Search and compare green personal loans

A green personal loan is a type of credit product similar to a standard personal loan. It allows you to borrow a sum of money for a specific purpose, with the repayment, including interest, scheduled over a defined period. The distinction lies in its focus on funding environmentally friendly initiatives or purchases, aligning with your eco-conscious choices. 

While standard personal loans can be used for a wide range of different purposes, green personal loans are to be used specifically for the purchase of environmentally friendly products. 

Green loans are typically offered to borrowers looking to purchase and/or install eligible energy-efficient products for their home. These personal loans often have more competitive interest rates than standard personal loans as an incentive for borrowers to make ‘green’ choices. 

Plenty of Australian lenders allow borrowers to take out green personal loans to fund the cost of a broad selection of eco-friendly home improvement projects and products, including:

• Solar hot water systems, rooftop solar panels and battery storage systems
• Energy efficient white goods and appliances that meet a minimum star rating
• Grey water treatment systems
• Rainwater tanks
• Double glazing
• External awnings
• Reverse cycle or zoned air conditioners and energy efficient electric heaters that meet a minimum star rating
• LED lighting

Investing in these sorts of purchases not only has the potential to offer environmental benefits, but it could also save you money on your electricity bills and potentially add value to your property.

Plus, lenders typically offer green personal loans with lower rates than standard personal loans to reward borrowers for 'going green'.

Green home loan

One alternative to a green personal loan is a green home loan which is available to borrowers who are looking to buy an energy efficient property. This may be an option for those yet to purchase a property, or those looking to refinance in order to make environmentally friendly home improvements.

Green car loan

Another type of green personal loan is a green car loan, which is a type of car financing specifically for eco-friendly vehicles such as electric or hybrid vehicles, or those that produce less carbon dioxide emissions than traditional fuel-powered cars.

As long as an applicant's loan purpose meets the specific lending criteria for a green personal loan, the eligibility requirements are generally consistent with a standard personal loan, requiring the borrower to:

• Be 18 years of age or older
• Be an Australian citizen or permanent resident
• Earn a regular income

Some lenders may also require borrowers to meet a minimum credit score. Eligibility requirements can differ between lenders, so it might be worth reaching out to your preferred credit provider for more information.

By opting for green loans to fund eco-friendly initiatives like installing solar panels or making energy-efficient upgrades, you can enjoy both environmental and financial advantages. From an environmental standpoint, embracing these eco-friendly improvements could help lower your carbon footprint, contributing positively to the environment. 

On the financial front, the use of energy-efficient appliances and the integration of renewable energy sources could lead to substantial reductions in your energy bills. Additionally, many lenders incentivise environmentally conscious choices by offering lower interest rates or extra discounts, specifically for green loans. This not only supports sustainable initiatives but also enables you to save money over the life of the loan. 

Making a comprehensive comparison of your green personal loan options is much the same as a standard personal loan comparison. Here are some of the most important features to consider when shopping for your best fit:

Loan amount - Personal loans are paid out in a fixed amount, so it's important to have a solid idea of how much your purchase or project will cost and determine the loan amount before you apply.

Interest rates - The loan's interest rate will determine how much you pay in interest. You'll need to choose between a fixed rate that stays the same throughout the loan, or a variable rate that can fluctuate with the market. Just remember that if a low rate loan has high fees, it may not be the most competitive option.

Comparison rates - Comparison rates can give you a better idea of which loans may be the most competitive, as they include the loan's interest rate plus the main fees attached.

Loan term - The loan term is the amount of time you have to pay back your loan. Personal loan terms are commonly three to five years long, but shorter and longer terms are typically also available. Keep in mind that as a general rule of thumb, the longer the loan term, the cheaper the loan repayments - but the more interest you will likely pay over the life of the loan. Shorter loan terms may have more expensive repayments, but you'll likely pay less in total interest.

Extra features - Some lenders may offer extra features that could be important to you, such as:

• Unlimited extra repayments so you have the option to pay down the loan faster
• A redraw facility so that you are able to redraw any additional repayments you have made
• Flexible repayment options such as the option to make weekly, fortnightly or monthly repayments

Fees - The kinds of fees you may be charged tend to differ from one lender to the next, but often include:

• Application fees
• Establishment fees
• Extra repayment fees
• Early repayment fees
• Redraw fees
• Other ongoing fees

Yes, your credit score can impact your eligibility for a green personal loan. Lenders typically use your credit score to assess your creditworthiness, or how likely you are to repay a loan. Consequently, your credit score may not only influence your available loan options but also the interest rate you may qualify for. 

A higher credit score often enhances your chances of approval and may result in more favourable loan terms. On the other hand, if your credit score is low, you may find it challenging to get approved for a personal loan or may only qualify for loans with higher interest rates. 

It's advisable to check your credit score before applying for a green personal loan (or any other financial product) and take steps to improve it if needed. But remember that while your credit score is important, other factors also impact your loan application. Thoroughly review the eligibility criteria of a product before applying for a loan.