5 features to compare when getting a personal loan

Published on November 27th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Personal loans are popular way among Australians to give themselves a financial boost when money seems too tight to mention. Personal loans have the drawcard of having flexible payment methods, and a wide pool of personal loans you can compare to get the best deal. People with bad credit are not left out of the equation and can apply for bad credit personal loans. However, with so many options to choose from what features should you look at to know that you are getting the best deal.

1. Fees and charges

This will be one of the biggest costs that you have to consider when comparing a personal loan. A personal loan comes with monthly and hidden fees that you need to be aware of. This is where comparing a personal loan will help you save hundreds or possibly thousands of dollars over the period of the loan.

You can use a personal loan calculator to compare how much you will be paying over the life of a loan. Fees and charges can cost you anything between $0- $378 for a secured personal loan.

2. The interest rate

This is the first thing that most people compare when looking at choosing a loan. The interest rate plays a huge factor when it comes to how much you will be repaying on a monthly basis. Depending on whether you choose a secured or unsecured personal loan you could look at paying an interest rate of 5%-22.99%. There are long-term loans that might appear to be affordable at first, but once you compare them over the life of the loan you will soon realise that you will be paying more.


If you want to take out a personal loan at Lender A for $10,000 that comes with an interest rate of 16.00% for a period of 5 years you will be paying a monthly repayment of $243. The total cost of the loan over its lifetime will cost you $14,591. However, if you go to lender A for a loan of the same amount with an interest rate of 12.00% you could be paying $222 in monthly repayments. The total cost of the loan over its lifetime will cost you $13,347. The amount you will be save by comparing will be $1,244.

3. Flexible repayment methods

To make a personal loan work for you it is important that you check that it has flexible repayment methods. You would want to check if the loan will not penalise you for making early repayments when you have the cash to do so. It is also beneficial to have a loan that can waiver its repayments for a month or two when you are unable to pay. The flexible repayment feature gives you space to breathe financially, especially when you are in a tight space.

4. Redraw facility

This feature is usually available with a personal loan that you have taken out with a bank and comes in handy when you need to cover an emergency expense that pops up. A Redraw facility is part of a personal loan feature that allows you to redraw money that you have paid towards the personal loan. To make this work, it is vital that you use this feature in a dire emergency where you find yourself cash-strapped. However, you might attract a fee of $10 for a redraw in branch.

5. Find a lender that has your interests at heart

Who you borrow your personal loan from makes a world of difference in how much you will be paying on your loan. This will determine everything that we discussed above along with how you get treated. You could read reviews on how a specific lender treats its customers and compare it to the service you receive.

Are they willing to answer all your queries without giving you the run around with complicated terms that you don’t understand? Are they able to direct you to other financial options that will suit your current financial situation best? But most importantly, are they friendly to their customers? These key points will help you better compare a personal loan, but the onus is on you to read the fine print of any loan before signing for it. This gives you peace of mind instead of nasty surprises down the road.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for personal loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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