Why pay more than you need to? Take advantage of low interest rates on personal loans.
If you're considering a personal loan to help you make your next big purchase, consolidate debt or take any other step in your life, you want to be sure you're getting a competitive product. Low interest rate personal loans help you keep your ongoing costs down and your repayments manageable. Compare a range of these loans and find a low interest rate loan for you.
Compare low rate personal loans
- RateSetter Personal Loan: 8.19% p.a. comparison rate. A competitive low rate personal loan from peer-to-peer lender, Ratesetter.
- Citi Personal Loan Plus: 9.96% p.a. comparison rate. A flexible low interest rate loan with lots of flexibility and no monthly fees.
- CUA Fixed Rate Personal Loan: 11.25% p.a. comparison rate. A low rate loan with unlimited additional repayments from CUA.
- SocietyOne Unsecured Personal Loan: 9.51% p.a. comparison rate. A personal loan with a tailored rate based on your creditworthiness.
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:
- 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 makes the loan less of a risk for the lender 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 that 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. There are a number of competitive unsecured personal loans available in 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.
Is there a catch with cheap 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.
How can you compare low interest rate personal loans?
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.
- 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 are 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.
- See how flexible the repayments are. 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?
- 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.
3 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 all your personal loan options before applying. You can start with some low interest rate personal loans in the table above.
What else should you look at besides the interest rate?
Although it may be tempting to compare rates and just pick the lowest option, there are various other loan features you need to consider before you decide which loan to go with.
- 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 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 is 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? This is in terms of repayment flexibility, flexibility with the loan purpose, and with changes to your lifestyle. For instance, can you top up your personal loan if you need to?
What's 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" apply. The information you are 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 are employed eg 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.