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Fixed rate or variable: top personal loans for June 2023

Peter Terlato avatar
Peter Terlato
- 3 min read
 Fixed rate or variable: top personal loans for June 2023

As interest rates climb ever higher, Australians are more cautious when it comes to spending and borrowing funds. Whatever your needs, it’s sensible to consider a variety of loan options in order to find finance that fits your budget.

The latest lending indicators from the Australian Bureau of Statistics (ABS) saw the value of new loan commitments for fixed term personal finance rise (+1.5%) in April, following a significant slump (-3.0%) in March 2023.

Commitments for personal lending were pushed up by an increase in the number of loans for road vehicles (+0.5%) but were held back by a big drop in lending for personal investment (-5.1%).

New loan commitments April 2023

Source: ABS data on new loan commitments, personal fixed term loans (seasonally adjusted).

Fixed vs variable personal loans - which is better for you?

There are many factors that go into selecting a personal loan, such as deciding on a lender and comparing the different features of loans. One of the most important concerns is deciding between a fixed or variable interest rate.

A fixed rate personal loan offers a sense of financial security - the amount you’ll need to repay won’t change over the course of the loan’s term. You’ll be sheltered from future rate rises but you’ll miss out on any rate reductions.

A variable rate personal loan is subject to fluctuations. Lenders set their rates based on a wide range of factors. If a lender raises its rates, borrowers can expect their repayment costs to increase. Similarly, if a lender cuts rates, borrowers may benefit from lower repayments.

Depending on the lender and the specifics of the loan, you may be able to choose between a fixed and a variable rate. As is the case with most financial decisions, the loan that’s right for some borrowers may not be right for you.

Finding the personal loan that’s ideal for your situation

If you're seeking a personal loan with repayments that fit your budget, credit score and desired loan term, RateCity's personal loans calculator can provide you with an estimate to help find one that's right for you.

RateCity has ranked the top-rated personal loans on our Personal Loans Leaderboard using our comprehensive, game-changing Real Time Ratings™ system. This system gives loan products a score out of five, based on cost and flexibility. Unlike other ratings systems that rank their products once or twice a year, our Real Time Ratings™ system ranks products live as you use the site, helping you narrow down your shortlist of personal loan options.

Rankings are correct at the time of publishing. Please note lenders may trade places on the list as interest rates and fees change and RateCity’s tracker reflects these movements.

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Product database updated 23 Jul, 2024

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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