Low Rate Personal Loans

If getting the lowest interest rate possible is a high priority comparing loans from a variety of lenders is important. Mozo has been tracking personal loan interest rates since 2008 and we're here to help you. Start by using our comparison tool below to calculate your estimated repayments for terms available.

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low interest personal loans

Low interest personal loan comparisons on Mozo - last updated 13 June 2024

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    6.75% p.a.to 26.95% p.a.
    6.75% p.a.to 26.95% p.a.based on $30,000
    over 5 years

    Borrow up to $50,000 unsecured. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Multi-year winner of Mozo’s Experts Choice Unsecured Personal Loan Award, 2021, 2022, 2023 & 2024^'

    Repayment terms from 2 years to 7 years. Representative example: a 5 year $30,000 loan at 6.75% would cost $35,430.23 including fees.

    Compare
    Details
  • Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.76% p.a.to 24.03% p.a.
    6.55% p.a.to 24.98% p.a.based on $30,000
    over 5 years

    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).

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 5.76% would cost $35,173.52 including fees.

    Compare
    Details
  • Express Personal Loan

    Secured

    interest rate
    comparison rate
    Monthly repayment
    14.95% p.a.to 27.95% p.a.
    29.30% p.a.to 42.8% p.a.based on $10,000
    over 3 years

    Access fast finance on loans from $3,000 to $25,000 with a Jacaranda Finance Personal Loan. Terms from 25-48 months. Check if you qualify with no impact on your credit score. Enjoy a speedy, online approval.

    Repayment terms from 2 years to 4 years. Representative example: a 3 year $10,000 loan at 14.95% would cost $14,324.71 including fees.

    Compare
    Details
  • Debt Consolidation Loan

    interest rate
    comparison rate
    Monthly repayment
    5.76% p.a.to 24.03% p.a.
    6.57% p.a.to 24.99% p.a.based on $30,000
    over 5 years

    Roll multiple debts into one loan to streamline your finances with one set of repayments and one interest rate. Competitive fixed interest rates with no monthly or early repayment fees and flexible repayment options. Easy online application and funding in as little as 24 hours (subject to approval).

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 5.76% would cost $35,173.52 including fees.

    Compare
    Details
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^See information about the Mozo Experts Choice Personal loans Awards

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Comparing low interest loan options

A “low-rate personal loan” generally refers to a personal loan with an interest rate below the average rate. As per the Mozo database, the current average interest rate for an unsecured personal loan (as of 29 April 2024) is 10.41% p.a., whereas the best rate sits at 5.49% p.a. As for secured loans, the current average rate is 9.11% p.a., while the best rate in the Mozo database also sits at 5.49% p.a.

As you can see, there’s quite a jump between the average personal loan interest rates and the best rates in the Mozo database. Unfortunately, not all lenders offer these competitive rates, so it’s important to shop around and compare personal loans to ensure you’re getting a good deal.

Qualifying for low rate personal loans

To determine whether you’re eligible for a low rate personal loan, lenders will typically assess your credit score, income stability, whether you have any existing debt and your overall financial situation. 

The better your credit report and current financial situation are, the greater your chance of getting a lower personal loan interest rate will be.

Fixed vs variable loans for lowest rates?

When taking out a personal loan, you’ll need to decide whether you want a fixed or variable interest rate. But which option will get you the lowest rate? Well, it depends.

Fixed rate personal loans:

With a fixed rate loan, you lock in an interest rate (usually for the duration of the loan), which means your repayment amount will stay the same for the life of the loan, making them easier to budget for. The trade-off for this sense of certainty is generally higher interest rates.

Variable rate personal loans:

Alternatively, you might choose to opt for a variable rate loan. With variable rate loans, your interest rate could change at any time as they fluctuate with the market. The flip side of this lack of certainty is that variable rates are typically lower than fixed rates.

Pros

Cons

Fixed rate personal loan

Predictable repayments

Typically higher rates

Variable rate personal loan

Potentially lower rates

Rate and repayment amounts can change at any time

Ultimately, the type of rate you choose will depend on your current financial situation. If you’d prefer the certainty of knowing that your regular repayments won’t change, then you might consider a fixed rate. 

If you’ve got a little more buffer room in your budget to cover any potential rate rises and would rather take a risk for a lower interest rate, then you might opt for a variable rate. 

Comparing low interest loans

As you can see, there are many other features to consider when choosing a personal loan beyond just the interest rate. 

Having a low interest rate is great, but it doesn’t necessarily mean it will be the cheapest loan option. You might find a low-interest-rate loan, but is it really worth it if you end up paying back the difference in fees?

Example: 

Using Mozo’s personal loans comparison calculator, we compared two personal loan options for a $10,000 loan paid back over 3 years.

Ongoing interest rate p.a.

Repayment frequency

Upfront fee

Ongoing monthly fee

Monthly repayments

Total interest & fees paid

Loan option 1

6.54% p.a.

Monthly

$310

$0

$307

$1,347

Loan option 2

6.75% p.a.

Monthly

$0

$0

$308

$1,075

Difference:

$272

As you can see, despite the first option having a lower ongoing interest rate than the second option, it’ll cost $272 more in the long run due to the $310 upfront fee. 

This is a clear example of why it’s always important to crunch the numbers and compare to see which option will suit you best. It also shows that there are lots of other features to consider when choosing a loan. 

Here are some of the other important factors to look out for when comparing low rate personal loans:

  • Fees

  • Flexible repayment options 

  • Free extra repayments

  • A redraw facility

  • Ability to pay the loan off early without penalty

Factors that determine your loan interest rate

There are a number of different factors that will determine the interest rate you get when taking out a personal loan, including:

Existing debts:

If you have existing debt, the lender might see you as more of a risk and be less likely to approve your loan – and if they do approve you, you could wind up with a higher interest rate.

Credit score:

Most lenders offer different interest rate tiers depending on your credit score. This can mean that the better your credit score is, the better the interest rate you receive could be. By the same token, it also means that the worse your credit score is, the higher the interest rate could be. 

So, if your credit score is a little worse for wear, then you’re probably better off working towards repairing your credit score before applying for a loan.

Proof of income:

When applying for a loan, you generally need to provide proof of consistent income. As you’d expect, the higher your income and the more consistent it is, the more likely you’ll be offered a lower interest rate.

Low rate personal loan risks

While low rate personal loans can draw people in due to their potentially lower interest charges – they could come with a price in other ways, like higher fee charges and fewer or more restrictive features. 

Here are some key low rate personal loan risks to look out for:

  • High fee charges: This could include application fees, ongoing service fees, late payment fees or early repayment fees, among other charges.

  • Strict repayment terms: Some low rate personal loans might have strict repayment terms. Useful features to look for in a loan are flexible repayment options (usually weekly, fortnightly or monthly options) and the ability to make extra repayments without penalty. 

  • Negative impact on credit score: If you’re unable to make your regular loan repayments, not only could the lender penalise you, but your credit score could also take a real hit. Only borrow money that you can commit to paying back.

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JP Pelosi
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Managing editor

Jean-Paul (JP) Pelosi is an experienced journalist and editor who has contributed to many of Australia's leading media outlets including The Guardian, News.com.au, Domain.com.au, Investment Magazine and ANZ's Bluenotes. He has also edited news and communications for large financial services companies such as CommBank, Suncorp, Allianz and Amex. He loves a well told story and applying his editorial experience to content that readers both care about and enjoy. JP heads up our writing team.

More FAQs about low interest personal loans

Do banks have the lowest rates for personal loans?

Non-bank lenders like online lenders, mutual banks and credit unions typically offer lower interest rates than the bigger banks because they have lower margins or overheads, which allows them to spend more money on their members and customers. 

To know where to find the current lowest rates, though, it’s always best to run a quick low rate personal loan comparison just to be sure.

How can I choose the best personal loan?

To find the best personal loan for you, you’ll need to consider your current financial situation and needs, then crunch the numbers to determine what you can afford to borrow, and run a personal loan comparison to find an option that suits your needs. 

What is the current lowest interest rate loan?

The best way to find out the current lowest personal loan interest rate is to compare, compare, compare! You can use Mozo’s personal loan comparison tool to compare loans from Mozo’s massive product database.

Why are some personal loan rates so high?

To put it simply – in the eyes of the lender, rates reflect risk. The worse a borrower’s credit score or financial situation is, the higher the risk they are to the lender, and thus, the higher the interest rate they’ll be offered.

How do I get a lower interest rate for my personal loan?

To give yourself the best chance at getting a low personal loan interest rate, here are some things you should do before applying for a loan:

  • Repair or improve your credit score

  • Aim to reduce any existing debt

  • Borrow within your means: search for a loan that matches your current needs and financial situation.

Are fixed or variable rate loans cheaper?

When it comes to paying interest on your loan, you'll have two different options: fixed or variable. But given you're probably after the most affordable loan possible, which type of loan is actually cheaper? The answer is that it can be either, as it depends on the movement of the RBA's cash rate, but here's a simple explanation of the differences:  

  • Fixed: Love the idea of stability? Well, this is exactly what a fixed loan will give you. Because the interest rate is fixed, you'll have exactly the same interest rate over the life of the loan. Opting for a fixed rate loan also means you'll be immune to any fluctuations in the cash rate - which can be good if rates go up, but you might also end up paying more than with a variable rate if there is an RBA rate cut.
  • Variable: Variable rate loans can go up and down based on the RBA cash rate, which means your repayments could fluctuate up or down. On the plus side, if the RBA cuts rates during the life of your personal loan, you could actually end up getting a better (and cheaper) deal than a fixed rate. These loans also often have flexible features, so you can make extra repayments at any time to lower the cost and shorten the loan term.

What is a peer-to-peer lender? Are their rates lower than banks?

Peer-to-peer (P2P) lenders are becoming an increasingly prevalent, alternative option for Australians looking for low rate personal loans, but who are they? Providers such as Harmoney, Plenti and SocietyOne are online lending platforms that pair everyday investors with borrowers. Best of all, because they have lower overheads than some of the traditional players, P2P providers are generally able to offers loans with lower interest rates.

So, is there a catch? Yes. While many of the minimum interest rates offered by peer-to-peer lenders are towards the lower end of the scale, the maximum rates can be very high. This is because P2P lenders will assess you on an individual basis based on factors such as your credit history and employment status. If you're considered a borrower who is likely to pay back their loan (i.e. you have an excellent credit rating), then you may be offered a considerably lower interest rate than someone who is judged to be riskier.

Do big banks and lenders offer low interest rate personal loans?

They sure do. Some of the leading low interest loan options in the Mozo database are from credit unions and banks, so it's always important to compare a range of options before taking the loan plunge.

Opting for a personal loan with a with a major bank over an online lender could mean you'll have access to benefits such as customer service at a bricks and mortar branch, and even greater choice when it comes to the loan amount and the loan term.

Credit unions and mutual banks could also be a great option, as not only do they generally have low interest rates, but they are also well-known for providing a level of customer service you may not be able to get with an online provider.

Could I be missing out on any features by choosing a low interest loan over a standard personal loan?

The key draw of a low interest personal loan is in the name - the low interest rate! So if paying the lowest interest possible is number one on your priority list, then a personal loan with a low rate is probably going to be the most attractive option. With this in mind, because you're paying a cheaper rate of interest, your provider may not offer all of the features you would expect from a standard personal loan.

Some of the features you might not have access to with a low interest personal loan include:

  • Extra repayments: Some personal loans will give you the option of being able to make extra repayments at any time which means you'll be able to pay off the loan faster.
  • Redraw facility: If you've made extra repayments on your loan in the past, some providers will provide you access to this money down the road if you need to redraw it again.
  • Repayment frequency: Want to sync your personal loan repayments with your pay cycle? Some personal loans will give you the choice to make your repayments on a weekly, fortnightly or monthly basis.

Not concerned about any of these features? Well there's no need to worry then. Even if you are, you may still be able to find a low interest personal loan provider that offers these handy features - it may just take some shopping around to see what's out there.

Are there any fees I should look out for?

Like any loan, a low interest personal loan could come with a number of different fees. Here are some of the main ones you'll want to look out for:

  • Upfront fee: Also known as an application fee, this is what you'll be charged upfront when applying for your loan. While some providers will waive the fee altogether, they can often be as high as $600.
  • Late payment fee: It's as straightforward as it sounds - if you don't make your repayments on time you could be slapped with a late payment fee. These can vary in cost, but will generally be around $30.
  • Break cost fee: If you've opted for a fixed low rate personal loan, you may be required to pay a break cost fee if you choose to pay the loan out early. These aren't applicable to variable rate loans.
  • Ongoing fees: One of the features you'll want to look out for when applying for a loan is any ongoing service fees. A monthly or even yearly fee could really add up over the life of the loan, which is why it's important to look at the comparison rate when comparing loans, as it takes into account the interest rate and fees.

How much could I end up saving by opting for a low interest loan over a standard loan?

There are a number of different factors that will ultimately decide how much you could save by choosing a low rate loan, including whether the loan has a fixed or variable interest rate or if the loan is secured or unsecured. But as an example, let's have a look at this scenario:

Mark decides to take out a $20,000 loan over a four-year term in order to help fund some renovations to his kitchen. Mark can use his house and car as collateral against the loan, so he's decided to opt for a fixed secured personal loan which has a low interest rate of just 4.99% (currently the lowest rate in the Mozo database as of May 10, 2022). According to the Mozo Personal Loan Comparison Calculator, Mark will end up saving $1094 in interest over four years by opting for the low 4.99% interest rate option compared to the current average fixed secured personal loan rate in the Mozo database of 7.47% (assuming no application or ongoing fees). It just goes to show that even a slightly lower rate could potentially net you a heap of savings over the life of a loan.  

How do low interest loans compare to other options like a low interest credit cards?

A low interest personal loan isn't necessarily going to be the right financing option for your own situation, with a number of other potential borrowing options, including credit cards, on offer. With a credit card, you may be able to take advantage of a range of features such as an interest-free period as well as bonus point or rewards point offers - features that aren't available with personal loans. This means a credit card could be a handy and potentially more rewarding option for everyday spending.

However, if you know you're going to have to pay interest then a personal loan with a lower interest rate may be the better choice for you, especially with larger amounts. The average rate for all unsecured personal loans in the Mozo database is currently 9.4% (as of May 10, 2022), which compares to the average credit card interest rate of 17.00% - meaning you could be saving some serious interest by opting for a personal loan.

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Customer service
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Overall 3/10
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Overall I'm not too happy with the banks in general. I think they are greedy and don't offer much incentives

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Justin, Western Australia, reviewed 29 days ago
Commonwealth Bank Personal Loan
Overall 6/10
Easy service but not the best fees

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5/10
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6/10
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