How to get a personal loan with average credit

You can still take out a personal loan with average credit although you might pay more in interest.

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Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
OurMoneyMarket Personal Loan

From 5.35% (fixed)
6.31%
$2,001
1 to 7 years
1.5–6% of your total loan amount
$0
You'll receive a fixed rate from 5.35% p.a. to 20.99% p.a. based on your risk profile
A personalised loan from $2,001 to $75,000 that varies based on your credit history and financial situation.

⭐Special Offer: If your loan is approved before June 30th, you will get a discounted rate of 5.35% p.a. (comparison rate: 6.31% p.a.) for the first 12 months regardless of your credit score.
Plenti Personal Loan

From 5.43% (fixed)
5.43%
$2,001
3 to 7 years
$0 to $999
$0
You'll receive a fixed rate between 5.43% p.a. and 17.89% p.a. based on your risk profile
A flexible loan with amounts from $2,001 and terms starting from 3 years. Interest and comparison rates calculated for a loan term of 5 years.

⭐ Finder Exclusive: Eligible applicants with excellent credit will receive rates starting from 5.43% p.a. (comparison rate 5.43% p.a.). Offer ends 30 June 2021. T&Cs apply.

Alex Personal Loan

From 5.45% (fixed)
5.45%
$2,100
6 months to 5 years
$0 (Waived $295 establishment fee)
$0
You'll receive a fixed interest rate from 5.45% p.a. to 19.99% p.a. based on your risk profile
Borrow between $2,100 and $30,000 from 6 months to 5 years. Note: The $295 establishment fee will be waived for loan applications submitted by 30 June 2021.
Symple Loans Personal Loan

From 5.75% (variable)
6.47%
$5,000
1 to 7 years
from 0% to 5% of the loan amount
$10
⭐Special Offer: Earn up to 50,000 Qantas Points with a personal loan from Symple.
Borrow up to $50,000 with interest rate from 5.75% p.a. to 25.99% p.a. and earn 1 Qantas Point for every $1 borrowed.
Harmoney Unsecured Personal Loan

From 5.35% (fixed)
6.14%
$2,000
3 to 5 years
$575 ($275 for loans of below $5,000)
$0
You'll receive a fixed rate between 5.35% p.a. and 19.09% p.a. based on your risk profile.
Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.
SocietyOne Unsecured Personal Loan

From 5.95% (fixed)
5.95%
$5,000
2 to 5 years
from $0 to $595
$0
You'll receive a fixed rate between 5.95% p.a. and 19.99% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.

⭐ Finder Exclusive: Get a $200 cashback if your loan is approved by June 30 2021. T&Cs apply.
NOW Finance No Fee Unsecured Personal Loan

From 5.95% (fixed)
5.95%
$5,000
18 months to 7 years
No Establishment Fee
$0
You'll receive a fixed rate between 5.95% p.a. and 17.95% p.a. based on your risk profile
Borrow from $5,000 to $7,999 with loan terms between 18 months and 3 years or borrow $8,000 to $50,000 with loan terms between 18 months and 7 years.
Wisr Personal Loan

From 6.49% (fixed)
6.49%
$5,000
3 to 7 years
$0
$0
You'll receive a fixed rate between 6.49% p.a. and 20.95% p.a. based on your risk profile
A loan from $5,000 that charges no fees for extra or early repayments. Keep in mind security is required in some cases.

Special Offer: Apply here and get your loan funded to waive the standard $595 application fee. Offer ends on 30 June 2021. T&Cs apply.
NAB Personal Loan Unsecured Fixed

From 6.99% (fixed)
7.91%
$5,000
1 to 7 years
$150
$10
You'll receive a fixed rate between 6.99% p.a. and 18.99% p.a. ( 7.91% p.a. to 19.83% p.a. comparison rate) based on your risk profile
Borrow from $5,000 to $55,000, with 1 to 7 year loan terms available. This loan comes with no fees for extra repayments and no early exit fees.
Plenti Variable Rate Personal Loan

From 5.43% (variable)
5.43%
$2,001
1 to 3 years
$0 to $999
$0
You'll receive a variable rate from 5.43% p.a and 17.89% p.a. based on your risk profile
A flexible loan with amounts from $2,001 and terms starting from 12 months. Benefit from transparent costs and a rate estimate before you apply.

⭐ Finder Exclusive: Eligible applicants with excellent credit will receive rates starting from 5.43% p.a. (comparison rate 5.43% p.a.). Offer ends 30 June 2021. T&Cs apply.
NAB Personal Loan Unsecured Variable Rate

From 6.99% (variable)
7.91%
$5,000
1 to 7 years
$150
$10
You'll receive a variable rate between 6.99% p.a. and 18.99% p.a. ( 7.91% p.a. to 19.83% p.a. comparison rate) based on your risk profile
Borrow from $5,000 to $55,000, with 1 to 7 year loan terms available. This loan comes with no fees for extra repayments and no early exit fees.
Pepper Money No Fee Personal Loan

From 5.95% (fixed)
5.95%
$5,000
18 months to 7 years
$0
$0
You'll receive a fixed rate between 5.95% p.a. and 17.95% p.a. based on your risk profile
Borrow from $5,000 to $50,000 and use for a range of purposes. Pay no upfront, early repayment or ongoing fees.
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Understanding personal loans for people with an average credit score

If you have an average credit score – for whatever reason – you may think that you are ineligible for a personal loan. Not too long ago, when the big banks were the only major players in the personal loan industry, it could be very difficult for people with average credit to obtain finance.

Today, however, the rise of alternative and online lenders has given new hope to people with bad credit histories. Having average credit means that you are seen as high risk for a lender. For this reason, lenders typically charge higher interest rates when offering a personal loan to someone with an average credit score. In a similar way, self-employed people and first home buyers are also sometimes considered high risk and attract a correspondingly high interest rate.

What is a credit score?

Your credit score is a number between 0 and 1,000 that equates to a rating on a five-point scale from "weak" to "excellent." In order to calculate your credit score, credit reporting agencies compile your personal and financial information. They include the level of credit you have borrowed in the past, the credit limits and debt you currently have, the volume of applications for credit you have made, and any defaults on previous credit repayments or unpaid utility bills, among other information.

You can check your credit score and full credit report, provided by Experian for free with finder.

Depending upon the credit reporting agency, your credit score could be as high as 1,000 (Experian) or 1,200 (Equifax). The average credit score for Australian adults is approximately 550, which is considered "average." In practical terms, a credit score of 550 means that there is a one in 12 chance that you will have a negative event, such as a loan default, recorded on your credit file within the next year.

A credit rating of 600 or higher will put you in the "good" or "excellent" categories, while anything lower than 500 will be considered "fair" or "weak."

What is an "average" credit score?

An "average" credit score lies in the range of 500 to 600, taking into account Australia's average of 550.

The Finder app: Find out your credit score

What personal loans can I get with an average credit score?

Unsecured personal loansAn unsecured personal loan can potentially be available to a person with an average credit score. Since you won't be required to put up an asset as security for the loan, interest rates will be higher than for a secured personal loan. Having a guarantor can help your chances of approval. Without a guarantor, the lender can take legal action against you in the event that you default on your repayments.
Peer-to-peer personal loansPeer-to-peer personal loans involve a third-party lender who facilitates the matching of private, individual investors with potential borrowers. Rather than lenders and borrowers working in a one-to-one relationship, the third-party platform invites investors to finance loans in a portfolio, classified by their level of risk. As such, peer-to-peer personal loans offer risk-based pricing, in which higher interest rates apply to people with poor credit ratings.
Car loansOne of the defining features of a car loan is that the loan is secured by the value of the car. However, when the loan applicant has an average credit score, the interest rate could potentially be higher than for an applicant with a good credit score.

What will my interest rate be?

One of the defining features of personal loans for people with average credit scores is that risk-based pricing is typically used by lenders to determine the applicable interest rate for the loan. Risk-based pricing occurs when the lender does not offer a set interest rate for a loan but instead gives an interest rate range. When an application is made by a potential borrower, the lender will assess the suitability of the borrower, taking into account the borrower's credit score. If the lender decides to make a loan offer to the borrower, they will nominate an interest rate within that range, which reflects the level of risk that is deemed to be applicable.

For example, a lender may advertise interest rates between 12.99% p.a. and 19.99% p.a. Once a loan application has been made, if the lender decides to make a loan offer, an interest rate closer to 12.99% p.a. might be offered to an applicant with a "good" or "excellent" credit rating that is deemed to be low risk. However, an offer closer to the lender's upper limit of 19.99% p.a. might be made to an applicant with average credit.

In addition to your credit score, the lender will take into account the proposed loan amount and loan term, and your financial history, employment history and personal circumstances.

How do I compare my personal loan options?

It can be more difficult to compare loan products with risk-based pricing because, until you put in an application with a particular lender, you don't know what interest rate you're going to be offered. Consider the following factors when comparing personal loans:

  • Interest rate range. While you don't know the specific interest rate you could be offered, you can still take the rate range into consideration when comparing loans.
  • Security. Is the personal loan secured or unsecured? If you have residential property to offer as security, you could be offered more favourable loan terms than with an unsecured personal loan.
  • Fees and charges. Ensure that you are familiar with application fees, ongoing fees and early repayment fees. These may or may not be linked to the interest rate you are offered.

Frequently asked questions about personal loans for average credit scores

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    Personal Loan Offers

    Important Information*
    Logo for Harmoney Unsecured Personal Loan
    Harmoney Unsecured Personal Loan

    You'll receive a fixed rate between 5.35% p.a. and based on your risk profile.
    Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.

    Logo for ANZ Fixed Rate Personal Loan
    ANZ Fixed Rate Personal Loan

    You'll receive a fixed rate of 8.99% p.a.
    Apply for up to $50,000 to use for a variety of purposes without needing to add security. Available to self-employed applicants.

    Logo for NAB Personal Loan Unsecured Fixed
    NAB Personal Loan Unsecured Fixed

    You'll receive a fixed rate between 6.99% p.a. and 18.99% p.a. ( 7.91% p.a. to 19.83% p.a. comparison rate) based on your risk profile
    An unsecured loan up to $55,000 you can use for a range of purposes and pay off over up to 7 years. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above.

    Logo for SocietyOne Unsecured Personal Loan
    SocietyOne Unsecured Personal Loan

    You'll receive a fixed rate between 6.99% p.a. and 20.49% p.a. based on your risk profile
    A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.

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