What is a green personal loan and what can it be used for?

author-avatar By on April 12, 2021
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What is a green personal loan and what can it be used for?

According to Kermit it’s not easy being green, but we think it is if you take out a green personal loan.

No, green personal loans aren’t for frogs. Green personal loans are pretty much the same as a regular personal loan - but with an eco-friendly difference.

In the market for a personal loan? The table below features personal loans with some of the lowest interest rates on the market.

Lender
Advertised rate Comparison rate Monthly repayment Interest TypeSecured TypeEarly Withdrawal FeeOngoing FeeApplication FeeTotal RepaymentEarly RepaymentInstant ApprovalOnline Application
FixedUnsecuredN/AN/AGo to site
NO ESTABLISHMENT, ACCOUNT OR EARLY REPAYMENT FEES

No Fee Personal Loan

  • No security required
  • Can apply online
  • Fast time to funding
NO ESTABLISHMENT, ACCOUNT OR EARLY REPAYMENT FEES

No Fee Personal Loan

  • No security required
  • Can apply online
  • Fast time to funding
FixedUnsecuredN/AN/AGo to site
FAST APPROVAL TIME

Unsecured Personal Loan (Excellent Credit) (Amount > $5000)

  • No ongoing fees
  • Flexible repayment options
  • No security required
FAST APPROVAL TIME

Unsecured Personal Loan (Excellent Credit) (Amount > $5000)

  • No ongoing fees
  • Flexible repayment options
  • No security required
FixedUnsecuredN/AGo to site
CHECK YOUR RATE IN 2 MINUTES
  • No ongoing fees
  • No application fees
  • Apply online
CHECK YOUR RATE IN 2 MINUTES
FixedUnsecuredN/AMore details

Liberty Personal Loan (Very Good Credit History)

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 September 25, 2021. View disclaimer.

What is a green personal loan?

A green personal loan works just like a regular personal loan, but they are specifically designed for the purchase and installation of energy-efficient goods and other eco-related expenses to make your home more environmentally friendly.

Besides being good for the planet, green personal loans are also good for your wallet because they usually have more competitive interest rates than regular personal loans to encourage borrowers to go green.

Green personal loans are available as secured or unsecured loans, offer flexible borrowing limits and varying loan terms from one to ten years.

The table below features green personal loans with some of the lowest interest rates on the market.

Lender
Advertised rate Comparison rate Monthly repayment Interest TypeSecured TypeEarly Withdrawal FeeOngoing FeeApplication FeeTotal RepaymentEarly RepaymentInstant ApprovalOnline Application
FixedUnsecuredN/AN/AMore details

Green Loan

FixedSecuredN/AMore details

Secured Green Personal Loan

VariableUnsecuredN/AN/AMore details

Unsecured Green Loan

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 September 25, 2021. View disclaimer.

What can a green personal loan be used for?

Green personal loans can only be used to purchase energy efficient products. Some green personal loans can only be used for a specific range of items while other green personal loans may allow you to purchase any goods that are energy-efficient.

Green personal loans generally cover the purchase and installation of the following sustainable items:

  • Solar panels

  • Solar hot water systems

  • Insulation

  • Electric or hybrid vehicles

  • Rainwater tanks

  • Solar pool heaters

  • External awnings

  • Energy-efficient lighting

  • Energy-efficient air conditioning or heaters

  • Energy efficient white goods or appliances (minimum star ratings may apply)

  • Battery systems to store solar energy

  • Double glazing for windows

  • Grey water treatment systems

  • Electric vehicle charging stations

How to compare green personal loans

Check what the green personal loan can be used for

Depending on the lender, not all of the energy-efficient products we’ve listed above are eligible for a green personal loan. Some green personal loans can only be used for a specific range of items, such as Plenti’s green personal loan which is to be used primarily for solar panels and battery installations.

Renewable and energy-efficient products often have to meet strict standards of performance and efficiency. To find out if the energy-efficient item you want to purchase is eligible, contact the green loan provider or read the product disclosure statement (PDS).

Competitive interest rate

Green personal loans generally have more competitive interest rates than standard personal loans to incentivise borrowers to purchase energy-efficient products for their home. However, you should still shop around and see how the rate stacks up against other green personal loan options.

According to Savings.com.au’s research, the lowest interest rate for a green personal loan is 3.65% p.a. while the highest are around 7% p.a. up to 11.79% p.a. - so it pays to compare your options.

Comparison rate

Comparison rates factor in some of the built-in fees over the loan term, giving you a more accurate picture of how the loan compares to others in terms of costs. Don’t forget to factor in the comparison rate when comparing green personal loan options.

Minimum loan amount

Make sure the minimum loan amount is enough to cover your needs. Perhaps you want to purchase a $700 energy-efficient fridge, but the lowest minimum loan amount is $1,000 in which case you may have to consider another financing option.

Repayment flexibility

The last thing you should look out for when comparing green personal loans is repayment flexibility - are you able to pay off the loan early without incurring a penalty? Does the loan allow you to make extra repayments?

Savings.com.au’s two cents

If you’re thinking about making your home more energy-efficient but don’t have the funds right now to make that dream a reality, a green personal loan can help you achieve that goal. Going green can be expensive initially, but taking out a green personal loan can help make those costs more manageable.

Besides, investing in energy-efficient appliances and renewable energy now may help reduce your household bills in the future, so it could end up paying for itself in the long-run.


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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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