Do you know personal loans can furnish a new home?

You've settled on a property between rosters, and the place is empty.

Furniture, whitegoods, maybe a decent mattress after weeks on camp beds. The cost adds up faster than most people expect, and pulling it out of your offset account or redraw can cost you more in mortgage interest over time than a short-term personal loan would.

An unsecured personal loan keeps your mortgage untouched

An unsecured personal loan doesn't require security against your property or vehicle. You borrow a set loan amount, pay a fixed or variable interest rate, and repay over a term you choose, usually between one and seven years. The loan sits separate from your mortgage, which means your offset balance stays where it is and keeps reducing your home loan interest. For a FIFO mobile plant operator who's built up savings in an offset account, leaving that balance alone can save more over the life of the mortgage than the cost of a personal loan for furniture and appliances. Consider someone who needs $15,000 for a lounge, dining setting, fridge, washing machine, and a bed. If they pull that from an offset account linked to a mortgage with $400,000 outstanding, they lose the interest offset on that $15,000 until they rebuild it. Over a few years, that can cost more than a three-year personal loan at a higher rate.

Fixed rate personal loan or variable, and why it matters for your roster

A fixed rate personal loan locks your repayment amount for the life of the loan. You know exactly what leaves your account each fortnight, which suits fly-in fly-out income that's predictable but not always hands-on to manage. A variable rate personal loan can move with the market, sometimes lower, sometimes higher. Most FIFO workers we deal with prefer fixed. You're rostered on, rostered off, and the last thing you want is a repayment that jumps while you're on-site and can't adjust your budget until you're home. Fixed also means you can set up fortnightly repayments to match your pay cycle and forget about it. Flexible terms on some products let you increase repayments or pay out early without penalty, but check the early exit fee before signing. Some lenders charge a percentage of the outstanding balance if you close the loan early, others charge nothing.

Personal loan application process when you're on a FIFO roster

Most personal loan applications now run online. You submit proof of income, confirm your employment, and the lender assesses your personal loan eligibility based on your capacity to service the loan amount and term. For FIFO workers, that means showing your full pay cycle, including allowances. Some lenders only count base salary, others include site allowances and overtime if it's consistent across your last few pay slips. The personal loan application process usually takes a few days, though some lenders offer same day approval if your documents are in order and your credit file is clean. Once approved, funds land in your account within one to three business days. You can then move the money where it needs to go, whether that's a furniture retailer, an appliance store, or direct to a supplier. We regularly see operators arrange this between rosters so the money's available when they're home and can take delivery.

What you'll pay in personal loan fees and how to compare personal loans

An establishment fee is common, usually between $150 and $500 depending on the lender and loan amount. Some lenders also charge a monthly fee, others don't. The fee structure matters more than it seems when you compare personal loans, because a loan with a slightly higher interest rate and no monthly fee can cost less over the personal loan term than one with a lower rate and a $10 monthly fee. Early exit fees vary, some lenders charge a flat amount, others a percentage of what's left. If you think you'll pay the loan out early, either from a bonus or by refinancing later, check that fee before you sign. Repayment frequency is usually flexible, you can choose weekly repayments, fortnightly repayments, or monthly repayments. Fortnightly matches most FIFO pay cycles and means you make 26 half-payments a year instead of 12 full payments, which reduces the loan faster and cuts the total interest.

Secured personal loan if you want a lower rate and have an asset to back it

A secured personal loan uses an asset as security, usually a car or savings in a term deposit. The interest rate is lower than an unsecured product because the lender has recourse if you default. If you've got a ute or vehicle you own outright, you can sometimes secure the loan against that and drop the rate by a couple of percent. The loan amount you can borrow is usually capped at a percentage of the asset's value, and the lender will want a valuation or proof of ownership. For furniture, most people stick with unsecured because it's faster and doesn't tie up an asset. But if you're borrowing a larger loan amount to furnish and fit out an investment property or a full house after relocating for work, a secured option can reduce monthly payments enough to make the extra paperwork worth it.

Frequently Asked Questions