Low interest rate personal loans
Why pay more interest than you need to? Compare low rate personal loans now.
Find out what to look for and compare low rate personal loans below.
What's in this guide?
- Low interest rate personal loans comparison
- Compare low interest personal loans in Australia
- What types of personal loans have the lowest rates?
- How to compare: What else should you look at besides the interest rate?
- Fixed or variable interest rate?
- Three top tips to help you get the lowest rate loan
- What are the eligibility criteria?
- How you can apply for a low interest rate personal loan
Compare low interest personal loans in Australia
5.75% p.a. interest rate. A low rate loan that may be approved in as little as 60 seconds.
4.85% p.a. interest rate. A personal loan with a tailored rate based on your creditworthiness and a redraw facility.
7.49% p.a. interest rate. A competitive low rate personal loan from peer-to-peer lender RateSetter.
9.99% p.a. interest rate. A flexible low interest rate loan with lots of flexibility and no monthly fees.
What types of personal loans have the lowest rates?
There are a couple of types of loans you can look at if you want one with a low interest rate. These include the following:
- Secured personal loan. If you have an asset to offer as a guarantee, such as a vehicle or even a term deposit, you can get a lower rate with a secured personal loan. The security mitigates the risk for the lender, so they're able to offer you a lower cost, and you're still able to use the funds for the purpose you need.
- Risk-based personal loan. Many lenders are now offering risk-based personal loans, which means the interest rate is personalised to you. So, if you have a good borrowing history and a high credit score (you can check your credit score for free here), then you may be able to get a low interest rate.
- A competitive unsecured personal loan. Due to a significant rise in neobank and non-bank lenders, there are more competitive unsecured personal loans available on the market. If you compare your options, which you can do using the table on this page, you'll be able to find a low interest rate.
How to compare: What else should you look at besides the interest rate?
A personal loan with a low interest rate can help you keep your ongoing repayments down while giving you access to the funds you need. But an interest rate is not the only feature a personal loan comes with. In fact, some loans may appear cheaper because of a lower interest rate, but actually end up being more expensive over the life of the loan if you're not careful.
Follow the checklist b to comparing finance to get the cheapest loan possible below:
What type of loan do you need?
Personal loans can be secured or unsecured and can come in the form of a lump-sum payment (as is the case with most loans) or as a line of credit, as you find with personal overdrafts and line of credit loans. Determine what's the best personal loan for your borrowing needs.
What extra features does the loan come with?
These could be easy account management in the form of a mobile app or online account, a redraw facility to access extra repayments or even frequent flyer points.
What are the eligibility criteria?
You will generally need to be over the age of 18 and a permanent Australian resident or citizen. Most lenders also set a minimum income, which is usually a minimum of $14,000 p.a. (for smaller loans). Eligibility criteria are outlined on all finder.com.au review pages.
How flexible is the loan?
Most lenders will offer you the option of making weekly, fortnightly or monthly repayments, but not all do. It's also important to check how easy it is to make your repayments. Are they automatically deducted from your account on the due date? Can you manage your account easily online?
Check what fees apply
While a low interest rate can help you save, high ongoing fees can make your loan more expensive than it needs to be. See if you're charged an establishment fee or monthly or annual fees for your personal loan. Comparing your options by the comparison rate rather than the interest rate will also give you a better idea of the loan cost.
Determine if you can repay your loan early or make additional repayments
Repaying a loan early or making extra repayments is usually reserved for loans with variable interest rates, but some fixed rate loans also offer these features. Check if there are any limits on additional repayments (you may only be able to repay a certain amount per year) and if you will be charged a penalty for repaying early.
Evaluate the loan term and loan amounts
These will need to meet your borrowing needs. Are you able to borrow the amount you need for the time period you require to pay off the balance? Most lenders offer fixed rate loans with terms of between one and five years and variable rate loans up to seven, but some lenders only offer certain terms within that range, such as one-, three- or five-year loans.
Fixed or variable interest rate?
When trying to get the lowest rate loan possible, should you opt for a fixed or a variable interest rate?
- Doesn't go up. You'll pay the same amount each month even when rates rise.
- Budget easily. Because you know exactly what you'll be paying each month, it's easier to stick to a budget.
- Less to worry about. Fixed rate loans are great if you're not someone who wants to be constantly keeping an eye on the possibility of their interest rate changing.
- Higher interest rates. Generally, fixed rate loans have higher interest rates than variable rate loans to begin with.
- Doesn't go down. You pay the same amount each month even when rates fall.
- Shorter repayment terms. Fixed loans are usually only available on terms of up to five years.
- Less flexible. Repayment terms on fixed rate loans are less flexible.
- Lower introductory rates. Generally speaking, variable rate loans have lower interest rates to begin with than fixed rate loans.
- Flexibility. Repayment terms with variable rate loans are generally more flexible.
- May go down. As interest rates fluctuate, you could see yourself saving even more money on your loan.
- Can go up. Lenders reserve the right to raise your interest rates at any time.
- Difficulty budgeting. Because your repayments could change at any minute, it's difficult to budget easily.
Three top tips to help you get the lowest rate loan
- Check your credit score
Make sure your credit is in good standing by checking your credit score and full credit report for free with Finder.
- Collect all your necessary documents
You'll need your payslips, ID and details of your finances (assets, income, debts and expenses). This will help prove you can service the loan repayments.
- Compare and apply online
It's important to compare your personal loan options before applying. You can start with some low interest rate personal loans in the table above.
Is there a catch with low rate personal loans?
Low interest rates are a great feature for lenders to advertise, but they aren't the only feature you should be considering. Remember to look at the loan as a whole package to decide if it's for you. For example, a loan may come with a low interest rate but have a $10 monthly fee, which can really add up over a 3-year loan term. Or, the loan may come with a low interest rate but not let you make extra repayments or repay the loan early without penalty. So, along with checking the interest rate, check what else you will be charged (upfront and ongoing fees), how flexible the loan is and whether it offers all of the features you need.
What are the eligibility criteria?
Eligibility criteria will differ between loans, but generally, you will need to meet the following requirements:
- Be over the age of 18
- Have a good credit rating
- Be an Australian citizen or permanent Australian resident
You can check the eligibility criteria on each individual Finder review page. If you have any concerns, make sure you reach out to the lender directly before you apply.
How you can apply for a low interest rate personal loan
If you would like to apply for a personal loan with a low interest rate, you can compare your options using the table above. Once you've found a loan you'd like to apply for, you can click "Go to site" to apply. The information you're required to provide will be different depending on the type of loan you apply for, but you will most likely need to provide the following:
- Personal details including your name, contact information and proof of identification
- Name and contact details of your employer
- Details of your employment, including income amount and how you're employed (e.g. full-time, part-time, etc)
- Financial details including your assets, liabilities and any other active credit accounts
You can find a range of competitive options when you compare low interest rate personal loans. Make sure you consider a range of lenders to find the right loan for your needs and situation.
Personal Loan OffersImportant Information*
You'll receive a fixed rate between 6.99% p.a. and 25.69% 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.
You'll receive a fixed rate between 9.99% p.a. and 18.99% p.a. ( 10.88% 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.
You'll receive a fixed rate between 7.5% p.a. and 20.49% p.a. based on your risk profile
A loan from $10,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.
You'll receive a fixed rate between 7.95% p.a. and 16.95% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Make additional repayments or pay off the loan early, penalty-free.
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