Low Interest Personal Loans
A low-interest personal loan offers flexible, affordable finance for a range of needs. Compare offers here with Savvy.
Last updated on May 2nd, 2022 at 05:24 pm by Thomas Perrotta
Compare low interest personal loans
Finding a low interest personal loan is a great way to save money across your term, with even a small rate drop potentially saving you hundreds of dollars overall. Savvy is partnered with a range of trusted lenders across Australia to help you compare the lowest rates available to you.
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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 |
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Borrow up to $70,000 with personalised rates and repay over 3,5 or 7 years loan terms.More details | |||||||||||||||||||
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Borrow up to $50,000 with no fees, now and forever. Minimum requirement to earn $22,100 p.a. and have good to excellent credit.More details | |||||||||||||||||||
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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 | |||||||||||||||||||
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 low interest personal loans
Highly competitive rates
Our suite of lenders gives you more options to choose from in the comparison process, with more competition leading to more competitive rates.
Borrowing up to $75,000
You can take out a loan for a variety of different purposes, from as little as $2,000 all the way up to $75,000 with a low interest rate.
Repayment periods up to seven years
As part of your personal loan, you also have a say over the size of your low-interest repayments by selecting a term of between one and seven years.
Fix your rate or keep it variable
You’ll be able to choose between fixing your already low rate and leaving it variable to potentially experience even lower rates in time.
Free additional repayments
With free extra contributions to your loan, you can take advantage of your low rate and save yourself hundreds, if not $1,000 or more, in interest.
Customisable instalment structure
Tailor your repayments to your needs by selecting between weekly, fortnightly or monthly instalments for your low-rate personal loan.
Personalised rates
Interest rates are different for every applicant, so your lender will set you a rate that reflects you as a borrower and your financial situation.
Low interest, quick loans
You’ll receive an instant response within 60 seconds after submitting your initial application, with funds sent to you in as little as one day.
Why Savvy can help you find the lowest personal loan interest rates
Compare loans and save
With all of your personal finance options in one place, we make it easy to compare between them and find the lowest rate.
More lenders, more choices
We partner with the most reputable lenders across the country to give you the best chance of locking a quick loan with low interest.
100% online
You can compare and apply for your loan via your smartphone, making it easy to access the information you need wherever you are.
How to save on interest on your personal loan
Compare your options
First and foremost, it’s important that you give yourself the best chance of finding the loan with the cheapest interest rate by surveying the personal finance market as thoroughly as possible. We partner with a range of lenders who offer low-rate products to borrowers, but it’s not always as simple as choosing the first good one you see.
Taking the time to contrast the best offers and see how they stack up against one another in terms of the total interest cost is the best way to compare your options when looking for low interest loans.
Maintain a strong credit rating
Borrowers who exhibit a positive credit history are seen as being safer when it comes to entrusting them with larger sums of money, as they have a proven track record of servicing debt. Interest rates are tied to risk; that is, the greater the risk your lender perceives of losing money on their loan, the higher the interest rate they’ll charge. A good credit score is often down to a history of prompt, early or additional repayments on loan debts or other bills.
To maintain or improve your credit rating, there are a number of steps you can take:
- Pay off existing debt or continue to do so on or ahead of schedule
- Lower your available credit limits on your cards
- Get rid of any cards you don’t need or use
Consider your interest rate choice
There are benefits to both variable and fixed rates that can help borrowers save on their personal loan.
Fixed interest is typically offered at a lower initial rate, which locks borrowers in at an affordable level and guarantees that it’ll stay there throughout the duration of their loan repayments. This affords greater certainty when it comes to how much you’ll repay month-to-month.
However, while variable rates are usually higher at the beginning of your loan, they have the potential to fluctuate over time and save you money in the event of a rate drop. Whether you save on a variable rate personal loan is essentially up to chance, as it depends on how the market moves over the course of your repayments.
Make additional repayments
One of the simplest ways to cut down on the interest you’ll pay over the course of your personal loan is to pay above the minimum monthly instalments required. Doing so will help you pay off your loan in full prior to the scheduled end date of your loan, which cuts down on the total time spent paying interest and fees.
For instance, paying an extra $150 each month on top of your regular repayments for a $50,000, seven-year loan at 7.5% p.a. could save you over $3,000 in interest and shave almost 18 months off your term. We can connect you with lenders who facilitate this by not charging you any fees associated with paying your loan off early.
Select a shorter loan term
Following on from the previous point, you can cut down on your total interest cost by simply opting for a shorter loan term. This would, of course, mean that you’d be increasing your monthly repayments, but any short-term pain is offset by long-term gain with a briefer loan length.
For example, borrowing $50,000 at 7.5% over five years would save you over $4,000 compared to the same loan over seven years. It’s important to not sacrifice your loan’s affordability for you in order to do this, though: it is of paramount importance that you can comfortably manage your repayments each month above all else, otherwise you simply won’t be approved.
Frequently asked questions about low rate personal loans
More about low interest personal loans explained
What types of personal loans have the lowest interest rates?
In most cases, secured personal loans come with the lowest interest rates. However, there are three main personal finance types to consider when comparing your options, so it’s important to understand the differences between them and how they can affect your interest rate. Fortunately, you can compare offers right here with Savvy and see first-hand which finance types best suit your needs and personal situation. The loans to consider are:
Secured personal loans
Secured personal loans involve putting up an asset as collateral for your finance agreement, which is commonly a vehicle such as a car or another valuable asset. As mentioned, these loans are typically the cheapest in terms of interest rate, so opting for secured finance will often result in the least expensive overall deal.
Attaching your car, another vehicle or your savings as collateral could also substantially increase your borrowing power up to as much as $100,000, with unsecured loans capping out at $75,000. However, because of the need to ensure your asset is suitable to cover the cost of your loan in the event you become unable to pay it off, lenders will often run stringent checks which may eliminate your asset and elongate the approval process.
Unsecured personal loans
Unsecured personal loans are the most common type of personal finance available on the market, with a wider range of lenders (big and small) offering them as part of their suite of products. These can range from as little as $2,000 up to $75,000 and are often able to be approved and funded very quickly, sometimes on the same day you apply.
However, it’s important to understand that these loans can’t usually compete with secured finance. The wider availability and fewer application requirements serve as somewhat of a trade-off in this respect. However, this doesn’t mean you can’t get an unsecured personal loan at a low interest rate. Many lenders offer this product at highly affordable rates to the right customers, so they may end up being the best option for you.
Personal lines of credit
A line of credit is a different type of personal finance from the standard loan structure. While the other loan types involve you taking on a lump sum and paying it off over a pre-determined period, lines of credit act similarly to a credit card. You’re approved for a set limit and can withdraw funds up to that cap whenever you wish instead of managing a large sum all at once.
These are often revolving, meaning they’re able to stay open indefinitely as long as it remains viable for them to do so. Another key benefit is that you’ll only pay interest on the amount you’ve used, rather than the full limit. However, because of the convenience and flexibility that these products offer, you’ll often be required to pay more in interest and fees than either of the other two loan types.
Is the loan with the lowest rate always the cheapest?
No – there are several additional costs which may also be charged as part of your personal loan, so it’s important to keep an eye on these when comparing offers on the market. The two most prominent of these are establishment and ongoing fees. The former is a one-off charge for setting up your loan agreement which can cost up to around $600 in some cases, while the latter is included in your instalments each month and generally cost between $5 and $10. However, many lenders don’t charge either one or both of these fees, which makes them especially crucial to compare.
Some lenders also charge early repayment fees if you pay out your loan ahead of schedule (which vary depending on the size of your loan and the time left to run on your agreement), while all will enforce late payment fees of between $15 and $35. If you wish to compare loans based both on interest and fees, which is always recommended, you should consider a loan’s comparison rate. This is a figure which incorporates both interest and fees to give you a more representative indication of the cost of the loan. However, it only includes regular fees like establishment and ongoing rather than the other conditional charges which may not apply.
How else should I compare personal loans?
It isn’t just interest rates you should look to when comparing different finance offers. There are many other areas that should be factored into your decision making which can improve your chances of securing the right loan for your needs. Fortunately, Savvy makes it simple to compare loan offers from lenders across Australia by bringing all the most important comparison information to you, taking the legwork out of researching different deals. The factors to think about when picking out your ideal loan are:
Borrowing power
Not all loans are made equal in terms of the amount you’ll be able to borrow. While unsecured loans can vary from as little as $2,000 up to $75,000 (as mentioned earlier), many lenders will restrict your ability to borrow larger amounts by capping their loans at $50,000. Others will implement minimums of $5,000. It’s for these reasons that you should always ensure the lenders you’re considering can accommodate the size of loan you’re looking for.
Available loan terms
Similarly, although loans can range from as short as one year to as many as seven, different lenders will require you to adhere to a slimmer range of potential terms. There are many personal loans which are capped at five years, which may provide some difficulties for borrowers who are looking to take advantage of the full seven years to make their instalments more comfortable. Others may force you to take two to three years to pay out a smaller loan, which would cost you more overall than if you planned to pay it off in 12 months.
Payment flexibility
You should always try to give yourself as much flexibility as possible when it comes to how you can repay your debt. Having the freedom to pay above the minimum required amount is one such way to open the door to you saving money on your loan, so you should look for lenders who won’t charge you to do so. For instance, a $30,000 loan at 8.5% p.a. over five years would cost you almost $7,000 in interest but contributing an extra $100 each month would save you over $1,200 and trim ten months off your loan.
Other additional features
If you enjoy the flexibility which extra repayments bring to your loan, you may also enjoy having a redraw facility attached as part of your agreement. These enable you to withdraw funds from the reserve of extra repayments made across your term, providing access to money without requiring you to apply for another loan. However, taking funds away from your principal can result in your loan costing more and taking longer to pay off in the long term. You should also look for loans which accommodate your need for either monthly, fortnightly or weekly repayments.