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Personal Loan - Credit Builder

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Fixed up to 28.4%

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Total repayments for a 3-year, $20,000 loan at 28.40% would be $27,215*. Terms from 1-4 years

What’s new in personal loans in June 2022?

It seems Australians are continuing to take advantage of increased travel freedoms by swapping road trips for flashier getaways.

The latest CommBank Household Spending Intentions (HSI) Index revealed that travel spending reached a new record high in April exceeding its pre-COVID peak, gaining 10.6 per cent during the month and 41 per cent on April 2021.

According to the data, spending on travel agents, airlines, cruise ships, tourist attractions, hotels & motels and bus lines all increased, with a decline in camper & RV rentals reflecting changing travel patterns with the reopening of state and international borders.

“With an interest rate hiking cycle now underway the Australian economy is in a strong position,” CommBank senior economist Belinda Allen said. 

“We are seeing a post COVID normalisation of consumer spending patterns, with lower spending on categories that increased during lockdowns like health & fitness, while higher travel and entertainment spending reflects more people being out and about.”

If you’re looking to plan a holiday in the coming months and are interested in comparing your financing options, consider using RateCity’s personal loan comparison tables or checking out the personal loans leaderboard.

Here are some of the most competitive personal loans on the RateCity database, as determined by our Real Time Ratings™ system:

Updated by Georgia Brown on 2 June 2022

What is a personal loan?

A personal loan is a credit product that allows you to borrow a certain amount of money from a lender for a specific personal use. The borrower then repays the loan amount, plus interest, over a predetermined amount of time.

What can I use a personal loan for?

Personal loans can be used for a wide variety of purposes, from helping to get on top of existing debt to paying for university fees, legal costs and home improvement projects.

When you’re making a personal loan comparison, it’s important to consider how you plan to use the loan.

Some of the types of personal loans that are available in Australia include:

What types of personal loans are there?

To get started with your comparison, it’s worth figuring out what type of personal loan may fit your needs. 

Secured personal loans

A secured personal loan is a loan that’s secured by an asset, such a car, which is used as collateral for the money borrowed. Secured loans often have lower interest rates than unsecured loans as lenders consider them to be less of a risk. You may also be able to borrow more with a secured loan than with an unsecured loan. One common example is a secured car loan, which is secured by the value of the vehicle being purchased. 

Unsecured personal loans

An unsecured personal loan doesn’t have an asset attached as collateral. While this means that an unsecured personal loan is more likely to have a higher interest rate than a secured personal loan, there's also no risk of losing your asset if you default. 

Debt consolidation loans

A debt consolidation personal loan may be able to help you manage other outstanding debts, by combining them all into a single personal loan. With just one regular repayment to manage, with one interest rate and set of fees to think about, you can simplify your budget and potentially save money.

For example, imagine you had two maxed-out credit cards and an outstanding car loan. You’re paying interest plus fees on each of these credit products. By taking out a debt consolidation personal loan, you can clear all of these outstanding debts all in one go, leaving you with just one loan to manage. You’ll be charged interest at just the one rate (often a lower rate than what’s charged on most credit cards) and pay just one set of loan fees. This may cost you less per month than managing the three credit products separately, and help make your budgeting much simpler.

Keep in mind that if you take out a personal loan with a lengthy loan term, you may pay more in interest on your outstanding debts than you would by paying them off in full separately.

Line of credit

A line of credit is a personal loan that functions similarly to a credit card. Rather than borrowing a lump sum to repay over time, you will be able to borrow and repay money up to a maximum credit limit, which is often based on the value of the asset used as security, such as a vehicle, or equity in a property.

What features should I consider when choosing a personal loan?

There are many different features to consider when choosing a personal loan. Comparing each feature carefully can assist you with finding the right product for you – because the best personal loan for one person may not be what’s best for someone else.

Interest rate

For many, comparing interest rates is the first step in their personal loan search. And it makes sense, as the loan’s interest rate will largely determine how much you pay in interest over the life of the loan. 

But first, you’ll need to decide between a fixed rate personal loan or a variable rate personal loan. A fixed interest rate will remain the same throughout the life of the loan, whereas a variable interest rate can fluctuate with the market. Generally speaking, a fixed rate loan can be easier to manage as the repayments will remain the same for the duration of the loan term. If you opt for a variable rate loan, it’s important to allow some breathing room in your budget to allow for potential rate rises.

Comparison rate

When comparing personal loan rates, remember that the lowest interest rate doesn’t always amount to the cheapest product. That’s because interest rates don’t factor in fees, which can really add to the total cost of the loan. This is where the comparison rate comes in handy, as it includes both the interest rate and the main fees payable, which can give you a better idea of the loan’s total cost. If two personal loan options have the same interest rate, but different comparison rates, the loan with the higher comparison rate may charge higher fees. 

Loan term

The amount of time you have to pay off your loan plus interest and applicable fees is determined by the length of the loan term. Personal loans typically have terms from one to five years, but some lenders offer loan terms up to seven years, and sometimes longer.

When deciding on a loan term for your personal loan, keep in mind that typically the longer the term, the lower the repayments - but the more you’ll likely pay in interest charges. Shorter loan terms may have more expensive repayments, but you’ll pay your loan off quicker and in turn spend less on interest charges.

Extra features

Different personal loan offers may offer extra features that could be important to you and how you pay off your loan. Some of these include:

  • Extra repayments: One way to pay off your personal loan sooner is to make extra repayments. However, not all lenders will allow you to make additional repayments, and some may charge a fee, while others may offer unlimited extra repayments.
  • A redraw facility: A personal loan with a redraw facility will allow you to withdraw extra repayments you’ve made and return them to your bank account. This can be handy if you want to pay less interest on your personal loan, but still want access to your money. Keep in mind that not all personal loans come with redraw facilities, and those that do may charge redraw fees.


The types of fees you may be charged for your personal loan will differ from one lender to the next. Some of these may include:

  • Upfront costs (e.g., establishment fees or application fees)
  • Ongoing fees (e.g., annual fees and/or monthly fees, including service fees)
  • Late payment fees
  • Extra repayment fees
  • Early repayment fees/exit fees
  • Redraw fees

How much can I borrow with a personal loan?

Most personal loans have a minimum amount of at least $2000. To borrow less than $2000, you may need to search for a payday loan or medium-amount loan, though be wary of the fees involved. Borrowers experiencing financial stress may also be able to apply for the No Interest Loan Scheme (NILS) for essential purchases.

The maximum borrowing amount for a personal loan may depend on the lender, though a maximum amount of between $50,000 and $100,000 is not uncommon. The maximum amount a lender will allow you to borrow may also depend on factors such as your credit score or credit rating, your income and expense, or what you use as security for the loan.

How much could a personal loan cost you?

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Calculate what your repayments could be on your personal loan.

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How quickly can I repay a personal loan?

Personal loan terms can vary anywhere from six months to ten years, with many lasting between 12 and 60 months. 

Choosing a longer loan term means smaller monthly repayments, giving your budget some relief. However, the longer you take to pay off a personal loan, the more interest you’ll pay on the loan overall. The reverse is also true – a shorter personal loan term will likely cost you more from month to month, but you’ll be charged less total interest on the loan. 

You can use a Personal Loan Calculator to work out how your choice of loan term may affect your personal loan repayments, and whether a shorter or longer personal loan term may better suit your personal financial needs.

Can your credit score affect your personal loan?

As with most financial products, when it comes to taking out a personal loan, your credit score can affect your borrowing power, choice of lenders and the rates available to you.

If you have an excellent credit history, there will typically be more lenders who are inclined to lend you money. This is because borrowers with excellent credit scores have a history of responsible credit behaviour and are thus less of a risk to the lender than those with bad credit scores.

Similarly, an excellent credit score can often unlock more competitive interest rates and more flexibility in terms of the loan amount you may be approved for.

Keep in mind, however, that there are a number of other factors that contribute to the success of a personal loan application. Consider the eligibility criteria of each individual product before applying.

Borrowers with bad credit may still be able to find a personal loan product that works for them. It’s also worth thinking about the steps you can take to improve your credit score, such as working on existing debts and building your savings.

Does repaying your personal loan improve your credit score?

Thanks to Comprehensive Credit Reporting (CCR), both positive and negative credit events are recorded in your credit history to help generate your credit score. Consistently making your personal loan repayments on time could help you build up a good credit score over time.

However, if your personal loan is your only form of credit, paying it off in full could potentially lead to a dip in your credit score, as it will no longer be an active part of your credit history. That said, you may find that the benefits of clearing your personal loan debt outweigh any potential short term dips to your credit score.

If you improve your credit score, will your personal loan repayments be lower?

Improving your credit score won’t automatically lower the repayments on any outstanding personal loans you may have. However, if you were to apply for another loan, including refinancing your current personal loan, your improved credit score may help you to qualify for a lower personal loan interest rate, which could help to lower your repayments.

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How do you apply for a personal loan?

  1. Check your credit score: Knowing what your credit score is can help give you a better understanding of which loan products and interest rates might be available to you. You can visit RateCity’s credit score hub to access your score within minutes.
  2. Assess your budget: Consider using RateCity’s personal loan calculator to get an estimate of your loan repayments and ensure they’ll fit comfortably within your budget. This could help you make an informed decision on how much you can afford to borrow and increase your chances of approval.
  3. Search and compare: RateCity’s comparison tables allow you to easily compare personal loans from a wide range of lenders, so you can find one that best suits your individual needs.
  4. Check the lending criteria: Once you have compiled a shortlist of your preferred personal loan products, check to see whether you meet all of the eligibility requirements in order to avoid having your application rejected. You will often need to provide information on your income and expenses, as well as proof of age, identity, and proof that you're an Australian citizen or permanent resident. 
  5. Prepare your application: When you’ve decided on a personal loan that best suits your needs, it’s time to complete your application. Depending on the lender, you may have the option to submit your application online or at a local branch. It’s a good idea to have all of your required documentation ready before you get started.
  6. Submit your application and await a decision: After submitting the information required, it’s time to await a response from the lender.

How can I find and compare personal loans on RateCity?

To take the hassle out of shopping for a personal loan, RateCity has a number of tools that may be useful to you:

Personal loan comparison table

A personal loan comparison table, like the one on this page, can be a helpful tool when narrowing down your options. You can search by loan amount and loan term and use the filters to find products that may be more suited to your needs.

Personal loan calculator

RateCity’s personal loan calculator can give you an estimate of how much your personal loan repayments may cost based on the amount you’d like to borrow, your preferred loan term and interest rate. The repayment calculator can also provide you with an estimate of the total interest payable and total amount payable based on weekly, fortnightly or monthly repayments.

Real Time Ratings™

Real Time Ratings™ is a system that ranks personal loans based on your own individual requirements. It gives each personal loan a score out of five stars, based on loan costs and flexibility, in real time as you use the site.

For information specific to your personal financial situation, consider reaching out to a personal loan broker or financial adviser.

Find personal loans from over 100+ lenders

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.

Where can I get a personal loan?

The Australian personal loans market contains dozens of lenders offering several hundred different products. Personal loans are available through a range of institutions, including:

There are three main ways to access personal loans. You can go through a comparison website, such as RateCity. You can use a finance broker. Or you can directly contact the lender.

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.

How are personal loans regulated?

Personal lenders in Australia are regulated by ASIC (the Australian Securities & Investments Commission) and must follow responsible lending rules. That means they can’t lend money without making “reasonable inquiries” about a borrower’s financial situation and ensuring the loan is “not unsuitable” for them.

What are the pros and cons of personal loans?

The advantages of personal loans are that they’re easier to obtain than mortgages and usually have lower interest rates than credit cards.

One disadvantage with personal loans is that you have to go through a formal application process, unlike when you borrow money on your credit card. Another disadvantage is that you’ll be charged a higher interest rate than if you borrowed the money as part of a mortgage.

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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