Lender

FixedUnsecuredN/AMore details
CHECK YOUR RATE IN 2 MINUTES
  • No ongoing fees
  • No early exit charges
  • Apply online
CHECK YOUR RATE IN 2 MINUTES

Unsecured Loan (Excellent Credit)

  • No ongoing fees
  • No early exit charges
  • Apply online
FixedUnsecuredN/AMore details
APPLY ONLINE
  • No ongoing fees
  • No early exit charges
  • Apply online
APPLY ONLINE

Low Rate Personal Loan Unsecured (Excellent Credit)

  • No ongoing fees
  • No early exit charges
  • Apply online
FixedUnsecuredN/AMore details
FUNDING WITHIN 24 HOURS
  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees
FUNDING WITHIN 24 HOURS

Liberty Personal Loan (Excellent Credit History)

  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees
FixedUnsecuredN/AMore details
  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees

Liberty Personal Loan (Very Good Credit History)

  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees
FixedUnsecuredN/AMore details
  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees

Unsecured Loan (Very Good Credit)

  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees
FixedUnsecuredN/AN/AMore details
  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees

Unsecured Personal Loan (NSW, ACT & QLD only)

  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees
VariableUnsecuredN/AMore details
  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees

Personal Loan Variable (Excellent Credit)

  • 2-min rate estimate
  • Flexible repayments
  • No monthly, ongoing or early repayment fees

*Comparison rates based on a loan of $30,000 for a five-year loan term. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate, Rates correct as of August 14, 2022. View disclaimer.

Personal loan lender reviews

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What is a personal loan?

A personal loan is a financial product where you borrow money from a lender or financial institution, and make regular repayments with interest over the loan term (usually seven years).

While personal loans are a less flexible form of credit than a credit card and don’t offer the same benefits, the interest rates on personal loans are generally far lower than those on credit cards. 

Most people use personal loans to pay for things like a holiday, wedding, home renovations or for consolidating credit card debt.  

Dominic Beattie

Dominic Beattie

Editor

Personal loan interest rates may vary depending on your credit score.

Many lenders use risk-based pricing when offering personal loans.

This essentially means the perceived trustworthiness of the borrower could influence what interest rate the lender ultimately charges on the loan.

Lenders will typically look at the borrower's credit score to adjudge their trustworthiness, with the lowest interest rates usually reserved for those with excellent credit scores.

Other factors can also affect the interest rate, such as the loan amount, loan duration or whether the loan is secured, unsecured, fixed-rate or variable-rate.

How to compare personal loans

There are several avenues for you to explore when seeking a competitively-priced personal loan, but these are two of the top things to consider:

  • Secured loans: Securing an asset against the loan, say the car you’re purchasing, could fetch you a lower interest rate. Though the consequence of this is that if you default on your loan, the lender could take your asset away. Generally speaking, the lowest interest rates for secured personal loans these days hover around the 5-6%, however this is heavily reliant on the next point…

  • Risk-based loans: Many lenders have tiered lending rates, with the cream of the crop going to borrowers with the best credit scores and borrowing history.

Not all personal loans are created equally. Here are a few things to look out for when comparing personal loans.

Fees

Most personal loans charge an application and ongoing fee, and some are a bit sneaky and will even charge you a fee for getting on top of your debt and making extra repayments. Break costs and missed payment fees may also apply.

Before taking out a personal loan, make sure you understand what fees the lender will charge. Get a full list of the fees that apply: you can find out what fees will be charged by reading the product disclosure statement (PDS). Fees for secured personal loans are often lower than fees for unsecured loans because of the reduced risk to the lender.

Interest rate

You’ll find that interest rates on personal loans are either variable or fixed. 

Variable interest rates can be raised or lowered by the lender at any time over the course of the loan term. Choosing to go with a variable rate means that you may not have the repayment certainty that a fixed rate provides.

On the other hand, fixed interest rates are exactly that: fixed, which means you know the rate (and your repayment amount) will stay the same for the duration of your loan which can be great if you’re trying to budget. While locking in a fixed rate means you know your rate isn’t going to go up, it does mean you potentially miss out on an even lower interest rate if your lender decides to reduce rates. As you can see, the decision to go with a variable or fixed rate can be a bit of a gamble.

Don’t forget to look at the comparison rate when comparing personal loans as this is the true cost of the loan which includes fees. 

Extra repayments

Most variable rate personal loans allow you to make extra repayments and some fixed rate loans will also allow this, but there may be a limit on the amount that can be repaid early.  You may also be charged early repayment fees and an early exit fee for repaying the loan earlier than the initial loan term.

Look for a loan that allows you to make extra repayments without incurring an early repayment fee if possible and ask the lender what their repayment flexibility is like.

Other things to consider when seeking a low rate personal loan

There’s a few things to look out for when it comes to finding a secured loan, aside from just the interest rate and monthly repayment.

  • Flexibility: Some lenders charge fees for making extra repayments, while others do not. If you want to get ahead, it could be a good idea to find a loan that doesn’t penalise you for paying it off early.

  • Minimum and Maximum Loan Amount: Some lenders are only willing to lend between a certain band, with most lenders requiring a minimum loan size of around $2,000 - any less and you venture into payday lending territory. Conversely, most lenders have a lending cap, too, with many hovering around $50,000.

  • Eligibility Criteria: Most creditors require you be at least 18 years of age, and an Australian citizen or permanent resident. Many have minimum income requirements, too.

  • Loan Term: This usually varies anywhere from six months to five years. Some car loans now are offered over seven years. The longer your loan term, the more interest you ultimately pay, but the lower your monthly repayment - most people like to strike a blend of manageable monthly payments, and appetite for interest.

Consider your options

As with any type of loan, it’s important to do your research and compare your options. Before taking out a personal loan, look for a competitive interest rate with low fees. You should also consider a personal loan that allows fee-free early repayments so you can get on top of your debt faster without being penalised for doing so.

While you should definitely compare and shop around, be careful not to apply for too many loans as this can hurt your credit score. 

Types of personal loans

There are two main types of personal loans: secured and unsecured. 

Secured

A secured personal loan is where you use an asset (like a car) to be used by the lender as security against the debt. If you’re unable to repay the loan, the lender can sell the asset to recoup your debt.

A secured car loan is like a secured personal loan except the loan is only used to purchase a car. You can generally use a secured personal loan to purchase almost anything like a holiday, wedding, engagement ring, home renovations and so forth, as long as the value of the asset is equal to or greater than the value of the loan.

A car isn’t the only thing that can be used as security; other assets that can be used include equity in your home, term deposits, or even expensive items like jewellery or artwork however this may vary from lender to lender.

Secured personal loans generally have lower interest rates than unsecured personal loans, though the interest rate you are charged can depend on your credit rating. Borrowers with bad credit ratings may have to pay a higher rate of interest than borrowers with good credit scores. 

Compare secured personal loans

Unsecured

As the name suggests, unsecured personal loans allow you to borrow money without being required to put up an asset as security for the loan. Because of this, interest rates on unsecured loans are generally higher than they are on secured loans because the lender is taking on a greater risk by not having an asset to fall back on if you’re unable to repay the loan. But that doesn’t mean you can just get off scot-free if you can’t afford to repay the loan: the lender can still take legal action against you if that happens. 

Unsecured personal loans allow you to borrow money for any legitimate purpose, whether that be for a wedding, an engagement ring, a car, a holiday, home renovations, funeral expenses, an unexpected bill and so on. 

Because you’re not offering up an asset as security for the loan, the lender may ask what you’re using the unsecured personal loan for, which may form part of their decision to lend to you. You may also be asked to give evidence that you can afford to repay the loan by providing the lender with recent bank statements and proof of employment. Borrowers with bad credit scores will potentially be made to pay a higher rate of interest than borrowers with good credit scores. All of this is done to protect the lender.

You can generally borrow up to $50,000 for an unsecured personal loan though there are some lenders who may allow you to borrow up to $100,000.

Compare unsecured personal loans


Frequently Asked Questions

A fixed rate personal loan is a loan with the option to lock in or ‘fix’ your interest rate for a set period of time - between one and five years. Where a variable rate personal loan differs, is by allowing the interest rate to move or ‘vary’ with changes to the market - generally between one and seven years. This means your interest rate can rise or fall over the term of your loan with a variable rate.

An unsecured personal loan is a loan that has no security attached. Without security, the lender will review your finances, income and expenses to determine whether you meet lending criteria. Interest rates on unsecured personal loans are typically higher than secured loans as they present a greater risk due to having no security.

The maximum duration for a personal loan in Australia will vary depending on the terms of the loan. If the loan is subject to a fixed interest rate, the duration can reach up to five years. On the other hand, if the loan is subject to a variable interest rate, the duration can reach up to seven years. The longer the duration of the loan, the more interest will be paid over time.

Personal loans may be better suited to your current financial position than a credit card, particularly if you’re making a significant purchase. These typically include one-off or big-ticket items such as a new car, wedding, holiday or even consolidating debts. For many larger purchases, limits applied by the financial institution may prevent you from using a credit card and even if you can, the risk of an interest expense blow-out could potentially be high.

No, a personal loan is not considered a credit card. One main difference between personal loans and credit cards is how you receive the borrowed funds. A credit card is a revolving form of credit where you’re approved to borrow up to a set amount (the credit limit) for an unlimited time and you’re only charged interest on the portion of this you used and didn’t repay by the end of the statement cycle. Conversely, a personal loan is a one-off, lump sum debt of an agreed amount which has to be repaid by a set date.

There are a number of factors you should look at and compare when choosing a personal loan. A few of these include:

  • Interest rate

  • Comparison rate (interest rate plus fees and charges)

  • Type of interest rate (fixed or variable)

  • Whether the loan is secured or unsecured

  • Early repayment option

  • Loan term (how long you’ll have the loan)

  • Repayment frequency (weekly, fortnightly or monthly)

  • Lenders' eligibility criteria

Using a comparison site like Savings.com.au is an easy way to compare personal loan rates. Here you can compare personal loans by interest rate, fees, features and more. When comparing by interest rate, be sure to also consider the comparison rate, because this rate takes fees into account (e.g. a personal loan with a comparison rate that’s much higher than its advertised rate is likely to have high fees). Important features to consider when comparing include whether the personal loan is secured or unsecured, offers fee-free early exits, or offers instant approval. If you find a personal loan that you think might suit you, but you want to have a bit more information, you can go to the lender's website.

In 2022, most personal loan interest rates tend to range between 6% and 12%, but can be 20% or higher for those with below average credit scores. With this in mind, a 3% p.a. interest rate can be considered an incredibly good rate for a personal loan, but finding a lender that’s willing to offer a rate that low may be difficult. However, you should look at other factors such as the comparison rate, type of interest rate (fixed or variable) and loan term to determine how much you will end up paying in interest and other fees.

You may find it more difficult to secure a personal loan if you just started a new job, but that doesn’t mean it’s impossible. But generally speaking, you’d want to be in your job for at least six to 12 months before applying for a loan as this shows the lender that you have a consistent, reliable source of income.

Generally, unemployed people won’t be able to get a personal loan. This is because you need to meet certain income requirements that prove you are able to afford your repayments. If you are unable to do so, you won’t be able to secure a personal loan. If you’re unemployed but have another source of steady income, you might still be able to secure a personal loan.

Eligibility criteria for a personal loan will likely vary between lenders. But typically, you can expect to need to meet these bare minimum requirements:

  • Be at least 18 years old

  • Be an Australian citizen or permanent resident

  • Have a consistent form of income

You may need to meet other requirements, such as having a good credit score, but this will depend on the lender you are applying through.

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