalments over a specified period.
Generally repayments will be set up as an automatic direct debit from your nominated bank account. Ensure there’s enough money to cover the cost or you’ll be in default.
Protect your assets and credit rating by calling the lender immediately if you’ve got problems.
Most lenders will allow you to make extra repayments, but ask if there’s any early repayment penalties as the cost might outweigh the benefits (a fee of $150 is common).
If you don't pay off the full amount of the loan by the end of the term, or if you can't afford to make equal payments over the life of the loan, the final payment must be made as a lump sum. While this makes repayments affordable, you may be left with a large amount of money to pay off or refinance when the term ends.
To ensure a smooth repayment process, it's crucial to carefully review the loan agreement, set up reminders for payment due dates, maintain sufficient funds in your bank account, and promptly communicate with the lender if any issues arise.