Personal loans are popular options for Australians looking to finance home renovations and other major expenses. With personal loan rates at historic lows, they are also useful tools for consolidating and paying down debt.
The cheap interest rates and lightning-fast online application and approval times are big pluses, but there are a few important things to consider when looking for a low personal loan rate. Here are five essential tips from Mozo experts:
1. Use a good credit score to get a low rate
Online lenders reserve their best rates for borrowers with excellent credit, which is usually over 800. To increase your credit score, pay your bills on time, make credit card payments by the due date, and try not to ask for too much credit or a loan. some products.
2. Shop around and compare rates online
To find the most competitive personal loan rates, you’ll need to look beyond the big banks. Small online lenders have some of the lowest rates for unsecured personal loans, with interest rates starting as low as 6.00% for borrowers with excellent credit.
3. Use online rate estimating tools
Some lenders allow you to enter a few details online to get a quick personalized quote without affecting your credit score. It usually only takes a minute or two and you’ll get an estimate of the lowest rates available before making an actual request.
4. Do not exaggerate on the loan amount
Before applying for a loan, check that you can comfortably afford the repayments. Use an online calculator to see how much you can borrow and what the monthly repayments will be.
5. Avoid payday loans and quick cash loans
Payday loans can be quick and easy to arrange, but in Australia the statutory interest rate cap for these loans is 48% per annum, plus a hefty upfront fee.
Want to compare more personal loan options? Access our personal loan hub for more providers plus a bunch of how-to guides and tips!
* DISCLAIMER: The Comparison Rate combines the lender’s interest rate, fees and charges into one rate to show the true cost of a personal loan. The comparative rates displayed are calculated on the basis of a loan of $30,000 with a term of 5 years or a loan of $10,000 with a term of 3 years as indicated, on the basis of repayments monthly principal and interest payments, on a secured basis for secured and unsecured loans. basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and durations will result in different comparison rates. Costs such as withdrawal fees or prepayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may affect the cost of the loan.
^ See Mozo Experts Choice Personal Loan Awards information
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