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Two jars with cork lids filled with coins on a wooden table with a note in the first jar saying Personal and a note in the second jar saying Loan.

A few tricks to help ensure that your loan remains a benefit rather than a burden. 

Personal loans can be a great way to help tick off the items on life’s checklist, whether it be a new car, furniture or home renovations. But if you’re not careful, you could end up paying more than you budgeted for.

If you’re in the market for a personal loan, here are four hacks that can help ensure you take full advantage of your finance.

1. Opt for a loan with a redraw facility

If your lender allows additional repayments then it may also offer a redraw facility. This is a convenient feature that works just like a home loan redraw facility, giving you access to any additional payments that you’ve made towards your loan.

Redraw facilities can encourage you to make additional payments towards your loan because you know you’ll have access to that money should you need it down the track.

2. Check the vehicle eligibility of your car loan

There is a lot of confusion surrounding the eligibility criteria for car loans. One common mistake people make is thinking that new car loans are only for brand new cars straight from the dealership. However, most lenders will allow you to finance a car up to two years old with a new car loan. 

So, if you’re buying a near-new vehicle, you can still take advantage of a competitive car loan rate. 

3. Switch to fortnightly repayments

Lenders will usually let you choose your repayment frequency – weekly, fortnightly or monthly – and most people will opt for the frequency at which they get paid. While this can assist with budgeting, opting for fortnightly repayments will see your loan paid off sooner.

If you make monthly repayments you’ll make 12 payments in a year, but if you opt for fortnightly repayments you’ll make 26 payments in the same period of time. This is an additional payment every month that will help you shave months off your loan term without you increasing your repayment amount. 

4. Apply for a longer loan term than you need.

Generally, personal loan terms extend to up to five years or even seven years with some providers. Use a personal loan calculator to work out what your repayments will be based on your loan amount, interest rate and fees. By extending your loan term, your repayments will be lower and by shortening your loan term, your repayments will be higher.

If you opt for a loan that allows you to make additional repayments and repay the entire loan amount early without penalty, try applying for a longer loan term to keep your repayments low. Then, just made additional repayments whenever you can if you want to pay off your loan sooner. 

So, if you are planning to apply for a personal loan or you already have one, keep these hacks in mind to get the most out of your loan. 


Elizabeth is the personal loans editor at finder.com.au. She has a passion for smart spending, saving and investing and enjoys reading the PDS so that you don’t have to.


Important information

Information on this website is general and has been prepared without taking into account your objectives, financial situation or needs. You should consider whether this information is suitable for your objectives, financial situation and needs before acting on the information provided.