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When you're planning a holiday, it makes sense to compare destinations, flights and hotels to find the best deals. If you're starting a business, it's worth comparing your products or services to those of the competition to see what you can do better. If you're buying a car, you should compare different models to work out which one will get you from A to B in style.

So when it comes to personal loans, which can be used to pay for any of these expenses, or to help you consolidate your existing debts, it also makes sense to compare the offers from different lenders. RateCity puts a wide variety of personal loan options in one place, so you can compare their interest rates and other benefits side by side and make an informed decision.

Compare personal loan interest rates

No matter your reason for taking out a personal loan, you're going to have to pay interest to your lender as well as paying back your balance. While comparing advertised interest rates is usually a good way to start your search for personal loans on RateCity, keep in mind that the personal loan with the lowest interest rate may not necessarily provide the cheapest deal, or the most value for your money.

Many lenders charge fees as well as interest on their personal loans, which can make an impact on their overall cost to borrowers. A personal loan with a low advertised interest rate, but high fees and charges, may ultimately turn out to be a more expensive option than a personal loan with a higher interest rate and lower fees and charges.

To get a more accurate picture of the relative costs of different personal loans, it's often worth also looking at their Comparison Rates, which combine their interest rates with their standard fees and charges.

It's worth noting that a personal loan's Comparison Rate may not take the lender's nonstandard fees into account, so you may want to double-check whether the loan could end up costing more than you expected. You may also want to find out which personal loans on your shortlist come with extra features that could offer additional value and influence your final decision.

Compare fixed and variable interest rates

If you opt for a fixed interest rate on your personal loan, you'll pay the same amount of interest with each repayment for the full term of your personal loan. Every repayment will bring you one step closer to getting your debt fully paid off, which can help to keep your household budget nice and simple. However, fixing your interest rate in advance could mean missing out on potential savings from interest rate cuts.

If you choose a personal loan with a variable interest rate, then your lender may increase or decrease the amount of interest on your personal loan repayments each month. If there's a rate cut, your repayments may drop, leaving you with some spare cash in your budget.

However, if rates rise, you could find yourself coming up short, unless you do some careful budgeting in advance.

Compare the benefits and drawbacks of fixed and variable interest rates to work out which option will best suit your financial situation.

Compare extra repayment/early exit fees on personal loans

When you compare the cost of your personal loan's repayments to the available finances in your monthly budget, you may sometimes find yourself with some extra money to spare. These could be savings from an interest rate cut, some extra cash from a tax refund, or a bonus from work.

While saving this money or using it elsewhere is certainly a valid option, you may also want to consider adding the extra money onto your personal loan. By making extra repayments, you can get closer to fully paying off your personal loan ahead of schedule, which can help to reduce the total amount of interest you pay overall.

However, it's worth keeping in mind that some lenders charge fees for making extra repayments or for making an early exit from your personal loan, to help make up for the extra interest payments they'd be missing out on. These fees are usually more common in fixed rate personal loans with pre-set repayment plans than in variable rate personal loans, which are often more flexible, though there are always exceptions. If you're hoping to pay off your personal loan ahead of schedule, it's worth comparing the available options for a lender with flexible terms.

Compare personal loan redraw facilities

If you choose a personal loan that allows you to easily get ahead on your repayments, it's often also worth comparing the available options to find a lender that also offers a Redraw Facility. Once you're ahead on your personal loan repayments, this redraw facility can be used to withdraw your surplus balance if required.

This can allow you to confidently make extra repayments onto your personal loan, knowing that you'll have the option to access this money again in case of emergency, subject to the lender's terms and conditions.

Comparing debt consolidation options

If you're already paying off multiple loans or other debts to a variety of lenders, and struggling to manage the numerous payments and interest charges, if you compare the available options, you may decide to consolidate these debts with the help of a personal loan.

By paying off your other debts with the money from a personal loan, you can swap your plethora of lenders for just the one, and make one simple, easy-to-budget repayment per month, and be charged interest just the once.

However, not every personal loan can be used for debt consolidation, so it's worth comparing the available options from different lenders.

Comparing secured and unsecured personal loans

If you already own a car or another valuable asset, such as equity in a property, you may be able to enjoy a lower interest rate by opting for a secured personal loan. These loans guarantee the money that you borrow against the value of your asset, which can be seized by the lender if you don't stay up to date with your repayments. Secured personal loans can sometimes also be viable options for unemployed borrowers, or borrowers with bad credit, as the extra security helps to reduce risk to the lender.

Unsecured personal loans are also available for borrowers who don't have access to a valuable asset, or for anyone who'd prefer not to risk potentially losing their security. Because these loans tend to be riskier to lenders, you're more likely to be charged a higher interest rate as a result, so it's worth comparing the options that are available to you.

Comparing deposit options

How much money do you have saved up for a deposit on a personal loan? Even if the answer is "not as much as you'd like", there may still be options available.

Some lenders can provide personal loans with a high Loan to Value Ratio (LVR), where you pay a smaller upfront deposit and instead borrow a greater percentage of your loan's total. 

Other lenders can even offer 100% personal loans, where you pay no deposit and instead borrow the full loan balance.

Remember when you compare these personal loan options that they may come with higher interest rates, due to the increased lender risk.

Compare personal loans at RateCity

Do you know what you want from a personal loan, or do you want to learn more about the options that are available to you? Either way, you can find a variety of personal loans from a range of lenders right here at RateCity.

By comparing the interest and comparison rates side by side, then taking a closer look at the features and benefits offered by different lenders, you'll be well on your way to finding a personal loan that's ideally suited to your personal finances.

Make your personal loan comparisons now

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

What do credit scores have to do with personal loan interest rates?

There is a strong link between credit scores and personal loan interest rates because many lenders use credit scores to help decide what interest rates to offer to potential borrowers.

If you have a higher credit score, lenders will probably classify you as a lower-risk borrower. That means they’ll be keen to win your business, so they may offer you a lower interest rate if you apply for a personal loan.

If you have a lower credit score, lenders will probably classify you as a higher-risk borrower. That means they might be concerned about you defaulting on the loan and costing them money. As a result, they might protect themselves by charging you a higher interest rate.

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.

Are there low doc personal loans?

Self-employed borrowers may be eligible for low doc personal loans, which require less documentation in their application process than many other personal loan options.

It’s important to remember that though low doc personal loans may require less paperwork, you may need to provide additional security, or pay a higher interest rate.

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.

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.

Can I get a no credit check personal loan?

Personal loans with no credit checks are available and called ‘payday loans’. These are sometimes used as short-term solutions for cash-strapped Australians. They often carry higher interest rates and fees than regular personal loans, and individuals risk putting themselves into a worsened cycle of debt.

Can I include my spouse’s income on a personal loan?

If you apply for a joint personal loan with your spouse, you can include their income on the application. If approved, they then become jointly liable for the loan.

Both you and your spouse need to meet the eligibility criteria, such as income, age, and residency requirements, as stipulated by the lender. A joint loan could increase your chance of approval for a higher amount, as both borrowers’ incomes are assessed when determining borrowing capacity. 

What are the Westpac personal loan eligibility criteria?

The process to apply for a personal loan from Westpac is simple and can be done online. To be eligible for a Westpac Bank personal loan, you must meet the eligibility criteria. These include:

  • You should be over 18 years old
  • You must be a permanent resident or hold a valid visa with confirmed employment in Australia
  • You should earn a regular and permanent income of at least $35,000 before taxes

If you feel you meet these eligibility criteria, you can apply for a personal loan with Westpac. With your application form, you’ll also have to submit the following documents:

  • Personal details including name, contact information, and residential address 
  • Proof of identity such as drivers licence or passport details
  • If you’re self-employed, you’ll need a list of assets, savings, investments, and liabilities as well as your most recent tax return information
  • If you’re an employee you’ll need to submit information related to your employment and finances like bank statements and payslips

Westpac Australia personal loans are available for amounts from $4,000 up to $50,000 and loan terms of up to seven years.

What is a credit rating/score?

Your credit rating or credit score is a number that summarises how credit-worthy you are based on your credit history.

The lower your score, the more likely you are to be denied a loan or forced to pay a higher interest rate.

Can I apply for a quick loan online?

While some lenders will require you to provide paperwork in person, many lenders will allow you to make an application for quick personal loan online. You’ll still need to provide information on your identity, income, and loan purpose in most cases.