Welcome to RateCity's Personal Loans section
Australians from all walks of life can sometimes need a financial helping hand. Whether it’s paying for education, starting a business, or splurging on a dream wedding, holiday or car, a little help from a personal loan can sometimes be just what an Australian needs to make their dream a reality.
At RateCity, you can not only look at the interest rates on a range of personal loan options side by side, but you can also compare their other features and benefits in order to make a more informed decision when selecting a lender that suits your financial situation.
Where to start when comparing personal loans
When you’re thinking of taking out a personal loan, whatever your reason, it’s worth considering exactly how much money you want to borrow, and how much time you want to pay it back. Personal loans with shorter terms can often be paid off more quickly, though your monthly repayments are more likely to be higher as a result. On the other hand, longer loan terms can help keep your monthly repayments more manageable, but you’ll likely end up paying more in total interest over the loan’s lifetime.
What is your personal loan for?
Do you need extra cash in order to buy a car? A personal loan from an Australian lender could certainly help you afford the vehicle you’ve had your eye on, though many Australian lenders offer car loans with terms and conditions specifically for keeping car finance manageable and affordable.
If you’re taking out a personal loan to consolidate your debts from multiple lenders into a single easy-to-manage repayment each month, remember that not every lender offers personal loans for debt consolidation – check the terms and conditions first.
All about interest rates
The interest rate is the percentage extra you’ll need to pay back to your Australian lender with each loan repayment. To find the best personal loans for you, searching for the lowest interest rates is usually a good place to start.
You should also decide whether a variable or fixed interest rate on your personal loan will best suit your financial situation.
If you’d prefer to keep your personal loan repayments stable from month to month for ease of budgeting, consider a fixed rate personal loan. By agreeing to pay a fixed amount of interest with each repayment over the lifetime of the loan, you can be confident that each month will bring you one step closer to getting your personal loan fully paid off, with no risk of repayments increasing due to interest rate rises. However, selecting this option could also mean missing out on savings in the event of interest rate cuts.
The interest on a variable rate personal loan could rise or fall depending on your lender, bringing your repayments up or down with it. While this could have you potentially saving some money if rates fall, you could also find yourself coming up short if the rates rise. Variable rate personal loans also tend to have more flexible payment terms than many fixed rate loans, providing you with more options for managing your finances.
Of course, you won’t just be paying interest to your lender - there are often other assorted fees and charges as well. An Australian personal loan with a low interest rate that charges high fees may ultimately turn out more expensive than a personal loan with a higher interest rate and lower fees.
To give you a better idea of a personal loan’s total cost, check out its Comparison Rate, which combines its interest rate and standard charges into a single percentage.
Remember though that a loan’s Comparison Rate may not take its nonstandard fees and other costs into account, nor does it include any extra features or benefits that could help you further narrow down your shortlist of potential personal loan options.
Extra repayment/early exit penalties
One way to get your personal loan fully paid off sooner and to ultimately pay less in total interest over its lifetime is to make extra repayments when you have some money available, such as if you get a tax refund, or if a rate cut leaves you with some extra cash left over in your budget.
However, some Australian lenders would prefer that you stick to the agreed-upon repayment plan, and charge fees for exiting the loan early. These fees tend to be more common for fixed rate personal loans with prearranged repayment plans, though they are sometimes also found on variable rate personal loan offers too. Make sure getting out of debt early doesn’t end up costing you more than you expected.
Secured/Unsecured Personal Loans
Do you own a car, a property, or some other valuable asset, and are you looking to save on a personal loan? By putting your asset up as collateral for a secured personal loan, you may be able to enjoy a lower interest rate, as there’s less risk involved for the lender – if you default on your repayments, they’ll simply make up for it by seizing your asset.
Unsecured personal loans require no additional security, making them a viable option for borrowers who don’t have a valuable asset available, though these loans tend to have higher interest rates due to the higher risk to Australian lenders.
While making extra repayments onto your Australian personal loan is all well and good, sometimes a financial emergency leaves you wishing you could put some of these extra payments back into your pocket.
If you choose a personal loan that offers a redraw facility, when you’re ahead on your personal loan repayments, you’ll have the option to withdraw the surplus funds if required, subject to your lender’s terms and conditions. This can allow your extra cash to help you get closer to paying off your personal loan ahead of schedule, while still remaining accessible if you really need it.
Don’t have much in the way of savings available to go towards a deposit for your personal loan? It doesn’t mean you’re limited to borrowing a smaller sum – some Australian lenders offer personal loans with a higher than average Loan to Value Ratio (LVR), where you pay a smaller deposit and borrow more money, paying it back at a higher interest rate. Some lenders also offer 100% loans, where you borrow the full amount and pay no deposit. But because these loan options usually represent greater risk to lenders, you’ll often find yourself paying a higher interest rate as a result.
Compare Australian Personal Loans
You know what you want from your personal loan. All you need to do now is find the Australian lender who’s offering the personal loan that matches up with what you need.
Look through the selection of personal loans in Australia at RateCity and discover the ideal offer to help you turn your dreams into reality.