Personal loans can be a great way to consolidate debt, finance a major purchase, or cover unexpected expenses. But with so many lenders and loan products on the market, it can be difficult to know where to start.
To help you find the best personal loan for your needs, we’ve compiled a list of the 7 best low-interest personal loans in Australia for 2023. We’ve also included some helpful tips on what to look for when comparing personal loans.
- How to get a low-interest personal loan in Australia
- 7 best low-interest personal loans in Australia
- Answers to some of the most frequently asked questions on personal loan in Australia
How To Get A Low-Interest Personal Loan In Australia
Personal loans have rigorous qualifying requirements. However, you may need to meet different lending conditions to get the lowest personal loan interest rate.
The following may help you get a low-interest personal loan from most lenders:
1. First-rate credit
Personal loan providers want a decent to exceptional credit score. A decent credit score may get you a loan, but more substantial credit history and score may give you a better interest rate.
“Ideal” borrowers with the lowest default risk get the best personal loan interest rates. Financial service companies like home loan lenders agree. If you have good credit, you might be able to get a personal loan with a low-interest rate.
2. Secured loans
Different types of personal loans have different interest rates. A secured personal loan employs a vehicle or jewelry as security.
The asset will be confiscated if you fail on the loan. If your asset is in danger, you’re less likely to skip a payment, reducing the lender’s risk. Secured loans provide lower interest rates.
Unsecured personal loans offer the same amount without collateral. The lender won’t confiscate your asset if you default, but they may charge you a higher interest rate.
3. Compare lenders
Personal loan applicants often use their lifelong bank. Loyal customers must be approved, right? Wrong. You may miss out on a better personal loan by not evaluating your choices and still have to fulfill the lender’s approval requirements.
Smaller lenders, internet lenders, and neobanks typically provide lower interest rates than larger banks. Big banks have more overhead, such as branches than smaller ones. Competitor lenders may slash interest rates and fees by lowering overheads.
Your credit and financial position will determine your rate. It’s a good reminder to shop around and compare personal loans before signing on the dotted line.
4. Additional payments
Paying more may lower your interest. Some personal loans allow additional payments. Extra payments will reduce the loan term by reducing the principle. Since shorter terms carry less interest, this may lower your overall interest payments.
The lender may demand a greater rate than a more straightforward loan for the feature. To maximize this function, you may wish to budget for additional payments.
7 Best Low-Interest Personal Loans In Australia
There are many reasons you could be looking for the most OK low-interest personal loans, so it’s crucial to consider why you need them before applying for a loan.
To discover the best personal loan for you, search and compare across one of Australia’s largest databases of more than 100 personal loan companies. Since everyone’s demands are different, there is no one optimal personal loan. Filters might help you get better results.
1. Heritage Bank
You may lock in a fixed interest rate starting at 8.49% p.a. (8.84% p.a. comparative rate*) with Heritage Bank’s Standard Personal Loan. With loans available for up to seven years, the loan also provides a variety of customizable term choices. Additionally, you can make weekly, biweekly, or monthly installments.
The Heritage Bank Standard Personal Loan is an unsecured loan with a $5,000 minimum and $50,000 maximum loan amount; as a result, you won’t need to pledge your car or any other assets as collateral.
Although you are permitted to make additional payments on this loan, you should be aware that doing so may result in additional penalties.
It’s also good to know that this loan includes a redraw facility. You may access any additional repayments you’ve made if you ever need access to more money.
Remember that avoiding touching any further loan repayments you’ve made is preferable until necessary. If not, your efforts to pay off your debt early will be for naught.
Several expenses are associated with the Heritage Bank Standard Personal Loan (Unsecured), including a $200 application fee, a $5 service fee, and a $30 late payment fee.
- Fixed-rate of 8.49% per year (8.84% per year comparative rate*)
- Redraw capability and further payments
- Flexible choices for repayment
- $200 in advance
2. Wisr Unsecured
With Wisr, you can apply quickly online for loans ranging from $5,000 to $64,000 with terms of three or five years. Thanks to the unsecured interest rate, you don’t have to worry about securing the loan with assets or property.
Remember that Wisr utilizes a risk-based pricing model, much like many peer-to-peer and internet lenders in Australia, so their rates will vary depending on your credit history.
Therefore, if your credit rating is A, you will be eligible for the 8.50% p.a. rate (9.34% p.a. comparison rate*), however, if your credit rating is D, you may be subject to rates as high as 17.95% p.a. (18.87% p.a. comparison rate*).
While no continuing or early repayment penalties are associated with the Wisr Personal Loan, a $595 startup fee will be applied to loans between $30,001 and $64,000.
You’ll be relieved to learn that the setup charge can be eliminated for qualified borrowers who borrow $5,000 to $30,000. To be eligible, you must register on this website; other T&Cs could apply.
- Fixed rates start at 8.50% per year (9.34% per year, compared rate*)
- Free early repayment
- No recurring costs
- $595 for the establishment.
3. Greater Bank
It has a meager fixed rate of 5.78% (compare rate: 6.16%*) and a selection of loan durations from one year to seven years. To buy a new automobile, borrowers may obtain loans ranging from $5,000 to $100,000. Remember that since you may only borrow up to 80% of the vehicle’s value, you must have at least 20% before applying.
Customers can select a weekly, fortnightly, or monthly repayment plan for the New Car Loan from Greater Bank. Additionally, they can use a redraw option and make free additional repayments if they choose to. Also, remember that borrowers have no fees associated with early loan repayment.
There are a few expenses to be aware of, even though no monthly service fees are associated with this loan. There is a $275 application cost up front, and it is preferable to set up automatic payments because you will be penalized $6 for each missed regular repayment if you don’t.
- (6.16% comparative rate*) 5.78% fixed rate
- Additional payments accepted
- facility for redraws
- Application cost of $275
4. Handepay Green Loan
With the Handypay Green Personal Loan, you may finance home improvements like installing solar panels, battery storage, inverters, solar heating and cooling, rainwater tanks, and more.
Competitive fixed rates on loans begin at 6.99% per year (7.62% per year as a comparative rate*). A loan between $2,000 and $75,000 is available, with variable credit terms of 1 to 10 years.
Additionally, you will have the option of making weekly, biweekly, or monthly repayments. As a result, you may plan your regular repayments around your spending plan and way of life.
The possibility to make free extra repayments is another valuable feature of this loan, enabling you to pay off your debt as rapidly as you like without incurring additional fees.
Be advised that there is a $250 application cost for the loan and a $35 late payment fee should you ever forget to make a payment.
- Competitive fixed rates start at 6.99% per year (7.62% per year, on average*)
- Free additional payments
- Free of monthly or early repayment charges
- $250 in advance
- a $35 late payment penalty
5. The Harmoney unsecured
The Harmoney unsecured personal loan differs from typical loans in that investors’ funds are invested in the company’s online marketplace by peers rather than the provider.
Depending on your credit history, fixed rates might range from 5.35% p.a. (6.14% p.a. comparison rate*) to 19.09% p.a. (19.99% p.a. comparison rate*).
With periods of 3, 5, or 7, Harmoney provides loans ranging from $2,000 to $70,000. There are no admin costs, and you may pay weekly, fortnightly, or monthly.
Remember that there is an application cost of $575, which you won’t be paid until the loan is funded successfully. Additionally, if the loan amount is less than $5,000, the application charge is only $275.
- Rates start at 5.35% per annum (6.14% per annum as a comparison*)
- Top-up loan feature
- No recurring costs
- Your interest rate will be based on several risk factors and will be unique to you. The implication is that although some borrowers would benefit from reduced rates, others might have a higher rate and pay more for the same loan.
6. OurMoneyMarket’s car loan
The vehicle loan from OurMoneyMarket may assist with covering the $2,001 to $75,000 cost of your used car. It provides loan lengths of 1 to 7 years and fixed interest rates that start at a low 6.25% p.a. (6.87% p.a. comparative rate*).
During the first year of the loan, that low rate will be available to you regardless of your credit score. After that, your rate may be changed based on your credit score using a tiered method.
You may pay it off weekly, fortnightly, or monthly, and there are no exit fees, early repayment penalties, or monthly account maintenance costs. Remember that a $250 setup charge is added to the principal and paid throughout the loan.
Remember that this charge could go up depending on the grade of your OurMoneyMarket loan and the overall loan amount. Although the loan allows free additional repayments, there is no provision for subsequent access to the funds.
- Fixed interest rates start at 6.25% per year (compare rate: 6.87% per year)
- No monthly account maintenance charges
- Free additional payments
- No secured loans on the market
- Loans without variable rates
- no trees
- Charged establishment fee
7. NOW Finance
For borrowers with excellent credit wanting to borrow $5,000 to $50,000, Now Finance is a popular alternative thanks to fixed interest rates starting at 6.75% p.a. (6.75% p.a. comparative rate*).
You won’t have any application fees up front or continuing costs. The maximum loan period is seven years, but if you borrow less than $8,000, it’s just three.
There is no option to redraw funds; however, you can make extra payments and pay off the loan early without paying a charge. Additionally, this loan offers the option of weekly or biweekly installments.
- no charges
- Starting at 6.75% p.a. for fixed interest rates (6.75% p.a. comparative rate*),
- borrowing between $5,000 and $50,000
- With personalized interest rates, your interest rate will depend on several things, such as your credit score, work situation, and housing history. The implication is that although some borrowers would benefit from reduced rates, others might have a higher rate and pay more for the same loan.
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To demonstrate the actual cost of a personal loan, the Comparison Rate combines the interest rate, fees, and charges of the lender into a single rate.
The presented comparative rates are based on loans of $30,000 for five years or $10,000 for three years, as specified, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans.
This rate of comparison only holds for the provided example or instances. The comparative rates will vary depending on the quantities and conditions.
Although they are not included in the comparison rate, costs like redraw fees or early repayment fees, as well as cost reductions like fee waivers, may affect the cost of the loan.
What Is The Lowest Personal Loan Interest Rate In Australia?
The Green Eco Loan personal loan from ZooLogic Pty Ltd (Illawarra Credit Union) has the lowest interest rate of 3.99% p.a. (comparison rate: 5.15% p.a.).
Which Bank Has The Lowest Interest Rate For Personal Loan?
PNB offers personal loans beginning at a 7.90% annual percentage rate. The interest rate, however, may differ from one client to the next depending on several variables, including the customer’s credit history and banking connection, to mention a few.
What Is The Easiest Personal Loan To Get In Australia?
MoneyMe is the best option in Australia for quick and simple loans. By making a quick online application, you may receive between $5,000 and $50,000 in your bank account in less than an hour. Nothing on paper. No fuss.
Which Bank Is Best For Personal Loans Australia?
Most suitable personal loans 2023
- ING Unsecured Personal Loan
- Standard Personal Loan from Heritage Bank.
- Wisr Personal Unsecured Loan.
- Green Loan by Handepay.
Can You Get A 0% Loan?
There aren’t indeed any interest-free loans. However, if you use a credit card to borrow money, you could be eligible for an interest-free loan term. Some institutions may also permit overdrafts without interest.
You can learn more from the video below:
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