Compare personal loan interest rates

3 things to know about personal loans in Australia

How do I compare personal loans?

You can get a better deal by comparing personal loans before you apply. Here's what to look at:

• Interest rate. Most personal loans have variable rates, but some offer fixed rates. Variable rates are usually lower but can change over time. Fixed rates won't change over the lifetime of your loan, but tend to be higher.
• Comparison rate. The comparison rate for personal loans in Australia is your interest rate, plus application and monthly fees. It offers a quick estimate of your loan's overall cost. This rate is based on a 'typical' loan from the lender, so if you borrow a different amount or for a different duration, the actual cost of your loan may vary slightly.
• Fees. Check for application fees, establishment fees and ongoing account fees. In general, any fee that you have to pay will be included in the comparison rate - which gives you an idea of how expensive a loan is at a glance. Fees that typically aren't included in the comparison rate are those that are optional, like early repayment fees.
• Loan amount. Start with how much you want to borrow so you can find loans that accept this amount. Amounts vary by lender, but you can generally expect to borrow between $2,001 and $100,000.
• Loan term. The term is how long you have to pay off the loan. Personal loans usually have terms of 1-7 years. You'll get lower monthly repayments with a longer term, but pay more interest overall.
• Repayments. You can choose between weekly, fortnightly or monthly repayments with different personal loans. Some loans also let you make extra repayments if you want to pay it off early.
• Other features. Look for features like a redraw facility or early repayments. A lender app can also help you track your repayment progress.

How do I know what my personal loan repayments be?

Your personal loan interest rate will often be based on your credit score and credit history. It's best to get a quote from a lender once you are comfortable you fit their eligibility criteria. That quote should include the interest rate you are offered, as well as any fees.

When you have that information, use a personal loan calculator to be able to confidently tell what you're repayments will be like.

Is a personal loan right for me?

Personal loans can be a worthwhile solution to a common problem - accessing money you don't have right now. You can use them for a wedding, holiday, emergency bills, or essentially anything you want that you can legally buy.

While most loans are for "any worthwhile purchase", there are specialised loans for businesses and for vehicles.

Whether or not a personal loan is the right option for you depends heavily on your circumstances. In general, they have more flexible eligibility requirements than credit cards and you may have an easier time borrowing larger amounts of money without having an extensive credit history. Interest rates for personal loans also tend to be lower - though credit cards could be cheaper if you use a low interest credit card or if you can pay the card off within the no-interest period.

If you are struggling financially and need a small amount of money quickly, there may be better options for you than a personal loan. Responsible borrowing is important to avoid the cycle of debt. For more resources on this, visit the Australian government's MoneySmart website*.

Personal loan advertising and marketing can make it appear that you'll get a far cheaper rate than you actually will. Before you get excited, find out the specific rate for your desired loan term and the loan features. Also be aware that if you're going to use a peer-to-peer, rates-on-risk lender, it's vital to check your credit score first. The higher it is, the lower your interest rate will be.

Nicole Pedersen-McKinnon
Freelance finance journalist

Tip: Secure your loan for cheaper rates

Securing your loan could save you thousands of dollars, but make sure you're able to make your repayments or you'll risk losing the asset you're securing the loan against. We analysed our database and found on average, interest rates for secured loans were approximately 2% p.a. lower than unsecured loans.

• Methodology

  This chart shows the average comparison rate for all secured and unsecured personal loans within Finder's database. We selected comparison rate as the metric as it is a more accurate view of the total cost of a loan.

  This data accounts only for interest rates advertised by lenders, which tend to be based on their offerings for individuals with a credit score of 'Excellent'. You may find the interest rates offered to you will be higher if you have a lower credit score.

Types of personal loans

Secured personal loans

Secured personal loans are personal loans where you agree with your lender that they can repossess one of your assets if you default on the loan. You agree to what the asset is when you apply, and its usually an item such as a car. This makes you less risky to lend to, so can help your loan get approved or even get you a lower interest rate.

Unsecured personal loans

Unsecured personal loans are the most common type of personal loan. They do not have an asset tied to them, so are much more straight forward but they tend to be more expensive than secured personal loans.

Car loans

Car loans tend use the vehicle as an asset, but some second-hand car loans are unsecured. You can get a car loan through a bank, a private lender or a car dealer.

Bad credit loans

Bad credit personal loans exist, but they are very expensive. They are also known as payday loans or short term loans. They should only be used as a last resort. If you are struggling with your finances and credit history, you can get free financial advice by calling the National Debt Helpline on 1800 007 007.

Debt consolidation loans

Debt consolidation loans roll your debts into a single loan so you only have to make one monthly repayment and can save on rates and fees. You can use it for other personal loans, credit cards and even buy now pay later balances.

Big Four Banks vs other lenders

All lenders must follow the same regulations and code of conduct, making non-bank lenders as safe to borrow from as the Big Four banks.

We've summarised your main options:

• Big Four Banks. If you already bank with ANZ, CommBank, NAB or Westpac, getting a personal loan means you'll see all your accounts in one place. While their personal loan rates can be competitive, they aren't always the lowest rates on the market.

• Other banks and financial institutions. Beyond the Big Four, you'll find personal loans with plenty of other banks and big lenders that are based in states, regions or across Australia. Some well-known examples include Latitude, Citi, ING and Bendigo Bank.

• Credit unions and non-bank lenders. Credit unions and other member-owned financial institutions don't answer to shareholders, which means they can offer lower rates and fees compared to traditional banks.
• Neobanks, fintechs and other online lenders. Brands like Humm, Harmoney, NOW Finance and Wisr are run completely online. They often focus on app features, and can be very competitive with loan terms, rates and fees.

Why compare personal loans with Finder?

We're free

Our personal loan engine is completely free to use. There are no costs at all for you to use our database to find a better deal. Better still, we regularly run exclusive deals that you won't find on any other site.

We're experts

We've researched and reviewed hundreds of loans as part of our Finder Awards. Our database and tables are always up-to-date and our in-house experts regularly appear on Sunrise, 7News and SBS News.

We're independent

We are independently owned and have a mission to help Australians make better financial decisions. That means our opinions are our own and you can compare nearly every personal loan in Australia on the site (and find a better deal).

We're here to help

Since 2014, we've helped 300,000+ people find a personal loan by explaining your options simply. You don't need to give us any details to use our tables. We're here to help you make a decision.

FAQs about personal loan comparison

• What is a personal loan?

  A personal loan is a lump-sum payment or line of credit you borrow, generally between $2,000 and $100,000, that you repay over a period of up to 7 years. The interest rate can be fixed (the same amount each month) or variable (the bank can change the interest rate during the loan period).

  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 (including credit cards) into one single debt and repayment schedule.

  Want to know more? Finder has a comprehensive guide to what personal loans are and how they work.

• How do I apply for a personal loan?

  • Compare products. Use our comparison table to find a loan that suits you. Pay attention to the interest rate, comparison rate, fees and ability to make extra repayments.
  • Go to site. Click 'Go to site' on our tables to be taken directly to the lender's website, where you can find more information or get a quote. Click 'More Info' on the table to go to our dedicated review for that loan.
  • Apply for the loan Submit your application for the loan. It will help to have the right documents on hand, such as your driver's licence and any income/employment details.
  • Review and make your decision. The lender will look at your application and, if you're approved, will send you a final quote. This is your chance to review all the details and make your decision whether to accept the loan.

• Which bank is best for a personal loan?

  There's no simple answer for which bank is best for your personal loan. Your credit score and relationship with the bank will impact the rate you are offered. Comparison tables can help you understand the full interest rate ranges banks offer. It's best to see who are currently offering the lower rates, check to see if you match their eligibility criteria, and then get a quote. It may also be worth looking at non-bank lenders, as they operate under the same regulation as banks and can have more competitive rates.

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

  The average interest rate for an unsecured personal loan is around 10.72% p.a. and for a secured personal loan it is 9.33% p.a. (as of June 2023).

  This is based on an average of all the personal loans in our database based on an individual with 'Excellent' credit. Your own credit score, and therefore the rates you are offered, may differ.

• How much can I borrow with a personal loan?

  Most unsecured loans offer amounts between $2,000 and $50,000, while secured loans offer up to $100,000. But the actual amount you can borrow depends on factors including your credit score and ability to make repayments.

• What is a good rate on a personal loan?

  A good unsecured personal loan rate is around 7-15% for people with a "very good" credit score. Personal loans use your credit score to determine the rate, with higher scores leading to lower rates. As a guide, Finder analysis shows most Australians have a "good" or "very good" credit score.

• What credit score do I need for an Australian personal loan?

  An Australian credit score of 550 is generally the minimum you need to qualify for a personal loan. This will likely be an expensive loan, as most Australian lenders use risk-based pricing.

  Lower credit scores could qualify for payday or short term loans, though these will be more expensive than even a bad credit personal loan.It usually takes a few business days to get the money from a personal loan once your application is approved, but it does vary. Some banks are able to offer existing customers same-day personal loans.

  Some payday lenders also offer 1-hour turnarounds but these loans come with risks including higher interest rates and fees.

• How can I improve the chances of my loan being approved?

  There is no way to guarantee you're approved for a loan, but there are some key steps you can take before you apply:

  • Work out how much you can borrow. Lenders have criteria to decide how much you're eligible to borrow, but you also need to understand what is realistically affordable for you.
  • Maintain a good credit score or improve ite. A lower credit score can reduce your chances of getting approved or mean you are offered a higher interest rate. 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'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.