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3 Ways to Save Interest on Your Loans

If you take out a loan – however big – you will pay interest. There’s just no getting around it.

The good news is, current interest rates are relatively low. There are still, however, a few ways you can make further savings on interest.

In this article, we’ll examine three ways you can cut your loan interest rates and enjoy more cash in your pocket. Let’s get started.

1. Make extra repayments on your loan

The more money you currently owe, the more interest you will pay over your loan period. Remember, you’ll even be paying interest on your interest. With that in mind, one of the best ways to save is to reduce the life of your loan. How? By making extra repayments whenever you can.

If this is a strategy you can afford, start by making extra repayments on loans with the highest interest rates. This usually includes credit cards and smaller loans. Once they are under wraps, you can move on to your larger, longer-term loans, such as your home loan.

It’s worth noting that under some loan agreements, you cannot make extra repayments without incurring a fee.

2. Consolidate high-interest debt

If you are looking to save, interest rates are a top priority. The lower they are, the more cash you can hide away for a rainy day.

If you are grappling with numerous high-interest debts, a consolidation loan may be the solution you’ve been looking for. Put simply, consolidating your debt means taking out a larger, lower-interest-rate loan and using it to pay off your higher-interest debt. You’ll be left with one monthly repayment instead of two, three, or more; a lower interest rate; and a suitable loan term, depending on your financial goals.

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3. Improve your credit score

Your credit score has a significant impact on the loan products you are and are not eligible for. And if you have a poor credit score, you may be forced to take out a bad credit loan, which typically comes with higher interest rates.

So, if you are looking to save on your loan interest rates, improving your credit score can help. Here are a few ways you can make that happen:

  • Pay your bills on time. Utility, phone, and internet providers report to credit bureaus, too, so be sure to always pay your bill before the due date.
  • Keep your credit card balances low or at zero. Avoid maxing out your credit allowance.
  • Avoid applying for too many loans at once. When a lender assesses your credit report, they make a note on it. If there are a significant number of these notes left on your credit report, your score can be impacted.

Once your credit score improves, you’ll have access to a broader range of financial products and services – including those with lower loan interest rates.

Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.

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Please consider your own circumstances before you use Cigno. Please make sure you read our Privacy Policy, Terms and Conditions and this Financial Risk Disclaimer.

Cigno is a business name of FTA Data Solutions Pty Ltd ABN 95 670 814 221.

FTA Data Solutions Pty Ltd is an Authorised Credit Representative (Credit Representative No. 552387) of Finance & Loans Direct Pty Ltd Australian Credit Licence No. 390166.

Cigno is not a credit provider or a credit assistance provider. When you complete the Information Form, you are not applying for credit or any other particular goods and services. The completion of our Information Form also does not guarantee that you will be provided with credit or any other goods and services through our network.

Depending on the information you provide to us in the Information Form, we endeavour to assist you by providing your information to our intermediary partners. Where we provide your information to our intermediary partners, we may receive a fee.

If the information you provided to our intermediary partners meets their requirements, they may connect you with a credit provider, goods and/or services provider and/or specific products to meet your their needs (depending on the information your input into the Information Form).

Any application you ultimately make through a particular credit provider or goods and/or services provider is subject to that provider’s eligibility criteria and terms and conditions. The loan, credit, product or service may not be available to every person. We do not endorse or recommend any particular provider, product or service that you be connected with or offered. All statement on this website are general in nature and do not constitute financial, credit or legal advice (or any other advice).

Contact

SMS: 0429 213 774
Email: enquiries@cignoau.com.au
Post: PO Box 1810, Southport BC, QLD 4215
ABN: 95 670 814 221

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NOTIFICATION OF MISCONDUCT BY CIGNO AUSTRALIA

Ordered by the Federal Court of Australia

The Federal Court of Australia has found that Cigno Australia Pty Ltd (Cigno Australia) and BSF Solutions Pty Ltd (BSF Solutions) have breached the law by engaging in unlicensed credit activity and charging prohibited fees.

In the period from July 2022 to 3 October 2023, over 100,000 consumers have been lent a total of $34 million, and charged fees of over $70 million, under the ‘No Upfront Charge Loan Model’ operated by BSF Solutions and Cigno Australia. At no time has either BSF Solutions or Cigno Australia held an Australian Credit Licence.

The Court also found that Mark Swanepoel (director of Cigno Australia) and Brenton James Harrison (director of BSF Solutions) were involved in these breaches of the law.

With effect from 24 May 2024, the Court has granted permanent injunctions preventing Cigno Australia and BSF Solutions from:

  • demanding, receiving or accepting fees or charges, including amounts of loan principal, from consumers in relation to credit provided under the ‘No Upfront Charge Model’; and
  • engaging in further credit activity pursuant to the ‘No Upfront Charge Loan Model’, including by entering into new agreements with consumers, for so long as they do not hold an Australian Credit Licence.

Cigno Australia was ordered by the Court to, by 5th July 2024, send written communications to consumers who between July 2022 and December 2022 entered into agreements with Cigno Australia and BSF Solutions under the ‘No Upfront Charge Loan Model’.

The Court will later determine whether (among other things) Cigno Australia and Mark Swanepoel ought to pay a pecuniary penalty in respect of this conduct, and whether Mark Swanepoel should be restrained from carrying on a business engaging in credit activity.

Cigno Australia, BSF Solutions, Mr Swanepoel and Mr Harrison intend to appeal the decision of the Court and have filed an application for leave to appeal. If the appeal is successful, some or all of the orders of the Federal Court of Australia may be set aside.

Where can you get more information?

Where to go for further support

You can access legal advice in your state at: Free legal advice – Moneysmart.gov.au.

If you are experiencing trouble with debt, or money worries in general, contact:

  • the National Debt Helpline on 1800 007 007 or online chat (9:30am to 4.30pm, Monday to Friday).

If you need someone to talk to, contact:

  • Lifeline on 13 11 14 (24 hours) or their crisis support online chat or
  • Beyond Blue on 1300 22 46 36 (24 hours) or their webchat