Compare Australia's top fixed rate personal loans

A fixed interest rate is where you lock in the rate on a loan for an agreed-upon period of time, typically one to five years. The interest charged on your loan principal will not change during this fixed period, meaning neither will your personal loan repayments.

Budgeting is typically a lot easier with a fixed interest rate, as your mortgage repayment amount will not change over the fixed period. This stability in your finances may offer you peace of mind, as you'll know exactly how much you’ll be paying each month. 

Additionally, a fixed interest rate can act as a shield against potential interest rate hikes in the market. If interest rates rise during your fixed term, your locked-in rate remains unaffected, potentially saving you money over the life of the loan. However, the trade-off for this stability is typically less flexibility compared to variable rate loans, where you might benefit from falling interest rates and get more access to flexible repayment features. 

Fixed rate loans are generally seen as  more consistent and stable compared to variable rate loans. With a fixed interest rate, your repayments remain the same, making your household budgeting simpler. 

In contrast, variable interest rates on personal loans can fluctuate monthly, as determined by the lender and influenced by the Reserve Bank of Australia's cash rate. This could make budgeting challenging, as your monthly repayments may increase or decrease unexpectedly, unlike a fixed rate personal loan. 

While it's possible you may benefit from reduced interest rates if the cash rate were to fall, it’s vital to remember that lenders often act independently of the RBA. If you’re considering a variable rate with the expectation of cash rate cuts being swiftly passed on to your personal loan, you might need to be patient, as this could take longer than anticipated.

Beyond interest rates, it’s important to note that some lenders do restrict helpful features to variable loans only, so it's worth keeping this in mind when comparing these rate types. 

When you’re looking for a good deal on a fixed rate personal loan, it makes sense to start narrowing down your available options by looking at which lenders are offering the most competitive interest rates. 

However, once you take ongoing fees and other charges into account, low interest personal loans may not actually be the cheapest options available. Low interest personal loans with high fees may end up costing more over the life of the loan than higher-interest personal loans with lower fees.

Some fees you may be charged include:

• Application fees
• Establishment fees
• Early repayment fees
• Redraw fees
• Late payment fees
• Ongoing monthly fees
• Other account keeping fees

To get a more accurate idea of a personal loan’s total cost to you, consider its comparison rate. The comparison rate is the approximate combined total of a loan's advertised interest rate and many of its fees and charges. This may help some borrowers gain a better understanding of the potential ongoing costs associated with a loan. For example, if a personal loan has a low advertised rate, but much higher comparison rate, you may assume there are costly fees involved.

Not every cost associated with a loan is included in its comparison rate, so look into additional costs, features and any benefits before making your final choice. Lenders may charge higher ongoing costs, such as an annual fee, if the personal loan includes features. If you prefer to minimise fees as much as possible, a no-frills basic personal loan may better align with your budget.

Fixed rate personal loans tend to come with costly break fees if you try to leave the fixed period early and refinance (or even pay off the loan early). However, it is still possible to refinance a fixed rate loan, but the process may be expensive. Also known as early termination or exit fees, these costs can be substantial and are designed to compensate the lender for the interest income they would lose if you break the loan early.

Before making any decisions, request a break cost calculation from your lender. This will give you a clear picture of the financial implications of breaking your fixed rate loan.

When deciding whether it may be worth it to make the switch, consider using RateCity’s personal loan switch and save calculator, and be sure to factor in all the fees and charges payable. It may be more cost effective to simply pay off the personal loan in full over the loan term than to refinance to a lower rate.

One risk when you refinance is that you can often end up extending your loan term. If you only had, say, 12 months left to repay your loan, by increasing the loan term another 2-3 years you'll end up paying thousands more in interest charges. 

Repayments on a personal loan

To demonstrate the impact of a personal loan interest rate on your overall repayments, RateCity has crunched the numbers on the total interest payable for a 5-year, $30,000 personal loan at two different interest rates. 

Personal loan interest rate comparison: impact on repayments

Source: RateCity.com.au. Note: Hypothetical example for demonstrative purposes of 5-year, $30,000 personal loan on two fixed interest rates of 7.00% and 12.00%. Does not factor in fees. 

As you can see, while a 4% difference in interest rates does not seem that significant, by paying a higher interest rate, you could end up paying $4,398 more in interest charges. 

There is no one 'best' fixed rate personal loan, but you can find your best personal loan by comparing your options carefully. Your best personal loan may come with a low interest rate and few fees, reducing the overall cost of borrowing. For others, the best personal loan comes with helpful features, such as making extra repayments without penalty and a redraw facility. Some Australians may prioritise a Big Four Bank, while others prefer online-based competitor lenders. You ultimately need to decide what personal loan features best suit your financial needs and budget.

Start by using the comparison table on this page to compare offers available from different lenders. You'll be able to filter down your personal loan preferences to easily compare options side by side, so you may easily create a shortlist. Then, sort your results by the lowest interest rates or highest Real Time Rating scores to view the most competitive options first. 

Real Time Ratings is RateCity’s world-first rating system that ranks personal loans based on your individual requirements. Looking at the Real Time Ratings score may be one way to help you narrow down your shortlist of best personal loan options.

These are some of the eligibility requirements that borrowers typically need to meet in order to secure a fixed rate personal loan.