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Fixed rate vs variable rate personal loans

Find out whether you should lock your rate.

Choosing the right personal loan is key to being able to manage your loan effectively. As well as choosing a lender, deciding on your loan term and choosing between secured and unsecured, you also have to decide whether you want your rate to be fixed or variable. These two rate options offer different benefits and drawbacks. The guide below will take you through the differences between fixed and variable interest rates and help you decide which option is right for you.

The key differences between fixed and variable interest rates on personal loans

Fixed rates Variable rates
Description Your rate remains the same throughout the specified term. Your rate may fluctuate throughout the loan term.
Typical rates 8-15% p.a. 10-16% p.a.
Main benefit
  • Your repayments remain the same no matter what's happening in the market.
  • You can generally make additional repayments and repay the loan early without penalty.

What are fixed and variable interest rates on personal loans?

Personal loans come with two types of interest rates: fixed or variable. Fixed interest rates remain the same throughout the specified term, which may be for the entire loan term or for an introductory period. If you opt for a variable rate personal loan you will receive the advertised rate, but this rate may change throughout the loan term depending on interest rate movements in the market.

What are the benefits of each type of interest rate?

Fixed rate personal loans

  • Your repayments remain unchanged throughout the specified term.
  • You may be able to secure a lower rate.

Variable rate personal loans

  • You can generally make additional repayments without penalty.
  • You're usually able to repay the loan early without any fees.
  • You can find more loan options with longer repayment periods (up to seven years).

interest rate choice

What are the drawbacks of each type of interest rate?

Fixed rate personal loans

  • You generally can't make additional repayments or pay the loan off early.
  • If you are able to make additional repayments or pay the loan off early, you may be charged a fee. Additional repayments may also be capped.
  • Some fixed rate loans come with shorter repayment periods (up to five years).

Variable rate personal loans

  • Your interest rate could increase and make your loan unnaffordable.
  • You may find less competitive rates.

How do I work out which rate type is best for me?

The right type of interest rate for you will depend on a few different factors. Here are some questions you can ask yourself to help you decide:

  • Do I want the option of making additional repayments or repaying the loan early? If the answer is yes, you're much more likely to find a variable rate loan that will let you do so.
  • How affordable are my repayments? If your repayments are only just working with your budget, a fixed rate loan will ensure they will not increase.
  • What interest rate can I get? The most competitive rate is going to make your loan repayments more affordable.

Compare a range of fixed and variable rate personal loans

Rates last updated August 21st, 2018
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Monthly Service Fee Application Fee Product Description Monthly Repayment
HSBC Personal Loan
From 9.5% (fixed)
10.06%
$5,000
1 to 5 years
$5
$150
A competitive fixed interest rate loan with the option to make extra repayments. Rates range from 9.5% p.a. to 15.99% p.a. based on your credit history.
SocietyOne Unsecured Personal Loan
From 7.5% (fixed)
9.51%
$5,000
2 to 5 years
$0
3% (of loan amount)
Based on your risk profile, you will receive a tailored rate between 7.5% and 20.49% with a SocietyOne personal loan.
Latitude Personal Loan (Unsecured)
From 13.99% (fixed)
15.19%
$3,000
2 to 7 years
$13
$250 (Loans under $4000 - $140)
An unsecured loan with a tailored rate from 13.99% p.a. to 29.99% p.a. designed for multiple purposes including renovating, buying a car or travelling.
NAB Personal Loan Unsecured Fixed
Headline rate 13.49% (fixed)
14.36%
$5,000
1 to 7 years
$10
$150
Based on your risk profile you will receive a tailored rate between 11.49% p.a. and 18.99% p.a. (comparison rates between 12.37% p.a. and 19.83% p.a.)
RateSetter 3-Years Personal Loan
From 7.17% (fixed)
9.72%
$2,001
0.5 to 5 years
$0
$220
RateSetter offers loans with terms ranging from 6 months to 5 years and comparison rates from 6.39% p.a. - 11.08% p.a. based on your risk profile.

Interest and comparison rates calculated for a 3-year loan term.
Harmoney Unsecured Personal Loan
From 6.99% (fixed)
7.69%
$5,000
3 to 5 years
$0
$500 (Upfront fee)
Interest rates are tailored to each applicant individually, and start from as low as 6.99% p.a. to 26.95% p.a.. based on your credit history.
NOW FINANCE Personal Loans
From 7.95% (fixed)
9.56%
$5,000
1.5 to 7 years
$13
$395 (Based on $10,000)
Get rewarded with a low interest rate for your good credit history. Rates from 7.95% p.a. to 16.95% p.a. depending on your credit score.
CUA Unsecured Fixed Rate Personal Loan
11.99% (fixed)
11.99%
$5,000
1 to 7 years
$0
$0
Apply for a loan up to $60,000 and keep repayments manageable with a competitive fixed rate.
Pepper Money Unsecured Fixed Rate Personal Loan
From 9.99% (fixed)
9.99%
$5,000
1 to 7 years
$0
$0
Apply for up to $50,000 and receive conditional approval within minutes. Interest rates range from 9.99% p.a. to 21.74% p.a. The rate you are approved for depends on individual circumstances.
MyState Unsecured Personal Loan
12.99% (variable)
16.42%
$3,000
1 to 7 years
$10
$200
Apply for up to $50,000 and make additional repayments at any time without penalty.
Westpac Unsecured Personal Loan
12.99% (fixed)
14.14%
$4,000
1 to 7 years
$12
$250
A competitive, fixed rate personal loan that allows you to make extra repayments.

Compare up to 4 providers

Rates last updated August 21st, 2018
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Monthly Service Fee Application Fee Product Description Monthly Repayment
Citi Personal Loan Plus
From 8.99% (variable)
9.96%
$5,000
3 to 5 years
$10
$199
Borrow up to $75,000 to use for a range of purposes. You’ll receive a rate of between 8.99% p.a. and 17.99% p.a. depending on your risk profile. (Comparison Rate of 9.96% p.a. to 18.91% p.a.)
NAB Personal Loan Unsecured Variable Rate
Headline rate 12.69% (variable)
13.56%
$5,000
1 to 7 years
$10
$150
Based on your risk profile you will receive a tailored rate between 10.69% p.a. and 18.69% p.a. (comparison rates between 11.58% p.a. and 19.53% p.a.)
MyState Unsecured Personal Loan
12.99% (variable)
16.42%
$3,000
1 to 7 years
$10
$200
Apply for up to $50,000 and make additional repayments at any time without penalty.
CUA Unsecured Variable Personal Loan
11.89% (variable)
11.89%
$5,000
1 to 7 years
$0
$0
Pay no monthly fees and make unlimited extra repayments when you borrow less than $60,000
Pepper Money Unsecured Variable Personal Loan
From 9.99% (variable)
9.99%
$5,000
1 to 7 years
$0
$0
Borrow from $5,000 and enjoy a competitive variable rate. Interest rates start from 9.99% p.a. The rate you are approved for depends on individual circumstances.
RACQ Unsecured Personal Loan
12.95% (variable)
13.25%
$3,000
5 years
$0
$200
Apply for up to $60,000 to use for a variety of purposes end enjoy no penalty for early repayment. Note: You must be a QLD resident to apply.
St.George Secured Personal Loan - Variable Rate
From 12.74% (variable)
13.81%
$3,000
1 to 7 years
$12
$195
Use your car as security to benefit from a competitive variable rate.

Compare up to 4 providers

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Personal Loan Offers

Important Information*
HSBC Personal Loan

A competitive fixed interest rate loan with the option to make extra repayments. Rates range from 9.5% p.a. to 15.99% p.a. based on your credit history.

SocietyOne Unsecured Personal Loan

Based on your risk profile, you will receive a tailored rate between 7.5% and 20.49% with a SocietyOne personal loan.

Latitude Personal Loan (Unsecured)

An unsecured loan with a tailored rate from 13.99% p.a. to 29.99% p.a. designed for multiple purposes including renovating, buying a car or travelling.

Citi Personal Loan Plus

Borrow up to $75,000 to use for a range of purposes. You’ll receive a rate of between 8.99% p.a. and 17.99% p.a. depending on your risk profile. (Comparison Rate of 9.96% p.a. to 18.91% p.a.)

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