Compare Personal Loans in Australia for 2022

What is a personal loan?

A personal loan is a lump-sum payment or line of credit, generally between $2,000 and $100,000, that you repay over a period of up to 7 years.

Personal loans are used for a variety of things, but generally, people tend to take them out for those one-off more expensive purchases like a car, paying for a wedding, doing renovations, or paying emergency bills. Personal loans can also be used to consolidate multiple other debts, like from credit cards, into one single debt and repayment schedule.

Choosing between all the different personal loans in Australia by yourself is a big task, so we've made it simple through our personal loan tables. Compare and choose to find the best loan for you and your wallet.

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• Disclaimer and warning about borrowing

  1. No loans offered with repayment in full due in 60 days or less
  2. Interest rates range between 3.99% p.a. and 25.99% p.a.
  3. A representative example is expressed in the table above with all fees and charges payable in the Monthly Repayment column with the representative APR expressed in the comparison rate column.

  *The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.

Personal loan market update for July 2022

According to the latest figures from the Australian Bureau of Statistics, the value of personal loans rose 5.1% in May 2022. This is at near-record levels, only beaten by one month in 2016.

The increase of personal loans was driven by a 10.2% rise in lending for personal investment as well as a 3.2% rise in lending for the purchase of vehicles. And although it's still much lower than pre-pandemic, lending for travel is also on the rise, with an 11.4% increase.

In light of the latest floods in New South Wales, banks have offered relief for those with personal loans.

Australian Banking Association CEO Anna Bligh recently spoke on ABC Breakfast, explaining that banks have been working with affected families. Relief has included deferring payments, waiving fees and restructuring loans.

Anyone affected by the floods should contact their personal loan provider immediately to see what assistance they can provide.

What types of personal loans are there?

Secured personal loans

Secured loans require you to offer an asset, such as a car, as security in exchange for fewer fees and a lower interest rate. Secured loans are often used by people who are looking to buy a car, but other assets such as property, term deposits or high-value items can be used too. Secured loans can also often be secured against the item you are buying.

Unsecured personal loans

Unsecured loans don't require you to put up an asset as security. They can be used when you want to borrow money to pay for general purchases, such as a wedding or a holiday, but are unable or unwilling to offer collateral.

Car loans

A car loan is a secured loan, secured against the vehicle you are purchasing. You can get a car loan through a bank, a private lender or the car dealer you are buying your car from.

Bad credit loans

If you have bad credit but are in need of a loan, there are still options available to you. Either apply with a lender who doesn't perform a credit check or who accepts applicants with negative listings on their file. However, if you are struggling with your finances and your credit history, there are other options to consider before taking out a loan. If you're struggling financially and would like to speak to someone for free financial advice, you can call the Financial Counsellors hotline on 1800 007 007 (open from 9:30am to 4pm, Monday to Friday).

Debt consolidation loans

A debt consolidation loan rolls your debt into a single loan. This makes it easier for you to manage the repayments, and also can be a money saver if the new loan has a lower interest rate or lower fees than the rest of your debt.

Line of Credit

You'll get access to a set credit limit, but you'll only pay interest on the funds you use. This can generally be used for most types of purchases, and even debt consolidation.

Overdrafts

An overdraft is a lot like an unsecured loan, but it is usually attached to your everyday bank account. You're given a set amount of credit that you can withdraw from your account once your own funds have been exhausted.

What should I look for when comparing personal loans?

Finding the best interest rate and features is why its important to compare personal loans. You want to make sure you're getting the best deal possible so you can repay your loan with more money left in your pocket by the end of it. To find the best deal, look at our personal loan comparison tables above and keep the following things in mind:

• Loan amount. What are the minimum and maximum amounts the lender will let you apply for and is it enough?
• Loan term. What are the minimum and maximum loan terms? Usually, terms of between 1 and 7 years are available, but terms differ between providers.
• Fees. Check for upfront fees such as establishment or application fees and ongoing fees such as monthly or annual fees. These will need to be incorporated into your loan amount.
• Interest rate. Is the rate fixed or variable? Is the rate competitive?
• Affordability. Once you know your loan amount and term, you can use a loan repayment calculator to see if your regular repayments will be affordable on your budget.
• Repayments. Can you choose between weekly, fortnightly or monthly repayments? Is it possible to make extra repayments without penalty? Can you repay the loan early without penalty?
• Features. Some features, like a redraw facility, can save you money over your loan term, while others - such as a well made app - can be great quality of life considerations.

What can I use a personal loan for?

Different lenders and loans have different use cases, but there are plenty of general use loans that you can use for any worthwhile purchase. "Worthwhile purchase" can mean a wide range of things, and we have specific guides for what to look out for on the most common loan usages:

How is a personalised interest rate determined?

A personalised interest rate, also known as a risk-based interest rate, is an interest rate that is determined by your history with paying bills and debts. Lenders will consider a variety of things when coming up with your interest rate, such as:

The amount you borrow

The lower the loan amount, the lower the risk for the lender as they will lose less money if you fail to repay the loan.

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How long you need to pay the loan back

Shorter loan terms affect the affordability of the loan, as they mean higher monthly repayments. This increases the risk of the borrower missing payments, and so could affect the interest rate charged - though opting for a shorter term could still save you money over the lifetime of the loan.

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Your credit score and credit history

Credit reporting is comprehensive and many factors can affect your credit score. While this could increase the interest charged if you have a lower score, higher scores will result in a lower interest rate.

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Your financial history

Your income, employment situation, address, age and other factors are also used to determine your risk. The lender will be looking for a financial history of paying bills and debts on time, as well as stability in income.

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What is a good rate on a personal loan?

A good rate on a personal loan will depend on your credit score and financial circumstances, but there is also more to getting a good deal than just finding a low rate. These are the questions to ask yourself when comparing Australian personal loans:

Does it have a competitive interest rate?

A competitive personal loan interest rate is around 6-9% p.a. if you have a good credit score. It's important to note that this range is just a guideline and this range could be different depending on your needs and financial situation.

What are the fees and charges?

You'll need to consider both ongoing fees and the fees that are charged when your loan starts. Common fees include an application fee, exit fee or loan set-up fee, while monthly fees and annual fees are common ongoing fees. You might also be charged to use additional features of the loan so check out those too or ask the lender before you go ahead. A great idea is to keep an eye out to see if you're eligible for cost savings such as fee waivers that can help reduce the cost of the loan.

Is the loan flexible?

How often are you able to make repayments? Are you able to make additional repayments or pay off the loan early without penalty? Is there a redraw facility if you do make early repayments? Some loans are inflexible in their terms and how repayments are made, so if you need that flex, check whether it's possible with the loan you are interested in.

Is the repayment time realistic?

Personal loans are usually offered for terms of between 1 and 7 years, with other loans on offer for shorter time periods. Some lenders are more restrictive than others when it comes to how long you have to repay your loan – for instance, only offering terms of 1, 3 or 5 years. Make sure the loan terms on offer are what you need. Long term loans over 7 years might offer lower repayments, but you'll be paying more interest over that period of time.

What features does it have?

Features can also set one loan apart from another. For example, if a flexible cashflow is important to you, then having a redraw facility means you can make extra payments to your loan, lowering the interest you pay, and have the option to withdraw those extra payments should you need the money again. Features can also include having physical branches you can visit, or having an easy-to-use app for repaying and keeping track of your loan.

What will my monthly repayments be on my new personal loan?

To get an estimate of your borrowing power, you can put your loan amounts into the personal loan calculator in the comparison tables above and you'll see what your monthly repayments will approximately be.

Tip: This also can be a good time to see how the repayments will fit into your budget plus help you determine if you can afford to make extra repayments to pay off the debt faster.

Who is eligible for a personal loan?

Eligibility for personal loans depends on a few different things:

• If you have a low income. Applicants with low incomes can still be approved for low-income personal loans. It's always a good idea to check the borrowing requirements and check your repayments with a calculator.
• If you're a pensioner. Applicants who are currently receiving pension payments have the option of getting a personal loan for pensioners.
• If you receive Centrelink payments. If you're receiving Centrelink payments or other benefits, you may still be eligible for a loan for people on Centrelink payments. However, it's important to make sure you can meet the repayments before applying.
• If you have bad credit. You're still able to apply for certain personal loans if you have negative marks on your credit file. You might end up paying a higher interest rate on these loans, so it's important to compare a range of bad credit personal loan offers before applying.
• If you have existing credit card or personal loan debt. You may still be approved for a new personal loan if this is the case, but you should calculate your repayments and your debt levels before continuing.
• If you don't meet the minimum requirements. You still might be able to apply with a guarantor. This is where someone, usually a family member, agrees to guarantee your personal loan should you fail to meet your obligations.

Frequently Asked Questions about comparing personal loans

Still have questions? We've done our best to answer the most common questions people have when comparing personal loans.

• How quickly can I get the money from my personal loan?

  Different lenders can have your loan amount transferred to you within different times. Some banks are able to offer existing customers same-day personal loans, and some payday lenders can have loan amounts transferred to new customers within an hour of approval. If you are in need of cash as soon as possible, it is advisable to check to see how long it will take to receive your loan amount before you apply.

• How much can I borrow with a personal loan?

  This will depend on the type of personal loan you apply for. Most unsecured loans come with an upper limit of $50,000, while secured loans offer up to $100,000. How much of this you can borrow will depend on a variety of factors, including your ability to service the loan and your credit score.

  There is no way to guarantee you're approved for a loan, but giving yourself the best chance at being approved starts with meeting the eligibility criteria set by the lender. Here are some top tips.

  • Work out your borrowing capacity. Be realistic. What repayments can you afford? Lenders will use a variety of criteria to decide how much you're eligible to borrow, but you really need to be realistic about what you can afford to repay.
  • Maintain a good credit score or start to build one. Make sure you keep track of all your payments because any arrears, debts or missed payments can bring your credit score down. The lower your score, the less likely you will be approved for a loan. If you already have a poor credit score, you can start improving it by limiting credit applications, paying bills on time and bringing down any limits on your credit card. It can take a while, but these are all good tactics to improve that credit score.
  • Keep track of your saving goals. If you manage to contribute to your savings regularly, it shows lenders that you are likely to manage ongoing loan repayments.

  Read our guide on common loan rejection reasons and how to get around them

• What is the average interest rate on a personal loan?

  The average interest rate depends largely on what type of loan you're applying for. If you get an unsecured loan, the average interest rate is around 12-14% p.a. while a secured personal loan is around 8-12% p.a. If you opt for a peer-to-peer or risk-based lender, the interest rate you receive will depend on your perceived risk.

• What's the difference between a credit union personal loan and a bank personal loan?

  Credit unions are different to banks in that they operate in a not-for-profit business model. Typically, you will find there are not as many fees or charges with a credit union loan, which means the interest rate could be lower. Credit unions are governed by the same regulations as banks, so it's just as safe to apply for a credit union personal loan.