Compare the top low interest personal loans

Find personal loans from a wide range of Australian lenders that best suit your needs. Compare interest rates, repayments, fees and more. - Data last updated on 20 Jan 2018

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Low Interest Personal Loans

What’s the most important consideration when you’re taking out a personal loan to pay for that dream holiday, start up that business, or to consolidate your debts so they’re easier to manage? One of the most obvious factors to keep in mind is the interest rate on your personal loan – generally, the lower the better!

When comparing low interest personal loans at RateCity, the interest rate is just one of many personal loan features to consider when making your borrowing decision.

Variable vs fixed rate personal loans

Fixed rate personal loans are great if you want to prepare your budget in advance, as they allow you to always pay the same amount of money with each monthly repayment, with no surprises or adjustments. If your fixed interest rate is a low one, you can be confident that you should always be able to afford it! However, if your interest rate is fixed in advance, it won’t get any lower if your lender starts making rate cuts.  

If you instead opt for a personal loan with a variable interest rate, the amount of interest you pay  on your loan each month could drop if the lender passes on a rate cut, allowing you to save a little money. However, it’s also possible that the interest rate could rise, which could be bad news for your bank account if you haven’t budgeted for higher repayments.

Secured vs unsecured personal loans

Securing your low rate personal loan against the value of an asset, such as a car or equity in a property, is usually seen by lenders to be a far less risky prospect than the alternative. After all, if for any reason you were to default on your personal loan, the lender could simply seize and sell your asset and keep their interests covered! Of course, to take out one of these secured low interest personal loans, you’ll need to already own an asset with enough value that your lender can be confident it would guarantee your loan.

Unsecured personal loans don’t put you at risk of potentially losing any assets, so they can be convenient if you don’t own a high-value item, or if the value of the assets you do own won’t be enough to cover your loan. However your lender is more likely to charge a higher interest rate on an unsecured personal loan to account for the added risk.

Comparison Rates

Looking for a personal loan with a low interest rate is all well and good, but what about the extra fees and charges? A low-interest personal loan with a high application fee and ongoing charges may ultimately turn out to be more expensive than a higher-interest personal loan with lower ongoing costs.

To get a better idea of the total cost of a low rate personal loan, it’s worth looking at its Comparison Rate. This percentage figure combines the approximate total of the loan’s advertised interest rate and its standard fees and charges, giving you a more accurate guideline of which loans may be better suited to your financial situation.

However, a low interest personal loan’s comparison rate may not take into account any nonstandard fees or other costs, or any extra features and benefits the lender offers that could affect your decision. Comparison Rates can be helpful for narrowing down your choice of personal loan providers, but it’s still worth taking a closer look at the available options before making your final decision.

Debt Consolidation

Are you currently paying off a variety of debts from a range of sources, all on different schedules and at different interest rates? Juggling all of these repayments can be tricky to manage, not to mention rough on your finances!

One relatively simple option for managing your various debts is to take out a personal loan for debt consolidation. By using this personal loan to pay off your other debts, you’ll be left with just the one one monthly repayment to budget for. If you’re careful and conscientious, you can find yourself debt-free much faster than you may have expected.

When you're looking for the bes debt consolidation personal loans in Australia, keep in mind that some lenders may not allow all of their personal loan offers to be used for debt consolidation, so be sure to check the terms and conditions.

Early exit/extra repayments

When you’re paying back a personal loan with a low interest rate, from time to time you may find yourself in a position where you can afford to pay back a bit extra. Getting ahead on your personal loan repayments can bring you closer to paying your loan off ahead of schedule, which can mean ultimately paying less total interest over the lifetime of the loan.

However, some lenders charge fees for making extra repayments or exiting a low rate personal loan early, to make up for the interest payments they’d be missing out on. Be sure to check whether getting out of debt with your lender won’t accidentally cost you more than you expected!

Redraw facility

Ever wished you could free up some of the extra money you’d paid towards getting ahead on a low rate personal loan so you put it to use elsewhere? Some low interest personal loans offer a redraw facility, which lets you do just that.

If you’re ahead on your personal loan repayments, a redraw facility can be used to withdraw your surplus funds when you need them, subject to the lender’s terms and conditions. The added flexibility offered by a redraw facility can help you get ahead on your personal loan repayments with confidence, knowing that even if a financial emergency was to arise, your extra cash won’t remain tied up and inaccessible in your loan.  

100% loan

If you don’t have a lot of cash saved up in your bank account, paying a full deposit on a low interest personal loan could be a challenge.

If you choose a personal loan with a high Loan to Value Ratio (LVR), you can pay a smaller deposit up-front, and borrow a higher percentage instead. Some lenders also offer 100% loans, where you pay no deposit, and borrow the full amount instead.

Just remember that these loans represent higher risks to their lenders, so they tend to come with higher interest rates. You may want to consider whether it would be better for your finances to make these higher repayments, or to save up a deposit and hopefully enjoy a personal loan with low interest.   

Compare low interest personal loans

A low interest personal loan could potentially save you pockets full of cash, and by comparing the additional features and benefits offered by different lenders, you can find a deal that’s perfect for your financial situation.

Start your financial journey by comparing low interest personal loans at RateCity – before you know it, you could have the money you need to make your dreams come true.

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