Personal loans: how to compare rates, fees and terms
A personal loan lets you borrow a lump sum, from a few thousand dollars to tens of thousands, and repay it with interest over one to seven years. The right one is the loan with the lowest total cost for your amount and term that still lets you repay early if you want to. For reference, new personal fixed-term loans averaged 9.50% in August 2026 (RBA), and our personal loan calculator works out the monthly cost of any amount at that rate or your own.
This guide explains how lenders set your rate, fixed versus variable, what lenders look for in an unsecured personal loan, the fees to look for, the documents you'll need, how applying affects your credit report, what Centrelink can and can't advance you, and when a personal loan is the wrong tool.
By Better Rate Mate Editorial Team · Last reviewed
General information only. It doesn't take into account your objectives, financial situation or needs. Check the lender's key facts sheet, credit guide and TMD before you apply. We don't compare every lender, and we may earn a commission if you apply through our links.
What people pay on personal loans
Advertised rates are a starting point: most lenders use risk-based pricing, so the rate you're offered depends on your credit score, income, expenses and savings, and can be well above the headline figure. The RBA's monthly averages show what borrowers actually paid on new loans.
| Type of personal credit | Average rate |
|---|---|
| New fixed-term loans, all | 9.50% |
| New fixed-term loans, fixed rate | 10.44% |
| New fixed-term loans, variable rate | 8.32% |
| New fixed-term loans secured by residential property | 6.24% |
| Credit card balances accruing interest (outstanding) | 18.63% |
| Standard credit card rate (September 2026) | 21.24% |
Average personal loan interest rates over the past year
The average on new fixed-term loans has moved within about a percentage point over the last 12 months:
| Month | All new loans | Fixed rate | Variable rate |
|---|---|---|---|
| September 2025 | 9.15% | 10.19% | 8.06% |
| October 2025 | 8.99% | 10.22% | 7.80% |
| November 2025 | 8.99% | 10.11% | 7.85% |
| December 2025 | 8.92% | 10.03% | 7.82% |
| January 2026 | 9.30% | 10.33% | 8.11% |
| February 2026 | 9.06% | 10.21% | 7.91% |
| March 2026 | 9.11% | 10.33% | 7.87% |
| April 2026 | 9.15% | 10.55% | 7.85% |
| May 2026 | 9.24% | 10.42% | 8.07% |
| June 2026 | 9.07% | 9.97% | 8.10% |
| July 2026 | 9.40% | 10.48% | 8.22% |
| August 2026 | 9.50% | 10.44% | 8.32% |
Fixed or variable rate
A fixed rate keeps your repayments the same for the whole loan, which makes budgeting simple. Moneysmart notes fixed loans may charge a fee if you repay early. A variable rate moves with the lender's rate, so repayments can rise; check you could still afford them if the rate went up by 2 or 3 percentage points. Variable loans often let you make extra repayments or pay the loan out early without a fee.
Unsecured personal loans: what lenders look for
Personal loans are usually unsecured: no asset backs the loan, so if you don't repay, the lender can't take a particular item, but it can take legal action to recover the debt. Without security the lender relies on you, so it looks harder at your credit report, how stable your income is, your living expenses, and the debts and card limits you already have. That's why an unsecured loan usually costs more, and why some lenders offer a lower rate, or will only lend, with a guarantor.
A secured personal loan uses an asset, most often a car, as security, so the lender can take and sell it if you don't repay. That lowers the rate. Our guide to secured vs unsecured loans sets out the trade-offs.
Fees to look for
The interest rate is only part of the price. Moneysmart's list of fees to check:
- Application or establishment fees, usually added to the loan so you pay interest on them
- Ongoing administration or monthly fees
- Missed payment or default fees, and default interest
- Early repayment fees, mainly on fixed-rate loans
- Balloon payments, where a lump sum is due at the end
How much and for how long
A longer term lowers each repayment but increases the total interest, sometimes by thousands of dollars. Borrow what you need, over the shortest term you can comfortably afford. The personal loan calculator shows the repayment and total interest for every term side by side, and its "compare a second offer" option shows whether a lower rate with fees beats a higher rate without them.
Applying: your credit report and the documents you'll need
Under responsible lending law, a lender has to make reasonable inquiries about your finances and what you need the loan for, verify them, and not offer a loan that's unsuitable for you. Expect to provide identification, recent payslips or tax returns if you're self-employed, bank statements and details of your debts and regular expenses.
Each formal application is recorded on your credit report as an enquiry and stays there for five years. Moneysmart warns that applying for lots of loans can hurt your credit score. Some lenders give a personalised quote before a full application; ask whether a quote will be recorded on your file before you proceed.
Personal loan, credit card or buy now pay later?
Each suits a different job. For a one-off cost you'll repay over a few years, a personal loan is usually cheaper than a credit card; for small purchases you can clear within weeks, card interest-free days or buy now pay later can cost nothing if you pay on time.
| Personal loan | Credit card | Buy now pay later | |
|---|---|---|---|
| Best for | A set amount repaid over 1-7 years | Ongoing spending cleared each month | Small purchases repaid over weeks |
| Cost | Interest (new loans averaged 9.50% in August 2026) plus fees | Interest on unpaid balances (standard cards averaged 21.24% in September 2026) | Usually no interest; late and account fees apply |
| Repayments | Fixed schedule; the debt ends | Minimum repayment only; can revolve for years | Fixed instalments |
| Regulated as credit | Yes | Yes | Yes, since 10 June 2025 |
Can I borrow money from Centrelink?
You may be able to get part of your Centrelink payment early. Services Australia calls this an advance payment and describes it as like a loan from your payment: you get some of your income support payment or Family Tax Benefit Part A as a lump sum, then repay it out of your next 13 fortnightly payments, at the advance divided by 13 each time.
How much depends on the payment. On JobSeeker Payment, Parenting Payment, Youth Allowance, Austudy and ABSTUDY the advance is between $250 and $500. On the Age Pension, Disability Support Pension or Carer Payment, a single person can get between $588.05 and $1,764.15 and a member of a couple between $443.30 and $1,329.90; those amounts change each March and September. For many payments you need to have been getting it for at least 3 months, and you can't get an advance if you owe a debt to the Australian Government or can't afford to repay it within 6 months.
For a bigger essential, a No Interest Loan lends up to $2,000, or $3,000 for a rental bond or disaster recovery, with no interest or fees, if you have a Health Care Card or Pension Card or meet the income limits; see loans with bad credit for how it works. Lenders can also count Centrelink income when you apply for an ordinary personal loan, but they still have to check you can afford it.
| Your payment | Lowest advance | Highest advance |
|---|---|---|
| JobSeeker Payment, Parenting Payment, Youth Allowance, Austudy, ABSTUDY | $250 | $500 |
| Age Pension, Disability Support Pension or Carer Payment: single | $588.05 | $1,764.15 |
| Age Pension, Disability Support Pension or Carer Payment: couple | $443.30 | $1,329.90 |
When a personal loan is the wrong answer
If you need up to $2,000 for essentials such as a fridge, car repairs or medical costs and you're on a lower income, a No Interest Loan has no interest and no fees; see our guide to loans with bad credit for how the scheme works. If you're borrowing to pay other debts, read debt consolidation first. And if you're struggling with repayments you already have, call the National Debt Helpline on 1800 007 007 before taking on more credit.
General information only. It doesn't take into account your objectives, financial situation or needs. Check the lender's key facts sheet, credit guide and TMD before you apply. We don't compare every lender, and we may earn a commission if you apply through our links.
What to watch for
- The rate you're offered can be higher than the advertised rate. Compare written quotes, not ads.
- Fixed-rate loans may charge an early repayment fee. Check before you plan to pay the loan off early.
- A comparison rate is exact only for the lender's example amount and term; on a small loan, flat fees add a lot.
- Every formal application stays on your credit report for five years.
- Loan protection insurance offered with the loan is optional. Check what cover you already have.
Common questions
What is the easiest loan to get in Australia?
No loan skips the checks: every licensed lender has to make reasonable inquiries about your finances, verify them and not offer an unsuitable loan, so your income, expenses, debts and credit history decide it more than the lender or loan type does. If you're on a low income, a No Interest Loan assesses whether you can afford the repayments instead of running a credit check, and Centrelink can advance part of your own payment. Be wary of anyone promising guaranteed approval.
What documents are needed for a loan?
Usually identification, recent payslips (or tax returns if you're self-employed), bank statements, and details of your debts, credit card limits and regular expenses. Lenders need them to verify your finances under responsible lending law.
Can I borrow $5,000 from Centrelink?
Not that much. What Centrelink offers is an advance of part of your own payment: $250 to $500 on JobSeeker and similar payments, or up to $1,764.15 for a single pensioner, repaid over 13 fortnights. For essentials, a No Interest Loan lends up to $2,000 ($3,000 for a rental bond or disaster recovery) with no interest or fees. Both are cheaper than any loan that charges interest.
What is the oldest age you can get a loan?
Your age alone shouldn't decide it. The Age Discrimination Act makes it unlawful to refuse a service because of age, although it lets a lender treat age differently where that's based on actuarial or statistical data it can reasonably rely on. What matters more is whether you can repay over the term without substantial hardship, so a lender will look at how long your income will last, for example after you retire. A shorter term or a smaller loan can help.
Can I get a 0% interest personal loan?
Not from a mainstream lender, but No Interest Loans of up to $2,000 for essentials (up to $3,000 for a rental bond or disaster recovery) have no interest or fees, if you meet the income or concession card criteria.
Does applying for a personal loan affect my credit score?
A formal application is recorded as a credit enquiry and stays on your report for five years. Several applications in a short time can lower your score, so compare quotes first and apply once.
About rates on this page
We don't quote lenders' rates: they change often, depend on your credit history and we don't have a live feed. The averages here are the RBA's published figures for the month shown. Ask any lender for its interest rate, comparison rate and every fee in writing before you apply. This is general information, not financial advice.