Compare some of Australia's cheapest personal loans
A cheap personal loan will have low rates and low fees. Compare cheap personal loans to find an offer ideal for you. Consider the purpose of your loan and what features are important to your situation before you decide.
The lowest personal loans 3.65% (comparison rate 4.59%) is from Australian Military Bank’s Green Loan product.
Variable up to 7.99%
1 year to 7 years
Enjoy the flexibility of a variable-rate personal loan on a competitive interest rate.
Fixed up to 8.69%
3 years to 5 years
Enjoy lower rates and no early repayment fees with an unsecured loan.
Fixed up to 8.99%
1 year to 5 years
An unsecured personal loan with a competitive interest rate and no ongoing or extra repayments fees, giving you the flexibility to pay it off faster.
Winner of Excellent credit personal loans, RateCity Gold Awards 2021
Fixed up to 7.05%
1 year to 7 years
Pay no ongoing fees, and avoid being penalised for paying off your personal loan early.
Fixed up to 8.5%
3 years to 5 years
Fixed up to 17.95%
1.5 years to 7 years
Fixed up to 21.99%
1 year to 7 years
Fixed up to 10.49%
3 years to 7 years
Fixed up to 10.49%
3 years to 7 years
Cheap personal loans*
For many borrowers seeking personal loans, the question that's ultimately at the back of their mind is "what's the cheapest?"
When looking for the cheapest personal loan, you should compare:
- Interest rates
- Fees and charges
This will help you to work out which lenders will cover your expenses or consolidate your debts without costing more than you can afford. By looking at the features and benefits offered by different lenders, you can work out which cheap personal loans can provide the greatest value for your money.
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What is a cheap personal loan rate?
If you're specifically hunting for a cheap interest rate, you may want to look for one that is lower than average. This means a cheap personal loan rate could be 11 per cent or under.
However, it is important to remember that you don't just pay interest on a personal loan - there are usually fees and charges involved as well, which can make a big difference to a loan's total cost. A low interest personal loan with high fees may cost more overall than a higher-interest personal loan with cheaper fees and charges.
Review comparison rates to find cheaper deals
One simple way to work out the approximate cost of different personal loans is to look at their comparison rates.
The personal loan comparison rate percentage figure combines a personal loan's advertised interest rate with its standard fees and charges, and can be used to help narrow down your shortlist of cheap personal loan options.
Keep in mind that some personal loans may also include nonstandard fees and other costs that aren't included in its comparison rate. Also, to make sure you get great value from your personal loan as well as a cheap deal, check what extra features and benefits are offered by each lender.
What to look for in a cheap personal loan
When looking for a cheap personal loan, the main thing that will cost you in the long run is the extra interest you'll need to pay back to your lender, so it's worth looking for a personal loan with a low interest rate if possible.
Other costs to look out for that will determine whether your loan is the cheapest on the market for your financial needs are fees and charges, including:
- Loan approval fee
- Establishment fee
- Annual fee
- Administration fee
- Late payment fee
- Early Repayment Fee
- Default fee
Staying on top of your personal loan repayments is key to avoiding a lot of these major fees. However, you should always compare fees across your chosen cheapest personal loans, as there are loans that don't charge upfront, annual and/or administration fees.
Fixed and variable interest rates
The next step for finding the cheapest personal loan rates is to work out whether you'd prefer your personal loan to have a fixed or variable interest rate.
A fixed interest rate is set by your lender at the start of your personal loan term, and remains the same for the duration of your loan. This keeps your repayments the same for the entire term of your personal loan, and if these are cheap enough for you to easily afford, then organising your monthly budget should stay nice and simple.
A variable interest rate, on the other hand, may be adjusted by your lender over the term of your personal loan, to better suit the current economic conditions. It's possible that a rate cut could lower your repayments, providing you with an even cheaper deal on your personal loan. However, interest rate rises could make your initially cheap personal loan repayments much more expensive, so consider your options in relation to your financial situation.
Is it cheaper to pay off your personal loan early?
Short answer - yes, sometimes, though not always.
Longer answer - Making extra repayments onto a personal loan can help bring you closer to making an early exit from the loan. By completing your personal loan repayments ahead of the scheduled term, you may be able to ultimately pay less total interest on your loan, for a cheaper deal overall. So far, so good.
Things to consider when paying off your personal loan early:
- Some lenders will charge fees for making extra loan repayments or an early exit from your loan, to make up for the interest payments they'd be missing out on.
- These fees tend to be more common on fixed rate personal loans where you're expected to stick to a fixed repayment schedule, though they are sometimes present in variable rate loan deals too.
- Check your personal loan's terms and conditions, in case paying it off early ends up costing you more than you expected.
Does your cheap personal loan allow you to easily make extra repayments and get ahead on your loan? That's great! Why not take this opportunity to add your spare cash to your personal loan and get it paid off as quickly as possible?
If you're concerned that this could possibly leave you short of spare cash for emergencies where you could really need it, it may be worth considering a personal loan that offers a redraw facility.
When you get ahead in paying off one of these personal loans, the redraw facility will allow you to withdraw the surplus funds, subject to your lender's terms and conditions, so you can enjoy greater financial flexibility while bringing you closer to making an early exit from your personal loan.
Secured or unsecured personal loans: what's cheaper?
On average, secured personal loans are the cheaper or more cost-effective choice. If you already own a car, or have equity in property, you may be able to guarantee your personal loan against the value of your asset. These secured personal often have lower interest rates due to their reduced lender risk, allowing you to enjoy cheaper loan repayments.
If you don't have access to an asset with enough value to secure your personal loan, or if you'd rather not risk potentially losing your asset if you're unable to make your loan repayments, there is the option of an unsecured personal loan.
As these loans tend to involve greater lender risk, they're more likely to have higher interest rates, resulting in more expensive repayments.
100 per cent loans
What if you want a personal loan, but don't quite have enough money saved up for a full deposit?
Some lenders offer:
- Personal loans with a high Loan to Value Ratio (LVR), where you pay a smaller deposit up front, and borrow a greater percentage of your loan's total value.
- 100 per cent loans, where you pay no deposit at all, and instead borrow the full total.
Lenders typically consider these loans to be higher risks, and may charge higher interest rates as a result. Look at your finances and work out whether it would be cheaper to save up for a deposit, or to make higher monthly repayments on your personal loan.
If you're currently juggling repayments for multiple different debts, and struggling to manage their combined interest costs, taking out a low interest personal loan for debt consolidation could ultimately prove to be a cheaper option, as you'd be paying just the one rate of interest. Plus, making just the one repayment per month can help make managing your budget so much easier.
However, not every personal loan can be used for debt consolidation, so remember to check with the lender first.
Are there 'no credit check' personal loans in Australia?
If you apply for a personal loan with a major lender such as Commbank, you can expect to undergo a credit history check. For those with bad credit this can be a daunting experience, especially as having a loan application rejected can negatively impact your credit score.
Having bad credit shouldn't stop you from finding a cheap personal loan. There are a variety personal loans available that involve no credit check.
Where to find no credit check personal loans in Australia:
- Payday loans
- Peer-to-peer loans
- Secured no credit check personal loans
- Unsecured no credit check personal loan
However, you must consider the disadvantages of these types of loans, including higher interest rates and fees. For no credit check personal loan options like payday loans, it just takes one missed repayment to find yourself up to your neck in huge penalty fees, putting you in financial trouble.
Compare cheap personal loans
The cheapest personal loan isn't always the personal loan that provides you with the most value, so before making your final decision, it's worth comparing the personal loan offers from several different lenders at RateCity, and then work out whether you're comfortable with repayments using a personal loans calculator.
Once you find a personal loan that costs you less money, while providing you with features and benefits that suit your financial situation, you'll be well on your way towards fulfilling those personal goals of yours.
*The phrase 'some of the cheapest' is not a recommendation or rating of products. This page compares a range of home loans from selected providers, not all products or providers are included in the comparison. No home loan is one size fits all. The best home loan for you will not be the best home loan for someone else. As a result, it's worth getting advice on whether a product is right for you before committing.
Senior Financial Writer
Mark Bristow is a senior financial writer for RateCity and an experienced analyst, researcher, and producer. Working for over ten years, Mark previously wrote and researched commercial real estate at CoreLogic, and has seen articles published at Lifehacker and Business Insider, among others. Most recently, Mark has joined RateCity working across finance as a whole. Whatever the topic, Mark’s goal is always to provide simple solutions to complex problems.
Today's top personal loans
Frequently asked questions
Can you refinance a $5000 personal loan?
Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.
If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.
What is a bad credit personal loan?
A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.
Should I get a fixed or variable personal loan?
Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.
A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.
What is a personal loan?
A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.
Loan sizes typically range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.
Is a personal loan a variable or fixed-rate loan?
Depending on the personal loan lender, you may be able to choose between a fixed and a variable interest rate. But, there are a few distinct differences between the two, so it’s important to weigh up the pros and cons before deciding on what’s right for you.
A fixed interest rate loan gets you the convenience of knowing exactly how much you need to repay each fortnight or month. On the other hand, you generally won’t be able to make lump sum or advanced payments to close your personal loan early - or at least not without a penalty.
With a variable interest rate personal loan, you may be able to get a longer loan repayment term, with the option of paying off the loan early. You typically won’t need to pay any additional charges for an early full repayment either. The potential disadvantage with an interest rate that can change is that your repayment is not entirely predictable, as it can fluctuate with the market. However, you’ll likely have more options as more lenders offer a variable interest rate personal loan.
How much can you borrow with a bad credit personal loan?
Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.
What is the average interest rate on personal loans for single parents?
Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.
Can I repay a $3000 personal loan early?
If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.
Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.
Can I merge my personal loan with my home loan?
Yes, you can refinance your home loan and, in the process, merge or consolidate your personal loan and home loan. By doing so, you can lower the number of debts you have, and you may also reduce the total interest you have to pay.
However, you should consult a financial advisor or a mortgage broker to confirm that you are decreasing your total outstanding debt, including interest payments. The repayment term for a home loan can be much longer than that for a personal loan, and by merging the two, you could be repaying a higher amount over the full term.
Does refinancing a personal loan hurt your credit score?
Personal loan refinancing means taking out a new loan with more desirable terms in order to access a more competitive interest rate, longer loan term, better features, or even to consolidate debts.
In some situations, refinancing a personal loan can improve your credit score, while in others, it may have a negative impact. If you refinance multiple loans by consolidating these into one loan, it could improve your credit score as you’ll have only one outstanding debt liability. Your credit may also improve if you consistently pay the instalments on time.
However, applying to refinance with multiple lenders could negatively affect your credit if your applications are rejected. Also, if you delay or default the repayment, your credit score reduces.
Can unemployed single parents get personal loans?
It can be more difficult for unemployed borrowers to successfully apply for a personal loan. Most lenders require borrowers to have a regular income available to cover the cost of loan repayments.
If you’re self-employed, or if less than half of your income comes from Centrelink, you may not be eligible for some personal loan options. Consider contacting the lender before applying.
How long does it take to get a student personal loan?
Completing an online personal loan application can often take anywhere from 10 minutes to 1 hour. Depending on your lender, processing your personal loan application may take anywhere between 1 and 24 hours. If your personal loan application is approved, you may receive the money in your bank account the following business day, or, in some cases, the same day.
How can I get a $3000 loan approved?
Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.
Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.
Can I get a bad credit personal loan with a guarantor?
Some lenders will consider personal loan applications from a borrower with bad credit if the borrower has a family member with good credit willing to guarantee the loan (a guarantor).
If the borrower fails to pay back their personal loan, it will be their guarantor’s responsibility to cover the repayments.
Can you pay off a quick loan early?
Many lenders will allow you to make extra repayments onto a quick personal loan when you can afford them, or even exit the loan early, which can help reduce the total interest you are charged. Be sure to check your quick loan’s terms and conditions, as some lenders charge early exit fees for paying off a loan ahead of schedule.
Do student personal loans require security?
While some personal loans can be secured by the value of an asset, such as a car or equity in a property, student personal loans are often unsecured, which typically have higher interest rates.
Some lenders also offer guarantor personal loans to students. These loans have lower interest rates, as a guarantor (usually a relative of the borrower with good credit) will fully or partially guarantee the loan, taking on the financial responsibility if the borrower defaults.
How can I improve my credit rating/score?
Your credit score will improve if you demonstrate that you’ve become more credit-worthy. You can do that by minimising loan applications, clearing up defaults and paying bills on time.
Another tip is to get the one free credit report you’re entitled to each year – that way, you’ll be able to identify and fix any errors.
If you want to fix an error, the first thing you should do is speak with the credit reporting body, which may take care of the problem or contact credit providers on your behalf.
The next step would be to contact your credit provider. If that doesn’t work, you can refer the matter to the credit provider’s independent dispute resolution scheme, which would be the Australian Financial Complaints Authority (AFCA).
AFCA provides consumers and small businesses with fair, free and independent dispute resolution for financial complaints.
If that doesn’t work, your final options are to contact the Privacy Commissioner and then the Office of the Information Commissioner.
Can I get a personal loan if I receive Centrelink payments?
It is hard, but not impossible, to qualify for a personal loan if you receive Centrelink payments.
Some lenders won’t lend money to people who are on welfare. However, other lenders will simply consider Centrelink payments as another factor to weigh up when they assess a person’s capacity to repay a loan. You should check with any prospective lender about their criteria before making a personal loan application.
Can I get guaranteed approval for a bad credit personal loan?
Few, if any, lenders would be willing to give guaranteed approval for a bad credit personal loan. Borrowers with bad credit histories can have more complicated financial circumstances than other borrowers, so lenders will want time to study your application.
It’s all about risk. When someone applies for a personal loan, the lender evaluates how likely that borrower would be to repay the money. Lenders are more willing to give personal loans to borrowers with good credit than bad credit because there’s a higher likelihood that the personal loan will be repaid.
So a borrower with good credit is more likely to have a loan approved and to be approved faster, while a borrower with bad credit is less likely to have a loan approved and, if they are approved, may be approved slower.
What causes bad credit ratings/scores?
Failing to repay loans and bills will damage your credit score. So will falling behind on your repayments. Your credit score will also suffer if you apply for credit too often or have credit applications rejected.