Learn How Loans Work Before You Apply
At Frontline Financial Solutions, we believe informed clients make better financial decisions.
Our Loan Education hub is designed to help you understand the fundamentals of borrowing—so you can compare lenders, choose the right loan, and avoid costly mistakes.
Types of Loans
Secured Loan
A loan backed by collateral (e.g. a car or home). Offers lower interest rates but carries repossession risk if unpaid.
Unsecured Loan
No collateral required. Higher interest rates. Common for personal expenses, renovations, or consolidating debt.
Car Loan
Purpose-specific secured loan to buy a new or used vehicle. Often includes fixed repayments and set loan terms.
Home Loan (Mortgage)
A long-term secured loan for property purchases. Involves deposit, lender’s mortgage insurance (LMI), and variable or fixed rate options.
Personal Loan
Can be secured or unsecured. Used for various purposes—medical costs, travel, or household purchases.
Business Loan
Used to finance equipment, working capital or expansion. Often based on business cash flow and trading history.
Loan Structure
Principal
The original amount you borrow.
Interest
The cost of borrowing the principal. Expressed as an annual percentage.
Repayments
Scheduled amounts paid weekly, fortnightly or monthly. Covers both principal & interest.
Loan Term
Length of time you have to repay the loan—typically 1 to 7 years (personal/car) or up to 30 years (home).
Balloon Payment
A large final payment due at the end of some car or equipment loans, used to reduce monthly repayments.
Interest Types
Fixed Interest
Rate remains the same for the term or a fixed period. Predictable repayments.
Variable Interest
Rate changes with the market. Offers flexibility but repayments may fluctuate.
Comparison Rate
Includes the interest rate plus most fees—provides a more accurate total cost.
FAQ’s about Loan Education
What’s the difference between a comparison rate & an interest rate?
An interest rate shows the cost of borrowing; a comparison rate includes fees & charges to reflect the loan’s true cost.
Do I need a deposit for all loans?
Not always. Some car and personal loans offer 100% finance. Home loans usually require a deposit—typically 5–20% of the purchase price.
How does my credit score affect a loan?
A higher credit score may lead to better loan terms, lower interest rates & faster approvals.
Can I repay a loan early without penalties?
It depends on the lender. We help you compare loans that offer flexible early repayment options.
Empower Your Financial Decisions Today
At Frontline Financial, we do more than secure loans—we help you understand them. Explore our loan education content or speak to one of our finance specialists to discuss your goals.