Low Rate Personal Loan

With so many personal loans to choose from it can be a daunting task to find the personal loan that meets your needs and offers a low rate. The table below features a selection of the best low rate personal loans, all of which offer rates below 15% p.a., with some secured loan options offering rates in the 8% p.a. range. Plus our loan repayment calculator will help you calculate what the monthly repayments would be for your loan, for each of these low rate loans. Simply enter your loan amount and preferred loan term, then click on the “monthly repayment" column header to rank the results and compare the personal loan options relative to the estimated monthly repayment.

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  • Repayment Frequency to suit you - Repayments to suit when you get paid (weekly, fortnightly or monthly) as long as you pay your loan back within 1 to 7 years
  • Make extra repayments to repay your loan faster - If you choose a term greater than 2 years, and pay it out in less than 2 years, there is a prepayment fee of $175. 
  • Borrow between $4,000 and $50,000 - for a range of personal uses 
  • Terms between 1 to 7 years

  • Repayment Frequency to suit you - Repayments to suit when you get paid (weekly, fortnightly or monthly) as long as you pay your loan back within 1 to 7 years
  • Make extra repayments to repay your loan faster - If you choose a term greater than 2 years, and pay it out in less than 2 years, there is a prepayment fee of $175. 
  • Borrow between $4,000 and $50,000 - for a range of personal uses 
  • Terms between 1 to 7 years

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Low Rate Personal Loan Comparison

Understandably you will be looking to attain the lowest possible rate on your personal loan and minimize the interest costs you will be charged, but a sole focus on the interest rate will generally not lead you to the personal loan which is going to be the best for you in the long run.

A good first step when commencing your search for the best low rate personal loan is to establish what personal loan type is going to work for you, so let's take a look at the options:

 

  1. Secured Personal Loan

In the table above the personal loans featuring the lowest rates are without exception Secured Personal Loans, with rates generally below 10% p.a. The key reason why these secured personal loans have the lowest rates is that the asset you are purchasing with the loan is used as security by the lender, in case you default on the loan. By securing the loan against an asset the lender has reduced the risk they are taking which translates to the lower interest rate on the loan.

The most popular use for a secured personal loan is the purchase of a vehicle, be it a car, motorcycle or caravan, though they can be used for a variety of purposes so long as the lender will accept the asset you are purchasing as security.

 

  1. Unsecured Personal Loan

Unsecured personal loans will generally feature interest rates that are higher than those offered on a secured loan, in the table above you will find low rate unsecured personal loans offering rates in the 8-15 % p.a. range.  These higher rates are driven by the fact that the lender does not require you to use an asset as security when taking out an unsecured personal loan, this lack of security translates into higher risk for the lender, that results in the rates on these loans being priced higher.

Although the rates on unsecured personal loans are generally higher than secured personal loans there are exceptions to this as recently the unsecured personal loan sector has been shaken up by the emergence of a number of online only lenders who are offering rates on unsecured personal oans, which are close to the levels of secured personal loans. They are able to offer these low rates as they have much lower costs than the traditional personal loan providers who have branch networks and massive infrastructure to support, plus they are keeping their risk levels in check by only accepting personal loan applications from applicants with excellent credit ratings.

 

  1. Debt consolidation loans

Many personal loan providers will accept applications for the purpose of debt consolidation, though the loan type will have to be unsecured.

By moving all of your debts into one low rate unsecured personal loan you may be able to save on interest charges and better manage your repayments, as you will only have one repayment to make each month.

 

Selecting the Best Low Rate Personal Loan

Once you have established the type of loan which best suits your circumstances it’s now time to dive into the detail to compare the low rate personal loans which are competitively priced, you are eligible for and include the features that will be useful to you.

 

How to access the costs of a low rate personal loan.

  • Comparison Rate - This rate represents the interest rate of the loan when the minimum rate is combined with the upfront fees associated with the loan, such as any application fee. When making a comparison of these rates it is important to check that the comparison rates have been calculated on alike for like basis, so for example for a loan of $10,000 over 3 years.
  • Variable Rate vs. Fixed rate - Most personal loans offer the option of a variable or fixed interest rate. The variable option will be lower rate than the fixed option and the rate may fluctuate across the term of the loan, at the discretion of the lender. If you choose a fixed rate loan you are assured that the rate will not move for the period of the loan and so your repayments will remain constant for the full loan term.
  • Extra Repayments - This handy feature enables you to make extra repayments above your standard repayment, and so reduce your interest charges on your loan. This feature may attract a fee, though generally this fee will be more than covered by any interest savings, generated by the extra repayments.
  • Redraw Facility - If you manage to make some extra repayments but then find yourself in the needs of some funds, this facility allows you to access the amount of any extra repayments you have made.

 

Applying for a low rate personal loan on line

The eligibility criteria for personal loans differs slightly by provider, though generally you will need to be able to answer yes to the following 4 statements:

  • I am over 18 years of age
  • I am a permanent resident of Australia or an Australian Citizen (Temporary resident personal loans do exist)
  • I have a good credit rating
  • I have an email address

 

To make an application for a personal loan you will be required to provide arrange of information which will generally include:

  • Personal details including your name & contact information
  • Proof of identification - Passport, drivers license or medicare card
  • Name and contact details for your employer.
  • Details of your employment - is it full or part time and what is your annual salary
  • Financial details - to include details of your assets, liabilities, and any other credit accounts
  • If you are applying for a secured loan - details of the asset which the loan will be secured against

Frequently Asked Questions

Secured Personal vs Unsecured Personal Loan

The primary difference between unsecured personal loans and secured personal loans is that unsecured loans do not require any form of collateral to be offered as security on the loan, whilst a secured personal loan requires that an asset be offered as security against the loan, which in the event that you fail to repay the loan, can be seized to cover the lenders costs and losses. In return for proving the security the interest rates on secured personal loans tend to be lower than those offered on unsecured personal loans. We have developed this comprehensive guide to Secured vs Unsecured Personal Loans 

How does Peer to Peer lending work?

Peer to peer lending involves borrowing money from an alternative source than the traditional lenders such as a banks, building societies or credit unions. Peer to Peer lending can be used by individuals or companies that are looking to apply for a personal loan or business loan.

The money which is lent by the Peer to Peer lenders comes from investors, who can be individuals or companies.

People who invest through this type of lending are buying a financial product, typically a managed investment product; while borrowers are taking out a loan that is repaid over time, with interest. We have compiled a selection of the P2P loans available for comparison

What is Peer to Peer lending?

Peer-to-peer lending, which is often abbreviated to P2P lending, is the practice of lending money to individuals or businesses through an online platform that match lenders directly with borrowers. P2P lenders operating in Australia include SocietyOne and RateSetter