Navigate your personal loan options with our guide on how to find, compare, apply for and manage all types of personal loans.
Whether you're purchasing a car, taking a holiday, buying furniture or even trying to cover emergency medical expenses, a personal loan might be an option to consider. By comparing personal loans online you can find a loan to suit your needs and budget, and by using online tools and calculators you can understand what you'll be paying over the life of the loan, and may even find ways to save.
Read on to learn more about the different types of loans available to you, how to compare these loans and, most importantly, how to manage your repayments.
What is a personal loan?
A personal loan is a type of credit that you can get from a bank or lending institution that helps you finance something for a personal purchase. This can include a car, a boat, a caravan, or a larger purchase such as a holiday or television. These loans can be for as little as $100 or as much as $100,000, and the loan terms vary from 16 days to seven years.
- Loan amounts from $5,000
- Offers a reusable credit facility
- Repay over 5 years
100% confidential application
Citi Personal Loan Plus
Apply for a Citi Personal Loan Plus and get competitive interest rate offer with a reusable credit facility.
- Interest rate from: 11.99% p.a.
- Comparison rate: 12.77% p.a.
- Interest rate type: Variable
- Application fee: $199
- Minimum loan amount: $5,000
- Maximum loan amount: $75,000
Your quick comparison of personal loan types
There are a number of personal loan types available from a range of brands. Depending on what you're looking to finance, any of the following might be the right option for you. Browse through the tabs below to compare your options:
An unsecured personal loan is a credit option that doesn't require you to risk a personal asset.
Tips for comparing unsecured personal loans:
- The comparison rate will give you an idea of the true cost of the loan, including fees and interest
- Find out if you can repay the loan early without penalty or make additional repayments, and check if there is a redraw facility
A secured personal loan is a type of loan which is usually used to finance the purchase of a large asset, such as a car, boat or caravan.
What to keep in mind when comparing secured personal loans:
- Are there restrictions on the asset you can secure? For example, does the vehicle have to be under a certain age or over a certain value?
- Can you only use the loan amount to finance the purchase of the vehicle or asset?
- Is there a balloon payment at the end of a loan term? This is a common feature of dealership financing.
Payday loans are small, short-term loans that are used to cover expenses that come up before payday. Loan terms are for between 16 days and one year and you can usually borrow up to $2,000, although sometimes more.
Here's what to know when comparing payday loans
- Fees on short-term loans under $2,000 is capped at 24%, but you can find brands who charge less
- Some lenders offer additional features, such as free debit cards and easy repeat borrowing
- Check the eligibility criteria before applying
Debt consolidation loans work by letting you bring debts from different credit accounts together so you can pay them off with one rate and one set of fees.
When you're comparing loans for debt consolidation:
- Consider whether the new loan will save you money. Work out your new monthly repayment and if this will be lower than what you are currently paying
- Think about your eligibility for the loan. If you have a lot of debt from several accounts you may not be able to consolidate all of it, or if you have bad credit you may need to consider your bad credit debt consolidation options
Disclaimer and warning about borrowing
- No loans offered with repayment in full due in 60 days or less
- Interest rates range between 5.3% p.a. and 9.9% p.a.
- 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 personal loan offers compared on this page are chosen from a range of personal loans finder.com.au has access to track details from and is not representative of all the products available for comparison in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing personal loans.
A quick guide to personal loan types
These loans require an asset to be attached to the loan as a guarantee, so you can use the loan to buy this asset or use an asset you already own. A common form of security is a car, but can also be equity you hold in your property, a term deposit or other high-priced asset. You will get a more competitive rate because the lender is taking on less of a risk, knowing they can sell the guaranteed asset if you default on your loan.
With an unsecured personal loan you can consolidate debt, make a large purchase, take a holiday, or finance anything else you want to. They do not require a guarantee and can be for large amounts – up to $75,000 or more with some brands. Terms of between one and seven years are available and you will usually have the choice between fixed or variable interest rates.
Short term loans
Also known as payday loans or cash advances, these loans are for any amount between $100 and $2,000 and are designed to be repaid within 16 days to one year. For loans of this size, you will be charged no more than a 20% establishment fee and a 4% monthly fee for however long you hold the loan. If you borrow more than $2,000 you will be charged an interest rate and a fee that will be higher.
Car loans are specifically designed for the purchase of new, used or older vehicles and come with competitive rates as they are secured. You can apply for a car loan from a range brands including (but not limited to) a major bank, credit union, standalone car lender or dealer in the form of dealership finance. There are several different types of car financing available including standard car loans, chattel mortgages, novated leases, among others.
Lines of credit/overdrafts
These are flexible forms of financing that give you access to credit as and when you need it. A line of credit is a revolving form of finance, where you can draw up to and including a specified limit and only pay interest on the amount you use. Personal overdrafts are attached to your transaction or savings account and give you additional funds up to a specified limit when your account goes into the negative.
How can I compare personal loans?
As you can see from the personal loan types outlined above, you have a few forms of financing available. Not only that, but you have various brands offering a number of different loans. So how do you compare them? Asking the following questions will help you narrow down your options, compare what's available and find your loan.
- What do I need the loan for? The purpose of the loan will have a bearing on the type of loan you should apply for. If you want to buy a vehicle, a secured car loan will get you the most competitive rate. However, you need to check if the vehicle you're buying is eligible for a secured car loan. If you need access to ongoing emergency funds, a line of credit or personal overdraft are options to consider. Decide what you want to get out of the loan and then make sure the loan will be able to accommodate your loan purpose.
- Do I want fixed repayments or flexibility with how I pay? Fixed and variable interest rates both come with benefits and drawbacks. A fixed interest rate means you know what your repayments will be for the duration of the loan term, but you won't be able to make additional repayments or repay your loan early without penalty. You will get that flexibility with a variable rate loan but your interest rate may fluctuate throughout your term.
- Does the loan give me what I need? Does the loan allow you to borrow the amount you need? How quickly will you get your loan funded, and will it be in the timeframe you require? How do you repay your loan – is the amount debited out of your account, or do you have to manage the repayments yourself? Can you manage the account online?
- Am I eligible for the loan? Check the minimum eligibility criteria before you apply for any loan – this is always listed on finder.com.au review pages so you can conveniently check off what's required before clicking "Go to Site". Minimum age, income, employment and credit history requirements are likely to apply. If you have questions regarding any of the criteria, it's best you get in touch with the lender before submitting your application.
What you need to know about managing your personal loan
Personal loans can give you a way to get you want now without having to save for it, but without a budget or idea of how you're going to manage your repayments, you can easily fall into late payments or even defaults. What many people underestimate is how difficult it will be to repay a loan. Here are a few helpful tips to help you manage your personal loan.
- Draw up a budget that includes your repayments. Depending on the size of your loan, you could see a couple of hundred dollars a month coming out of your account, and if you have a variable rate loan the repayments will not be the same each month. Having money to fall back on in your budget will make it easier to get by each month.
- Use a personal loan repayment calculator before you apply. This will give you an idea of what the loan is going to cost and if you will be able to afford the repayments.
- Look at the comparison rate. This will give you an idea of the true cost of the loan as it includes fees as well as the interest rate.
- Check the flexibility of the loan before you apply. Are you able to make additional repayments? Is there a redraw facility? These features may help you to save money down the line.
Frequently asked questions about comparing personal loans
How do I use the finder.com.au tables to compare personal loans?
The comparison tables you see on finder.com.au can be used to compare personal loans. Loans are listed side-by-side to make your comparison easy. You can start on this page by clicking on the relevant tab – unsecured loans, secured loans, short-term cash loans or debt consolidation loans – then click on the headings at the top of the columns to filter the tables.
The tables will sort by the feature that you choose, such as the interest rate or minimum loan amount. Click on the name of the brand to head to the review page, or if you're ready to go to the website or submit your application, click "Go to Site".
Which lender should I apply with?
There is no one lender that is right for everyone, as you need to take your own financial situation and loan needs into consideration when deciding what lender is right for you. By comparing your loan options you can find the right loan.
Should I compare the interest rate or the comparison rate?
The interest rate is the percentage of your principal you will be charged. The comparison rate is a true representative cost of your loan, including all fees and charges. If you are comparing loans you can look at the comparison rate to get an idea of the cost of the loan, but know that is not what you will be charged. You may want to use a personal loan calculator to know exactly how much your ongoing repayments will be.
What's a good personal loan interest rate?
Personal loans let you finance a range of things. For example, one may let you buy a car and use that car as security for the loan, while another may let you take a holiday or consolidate debt and require no security at all. Another loan may only be for a small amount and be open to bad credit borrowers.
All these loans carry different amounts of risk to lenders, and so lenders charge different rates to borrowers to manage that risk. Therefore, there is no one good interest rate. By comparing similar loans against each other you'll be able to see whether loans are competitive.
What's the difference between a fixed and variable interest rate?
A fixed interest rate is applied to your loan when you sign the loan contract and does not change throughout your loan term. A variable rate of interest, on the other hand, can change over the course of your loan term.
Am I eligible for a personal loan?
Generally, to be eligible for a personal loan you will need to be over the age of 18, an Australian citizen or permanent resident and have a good credit history. However, some loans on the page above do not require you to have a good credit history.
You may also be eligible for a personal loan as a temporary Australian resident.