Want access to credit without overspending on rates and fees? Here’s what to look for when it comes to cheap personal loans.
If you're in the market for a personal loan, it is always important to consider the true cost of the loan. In this guide, we explain what makes a loan competitive, the cost of different loan types and what else to consider before you apply.
- Borrow up to $70,000
- 3 and 5 years terms
- No hidden fees
100% confidential application
Harmoney Unsecured Personal Loan
An unsecured personal loan up to $70,000. You'll receive a tailored interest rate between 6.99% p.a. and based on your risk profile.
- Interest rate from: 6.99% p.a.
- Comparison rate: 7.69% p.a.
- Interest rate type: Fixed
- Application fee: $500 (Upfront fee)
- Minimum loan amount: $5,000
- Maximum loan amount: $70,000
Cheap personal loans comparison
Compare the cheap personal loan products below
What makes a personal loan “cheap”?
This is relative to the type of loan you require, as interest rates can vary significantly between different types of loans. For example, a secured car loan will generally have lower rates than an unsecured personal loan.
The actual cost of a loan is also determined by more than just the interest rate. Before applying for a personal loan, you should always consider the following:
- Upfront and ongoing fees. These fees will be added on to your principal loan amount, and will therefore affect both the size of your repayments and the interest you have to pay.
- Additional charges. These may apply depending on the terms of the loan.
- The comparison rate. This rate factors in fees and charges, along with the interest rate, to show the true cost of the loan.
What types of cheap personal loans are available?
Here is an overview of some of the loan types offered by lenders:
- Secured car loans. A loan used to purchase a vehicle, where the vehicle is used as security against the loan.
- Secured personal loans. A line of credit that is guaranteed against an asset you own or buy, such as your house or term deposit account.
- Unsecured personal loans. Allows you to borrow without using an asset as collateral.
- Peer-to-peer loans. When money is borrowed from an individual investor as opposed to a traditional lender.
How “cheap” are the different types of loans?
Below is a rate guide for the personal loan types outlined above:
- Secured car loans. Rates may go as low as 4% p.a. or as high as 14% p.a. If you are a high-risk borrower with a bad credit score, the maximum a lender can charge is 48% p.a.
- Secured personal loans. Rates can range from 5% p.a. to 28% p.a. Like secured car loans, the rate may differ based on your risk profile.
- Unsecured personal loans. Rates for unsecured personal loans can range from 8% p.a. to 17% p.a.
- Peer-to-peer loans. Interest rates on peer-to-peer (P2P) loans will vary depending on your credit score. If you have a good credit score you can get rates as low as 3% p.a., but if you have a low score your rate may be around the 12% p.a. mark.
Other features to consider besides the cost of the loan
Besides the interest rate, comparison rate and associated fees, consider the following before applying for a loan:
- Loan amount. Check whether the minimum and maximum borrowing amounts will meet your needs.
- Type of interest rate. Your loan may be either fixed or variable, and both come with different benefits and drawbacks.
- Repayment flexibility. Check whether you will be able to make additional repayments, or pay off the entire loan amount early without penalty.
- Loan terms. Some lenders offer shorter loan terms of up to five years, while others offer 7-10 years.
Are you eligible for a personal loan?
Different lenders have different criteria to determine a customer's eligibility for a loan. Generally, to be eligible for a personal loan, you will need to be over the age of 18, be an Australian citizen or permanent resident and be earning a regular income. You will also need to prove your ability to manage the loan by providing income, asset and employment information. If you want a secured personal loan, you will need to provide details of what you intend to use as security, and this secured asset will also have to meet certain eligibility criteria.
How to apply for a cheap personal loan
After you've found a cheap personal loan using one of the finder.com.au comparison tables, you can follow the secure link to the lender's online application form and begin your application. The specific information you will need to provide may differ between lenders, but will generally include the following:
- Personal details, including your name, contact details and proof of identity.
- Details of your employment, including income and type of employment.
- Your employer's name and contact details.
- Financial details, including your assets and debts.