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Personal loan interest rates: January 2022

By Peter Marshall ·

It was a turbulent end to the year for personal loan interest rates with a variety of lenders making changes to both secured and unsecured rates, with some increasing rates while others offered further discounts. 

With the potential of the RBA increasing its official cash rate sometime this year, we may see more interest rates rise so it could be a good time to look at fixing if you’re looking at getting a personal loan in the first few months of 2022.  

Risk-based pricing continues its trend, with a large number of lenders now offering discounted interest rates to customers with excellent credit scores. 

Over the last year we also saw an increase in low rate ‘green’ loan products offered by personal loan lenders, which we expect to continue as more people turn to more ethical and environmental options whether it’s home solar panels or an electric vehicle.

The top personal loan interest rates in the Mozo database have remained unchanged from December. 

- Community First Credit Union offers the lowest variable rate unsecured personal loan rate with both its Green Loan and Home Improvement Loan at 3.99% p.a. (4.99% p.a. comparison rate*). 

- Online lender Alex Bank has the most competitive unsecured fixed rate option with its Personal Loan starting at 4.99% p.a. (4.99% p.a. comparison rate*). 

- Transport Mutual Credit Union’s GreenRoad Hybrid & Electric Cars loan has the lowest secured variable rate at 4.74% p.a. (5.04% p.a. comparison rate*)

- Credit Union SA’s Online-Only Special Fixed Rate Personal Loan offers the lowest fixed rate at 4.25% p.a. (4.73% p.a. comparison rate*). 

Keen to see how interest rates across other banking products are looking in January? Then check out our January snapshots for Home Loan Interest Rates, Car Loan Interest Rates, Savings Accounts Interest Rates or Term Deposit Interest Rates.

Picture of Peter Marshall
Peter Marshall
Banking expert

Peter has been working in the Australian banking and finance industry for over 20 years and oversees Mozo’s extensive product database. He is regularly sought out for his expert commentary and analysis on banking and interest rates trends by print, radio and TV media.

Latest personal loan interest rates on Mozo - last updated 23 January 2022

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2022
    Personal Loan

    Unsecured, Fixed

    interest rate
    comparison rate
    Monthly repayment
    4.99% p.a.to 14.99% p.a.
    4.99% p.a.to 14.99% p.a.based on $30,000
    over 5 years

    Terms from 1 to 5 years. Representative example: a 5 year $30,000 loan at 4.99% would cost $33,959.97 including fees.

    Excellent credit score needed to obtain this rate. Enjoy no-fuss personal loans of up to $30,000 with Alex Bank. No hidden early repayment penalties. Terms from 6 months to 5 years. Convenient, 100% online approval. Must be over 18 to be eligible (other eligibility criteria may apply). Winner of Mozo's Experts Choice Best New Loan Product award 2021^.

    Compare
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    Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.35% p.a.to 19.09% p.a.
    6.14% p.a.to 19.99% p.a.based on $30,000
    over 5 years

    Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 5.35% would cost $34,832.61 including fees.

    Fast, easy and 100% online, this is a low cost loan with no ongoing fees or extra repayment penalties. It's perfect for savvy borrowers with great credit. If you’re over 18 and earn above $30,000, you could qualify (other eligibility criteria may apply).

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  • placeholder
    Home Improvement Loan

    Fixed, Unsecured

    interest rate
    comparison rate
    Monthly repayment
    5.75% p.a.
    5.96% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.75% would cost $34,840.18 including fees.

    Handypay offers flexible home improvement loans for Excellent Credit or better. Handypay is a specialist home improvement plan provider and offers loans up to $75,000.

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  • placeholder
    Mozo Experts Choice 2022
    No Fee Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.95% p.a.to 17.95% p.a.
    5.95% p.a.to 17.95% p.a.based on $30,000
    over 5 years

    Terms from 2 to 7 years. Representative example: a 5 year $30,000 loan at 5.95% would cost $34,757.21 including fees.

    Borrow up to $50,000 unsecured from the only lender with no fees and none of the bank. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Back to back winner of Mozo’s Experts Choice Unsecured Personal Loan Award, 2021 & 2022^.

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  • placeholder
    Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    6.49% p.a.to 20.95% p.a.
    6.49% p.a.to 20.95% p.a.based on $30,000
    over 5 years

    Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 6.49% would cost $35,210.64 including fees.

    Low personalised rates, ideal for borrowers with excellent credit. No monthly account fees, no early payout fees, so you can pay off your loan sooner. $0 establishment fee for loans from $5,000 to $30,000, a $595 establishment fee will be charged on loan amounts of $30,001 to $64,000. Offer valid to 31 Jan 2022.

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  • placeholder
    Standard Personal Loan

    Fixed, Unsecured

    interest rate
    comparison rate
    Monthly repayment
    7.99% p.a.
    8.62% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a n/a year $0 loan at 7.99% would cost $6,988.90 including fees.

    Heritage Bank discounted rates for borrowers with excellent credit. Available loans starting from $5,000 to $25,000. Your choice of loan terms up to five years. Extra repayments allowed, but may incur fees.

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    Secured Car Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    6.79% p.a.
    7.16% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 6.79% would cost $35,729.09 including fees.

    Reach your goal sooner without being penalised with $0 early payout fee. $0 monthly fees. Choose to make either monthly, fortnightly or weekly repayments to suit your income and budget. Winners of Australia's Best Large Credit Union in 2020.

    Compare
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    Personal Loan

    Fixed, Secured

    interest rate
    comparison rate
    Monthly repayment
    5.99% p.a.to 21.99% p.a.
    7.26% p.a.to 23.15% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.99% would cost $35,820.67 including fees.

    Check your personal loan rate in under 3 mins with no impact to your credit score. Borrow from $3,000 with flexible repayment options. Apply for your loan in 10 minutes and get a response in 60 seconds. Extra repayments allowed.

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    Go to site
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    Personal Loan

    Fixed, Unsecured

    interest rate
    comparison rate
    Monthly repayment
    6.99% p.a.to 18.99% p.a.
    7.91% p.a.to 19.83% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 6.99% would cost $36,383.67 including fees.

    Borrow from $5,000 to $55,000 with a 1 - 7 year flexible loan term with NAB. Get competitive low rates for excellent credit. Enjoy no fees for extra repayments and no early exit fees. NAB accepts documents online so you can get your funds fast.

    Compare
    Go to site
    Details
  • placeholder
    Green Loan

    interest rate
    comparison rate
    Monthly repayment
    5.79% p.a.
    6.36% p.a.based on $30,000
    over 5 years

    Terms from 1 to 10 years. Representative example: a 5 year $30,000 loan at 5.79% would cost $34,873.55 including fees.

    Handypay offer flexible green loans up to $75,000 for Excellent Credit or better. Handypay is a specialist home improvement plan provider.

    Compare
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    Details
  • placeholder
    Unsecured Personal Loan

    Tier 1 Credit, Fixed

    interest rate
    comparison rate
    Monthly repayment
    6.45% p.a.to 10.99% p.a.
    6.45% p.a.to 11.71% p.a.based on $10,000
    over 3 years

    Terms from 2 to 5 years. Representative example: a 3 year $10,000 loan at 6.45% would cost $11,025.45 including fees.

    Be rewarded for your good credit history with low rates. No ongoing fees. Pay off your loan with no early repayment penalties. Apply online and get a quote in minutes

    Compare
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    Details
  • placeholder
    Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    9.39% p.a.
    9.64% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 9.39% would cost $37,881.66 including fees.

    Borrow from $5,000 to $50,000 with low rates for great credit. No account keeping fees. Free extra repayments and redraw facility. Same day approval may be possible. Winner of Mozo's Experts Choice Award for Australia's Best Large Credit Union 2021^.

    Compare
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  • placeholder
    Unsecured Personal Loan

    Variable

    interest rate
    comparison rate
    Monthly repayment
    11.89% p.a.
    12.15% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 11.89% would cost $40,115.02 including fees.

    Compare
    Go to site
    Details
  • placeholder
    Personal Loan

    Fixed, Unsecured

    interest rate
    comparison rate
    Monthly repayment
    7.99% p.a.to 22.99% p.a.
    9.24% p.a.to 24.15% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 7.99% would cost $37,518.90 including fees.

    Check your personal loan rate in under 3 mins with no impact to your credit score. Borrow from $3,000 with flexible repayment options. Apply for your loan in 10 minutes and get a response in 60 seconds. Extra repayments allowed.

    Compare
    Go to site
    Details
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Personal loan interest rates resources

Reviews, news, tips and guides to help find the best personal loan for you.

FAQ

How are personal loan interest rates calculated? 

Personal loan lenders set their own interest rates on their products; however, they're influenced by the official cash rate set by the Reserve Bank of Australia (RBA). 

After its monthly meeting, the RBA will announce whether they have made changes to the official cash rate. This could be increasing, decreasing or keeping it the same. There are a number of things that influence the shift of the rate, including spending and employment stats, as well as inflation and economic growth. In order to slow borrowing, economic activity and inflation, the RBA will make the rate higher. Alternatively, however, if they want to stimulate these things, they will lower it. 

Generally speaking, Australian lenders adjust interest rates after the RBA makes its announcement.

What types of personal loan interest rates are there? 

There are two types of personal loan interest rates: variable or fixed. The rate can influence how much your repayments are and ultimately how much the loan will cost you overall. Plus, there is also the comparison rate to be aware of, which encompasses not only the headline rate but also fees.

Read on for a deeper look into how each type of interest rate works. 

Variable rates:

One option when choosing a personal loan is a variable rate. This type of rate can change over the life of the loan and move up or down as the market moves. Where variable rates are handy is if rates are slashed, as you’ll end up paying less in interest than when you took out the loan. But it can also work in the opposite way. If rates are hiked up, you’ll face a larger interest repayment than you did before. 

The bonus of a variable personal loan is that you are unlikely to be charged an early repayment penalty if you pay off your loan ahead of schedule. So a variable option may be right for you if you are okay with potential changes to your rate and plan to make additional repayments.  

Fixed rates:

Alternatively, you could go for a fixed rate instead. This is where you get the same interest rate over the whole duration of the loan. So, if you are consistent with your regular repayments, you’ll end up paying the same amount each week, fortnight or month. 

The benefit here is that if interest rates are increased, your loan won’t be affected as you’ve locked in your rate. On the other hand, it also means that if rates go down, yours won’t change either. And it’s also important to note that, unlike variable rate personal loans, lenders are more likely to charge an early repayment fee on fixed options.  

What is a comparison rate?

When weighing up different personal loan options, it’s crucial to consider the comparison rate. Unlike the headline rate, it combines both the interest and fees you will pay as well. 


In accordance with the National Credit Code, it is a requirement that Aussie lenders advertise comparison rates on their products. This is because it is a more accurate representation of what the loan might actually cost rather than the headline rate alone. In most cases, the comparison rate is higher as the addition of fees and charges on the loan make it more costly to the customer. So it’s important that when looking at potential personal loan products, you ensure the headline rate and comparison rate aren’t significantly different. Because if they are, it means you’ll likely face a number of hefty costs on the loan. 

Want a hand to start comparing? Check out the Mozo personal loan comparison calculator

Online lenders vs banks: how do their interest rates compare? 

When it comes to online lenders versus banks, there’s not much difference in interest rates. Instead, you should consider the way you plan to manage your loan and what your preferences are. 

On the one hand, if you like traditional forms of banking, including the option to head to your local branch, choosing a personal loan from a bank may be better for you. However, if you don’t mind managing your loan online, weigh up both banks and digital lenders to see who offers the most competitive rates. 

How does my credit score affect the interest rate of my personal loan? 

More and more Australian personal loan lenders are offering customers customised interest rates based on their credit score. This is called risk-based pricing, where interest rates are determined in accordance with how likely a lender thinks the borrower is to default on their loan. 


How do you know if a loan offers risk-based pricing? Well, instead of advertising one rate, they’ll be a minimum and maximum rate on offer. Based on a customer’s credit history, a lender is able to offer a rate that sits anywhere between the two numbers advertised. So, to put it simply, those with excellent credit will receive a low rate, and those with poor credit will receive a high rate. 

While this type of pricing model may sound like it only benefits those with a good credit score, it actually opens up more opportunities for those with bad credit, too. As in some cases, lenders that don’t have risk-based pricing may deny them the loan altogether. 

How can I get the best interest rate on a personal loan? 

There’s a range of different things to consider when choosing the best personal loan interest rate for you, along with a number of lenders to weigh up. So make sure you shop around and read the fine print so that the loan you sign up for fits in your budget. 

A great starting point is right here at Mozo! We have a range of handy tools to help you: 

Plus, if you are after more on loan products in general, you can check out our loans page or more interest rate guides.

Picture of Peter Marshall
Peter Marshall
Banking expert

Peter Marshall has been working in the Australian banking and finance industry for over 20 years and oversees Mozo’s extensive product database. He is regularly sought out for his expert commentary and analysis on banking and interest rates trends by print, radio and TV media.

FAQs about personal loan interest rates

Should I choose a personal loan with a fixed or variable rate? 

There is no right or wrong choice when it comes to decking between a fixed or variable rate. Consider your financial situation and figure out what you think will suit it best. Refer to the breakdown of variable and fixed rates above for more information. 

How are personal loan repayments calculated?

A number of things affect how your personal loan repayment is calculated. These include the interest rate you receive, your repayment schedule (weekly, fortnightly or monthly) and the length of your loan. 

Simply put, your repayment is made up of two parts: your principal, which is what you borrowed, and interest, which is what the bank charges for lending you the money. Initially, a larger amount of your repayment goes towards paying interest but as your principal lessens the amount of interest you pay reduces. So as your loan comes to an end, most of your repayment goes towards the principal amount, not interest. 

For the specifics on how much your interest might be on a personal loan you’re considering, take a look at our personal loan repayments calculator

What are some personal loan features? 

While finding a personal loan with a killer interest rate should be one of your top priorities, another thing to compare are the features. These often help with making repayments more flexible and can sometimes assist you pay down your loan sooner. 

Some include: 

  • Free extra repayments 

  • Redraw facility 

  • Weekly, fortnightly and/or monthly repayment schedule options

  • Variety of loan terms   

But keep in mind, try to keep your fees low. Don’t end up coughing up too much for things like application fees, monthly fees, exit fees or early repayment fees. 

Are personal loan rates negotiable? 

It’s important to remember that when looking around for a personal loan, you may be able to negotiate with a lender on what they are initially offering. While they don’t promote the fact that rates are negotiable, it may be worth asking, especially if you’ve seen a more competitive product with another lender. 

Ultimately, lenders want your business. So they may be open to taking a small decrease in your interest repayments to ensure they don’t lose you as a customer. 

How can I reduce the amount of interest I pay on a personal loan? 

The aim when taking out a personal loan is to pay as little interest as possible. Other than locking in a competitive rate, there are also other tricks to keeping your interest repayments to a minimum. 

  • Make extra repayments where you can to reduce your principal and interest you pay. 

  • Choose a shorter term to reduce the length of time you pay interest. 

  • If you don’t need a loan straight away, make moves to improve your credit score so you can receive a lower rate on your loan.