Compare personal loan interest rates
It’s crucial to always consider your loan’s rate amongst the highest priorities when comparing from the wide range of offers on the market today. You can start comparing loans with Savvy to help you find the best loan for your needs with an affordable interest rate thanks to our reputable lending partners.
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|Wisr Unsecured Personal Loan|
Borrow between $5,000 and $64,000 with great low rates for excellent credit. Get a personalised rate estimate in 2 minutes that won't impact your credit score.More details
|Plenti Unsecured Personal Loan (Excellent Credit)|
Apply for an unsecured personal loan and enjoy low rates for excellent credit. With no early repayment or exit fees, there’s a lot to love about this loan.More details
|OurMoneyMarket Unsecured Personal Loan|
Apply for an unsecured personal loan between $2001 to $75,000 for a variety of loan purposes. Get a personalised rate estimate in minutes without impact your credit score.More details
|Harmoney Unsecured Personal Loan|
Borrow up to $70,000 with personalised rates and repay over 3,5 or 7 years loan terms.More details
Disclaimer: A comparison rate indicates the true cost of a loan. The comparison rate displayed for this advertiser is calculated based on a loan amount of $30,000 over 5 years and represents the effective rate on the loan. Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.
The features and benefits of personal loans
By comparing your options through Savvy, you can consider loans with rates starting from just 5.35% p.a. (6.14% p.a. comparison rate).
You’ll be able to apply for the maximum amount you can afford to borrow up to $75,000, with the minimum loans available sitting at just $2,000.
As part of your loan agreement, you get to decide the time over which to repay your loan, with terms available as short as one year and as long as seven.
The total interest you pay on your loan is able to be cut down significantly if you pay above the minimum required amount in each instalment.
There won’t be any requirement for you to pay any interest, fees or a lump sum upfront; your payments begin the month (or week or fortnight) after you sign your loan agreement.
Why Australians choose Savvy to help find low interest personal loans
The factors which affect your interest rate
Your credit rating
Perhaps the greatest impact on your interest rate is your credit score. This is a number that everyone has which represents their record when it comes to servicing debt, such as repaying loans and bills on time and in full.
The better and more reliable you are at doing so, the higher your credit score will be and the lower your interest rate as a result.
Personal loan interest rates explained
Market update for personal loan interest rates: August 2022
As was the case with July, August has seen another notable increase in the national cash rate by the Reserve Bank of Australia (RBA), which could see interest rates rise from lenders around Australia across different financial products.
This hike up to 1.85% is set to cost Australian borrowers more over the life of their personal loan, particularly those already paying variable rates, while those who have already locked in their fixed rate finance agreement will dodge any potential increase.
It’s not all doom and gloom, though. By comparing your options with Savvy, you can find the most affordable loan offer for your needs and potentially save hundreds of dollars across the life of your finance deal.
It’s highly important to look for the best deal available to you not just in terms of rate, but also fees, terms, loan amounts and other conditions to ensure it suits your needs as a borrower.
The top personal loans in terms of interest rates remain the same moving into the month of August, with Harmoney’s 5.35% p.a. fixed rate Unsecured Personal Loan offer representing the lowest rate in Savvy’s database. Their 6.14% p.a. comparison rate also makes them the lowest overall in terms of total cost.
What different types of interest rate can I choose from?
When it comes to personal loans, it’s important to be able to distinguish between the two types of interest rate which can be charged on your personal loan: fixed and variable interest.
Fixed interest rates
The most common type of interest occurring on personal finance, fixed interest is when your lender locks in your rate from the outset, preventing it from changing across your loan term. Many borrowers prefer the stability which fixed rates bring, as loans with consistent repayments are much better when it comes to budgeting around them into the future. On top of this, you won’t have to worry about any unfavourable interest rate changes during your term, meaning the cost of your loan can’t increase. However, in equal measure, you won’t be able to take advantage of rate decreases, which could save a significant amount.
Variable interest rates
Variable interest, unlike its fixed counterpart, remains open to market movement across your loan term. Perhaps the greatest benefit of this is that if you take out your loan at a time when rates across the board are expected to fall, you could end up paying much less for your loan than if it had been fixed at its initial rate. It’s important to note, though, that these rates could end up costing you more if the reverse happens and your lender increases their interest rate. These rates also don’t offer the same stability as fixed interest.
How do lenders calculate interest?
Interest is charged on personal loans daily and added to each instalment, whether you choose to pay weekly, monthly or fortnightly. This means that the percentage rate on your loan is multiplied by your outstanding balance each day. Because of this, you may find you pay slightly less interest by making your repayments more often, such as weekly or fortnightly instead of monthly, as your outstanding principal has the opportunity to decrease more frequently. If you paid monthly, your interest would be calculated on your base $30,000 loan amount for the full 30 days or so, but fortnightly repayments would mean this would reduce after 14 days.
Lenders decide on the interest rates for their personal finance products, as well as all other loans, based in large part on the Reserve Bank of Australia (RBA) cash rate. This national rate can rise and fall in line with many different variables, with the most significant being the nation’s economy and inflation. If the RBA’s cash rate rises or falls, lenders can choose whether to pass these increases or decreases onto their customers.
How else should I compare personal loans?
Although interest is one of the most important ways to compare different personal loan offers, there are many other ways you can go about selecting which is the best for you. Fortunately, you can do this right here with Savvy, as we’re partnered with a range of reputable lenders from around Australia to deliver you the highest-quality comparisons across a variety of key areas. The other primary factors to consider when comparing loans are:
The other main cost to keep an eye on when comparing loans is their fees. There are several charges which can apply to personal loans, but many lenders don’t charge some or most of these on their offers. Establishment fees can cost up to around $600, but you can access loans without any charge for setting up your agreement. This is also the case for ongoing service fees, which may be charged up to $10 in some cases but are often not charged. Late payment fees will be charged in all cases, though, which may set you back up to $35 or more for each missed instalment.
Of course, it’s crucial above almost all else that your lender can offer you the amount you need to borrow to cover whatever expenses need covering. This is especially the case for those looking to take out a loan on the smaller or larger ends of the spectrum, as financiers’ minimum and maximum amounts can vary. While many lenders cap their unsecured loans at $50,000, there are those in the market right now who can offer as much as $75,000 without any asset collateral. Similarly, there are lenders who can approve applications for as little as $2,000 but others who may enforce a minimum of $5,000.
On top of this, you should always make sure you can space out your repayments over a period which suits your needs. This can vary from one to seven years generally, but different lenders will offer different deals. For instance, there are some lenders whose minimum repayment term sits between 18 months and three years, while there are many others who only allow borrowers to repay their debts over five-year terms. You should approach the comparison process with a clear idea of what time you need to cover your debts.
You should always have the ability to pay as often and as freely as you like without the threat of a hefty penalty hanging over your head. These days, most personal loan financiers (particularly private online lenders) won’t charge any additional or early repayment fees, but it’s always important to establish whether you have the freedom to do so from the outset of your loan. Making extra contributions will reduce the time it takes to pay off your debt and, crucially, the amount of interest you’ll be required to pay overall.
Finally, your loan may come with other handy features which can benefit you during your repayment term. A common one is the ability to set your repayment schedule to either weekly, fortnightly or monthly instalments (which not all lenders offer). Another may be a redraw facility, which enables borrowers to access additional payments they’ve made across their loan and withdraw for any purpose, which can serve as a more convenient alternative to seeking out another loan but can also end up costing you more in interest and fees in the long run.