Personal loans are popular options for Australians looking to finance home improvement and other large expenses. With record low personal loan rates, they are also useful tools for debt consolidation and amortization.
Low interest rates and lightning-fast online application and approval times are big draws, but there are a few key things to keep in mind when hunting for a low personal loan rate. Here are five key tips from the Mozo experts:
1. Use a good credit score to get a low interest rate
Online lenders reserve their best interest rates for borrowers with excellent credit, which is usually over 800. To improve your credit score, pay bills on time, make credit card repayments by the due date, and try not to apply for too many loans or credit products.
2. Shop and compare prices online
To find the cheapest personal loan rates, you need to look beyond the major banks. Smaller online lenders have some of the lowest interest rates on unsecured personal loans, with rates starting below 6.00% for borrowers with excellent credit ratings.
3. Use online price estimation tools
Some lenders allow you to fill in a few details online for a quick personalized rate quote without affecting your credit score. It usually only takes a minute or two and you will get an estimate of the lowest available rates before actually making an application.
4. Don’t overdo it with the loan amount
Before applying for a loan, check that you can easily afford the repayment. Use an online calculator to see how much you can borrow and what the monthly repayments are.
5. Stay away from payday and fast cash loans
Payday loans are quick and easy to organize, but in Australia the statutory interest rate cap on these loans is a staggering 48% pa plus high up-front fees.
Would you like to compare more personal loan options? Head over to our personal loan hub for more providers and a range of handy guides and tips!
* WARNING: The Comparison Rate combines the interest rate, fees, and lender fees into a single rate to show the true cost of a personal loan. The comparison rates shown are calculated based on a loan of $ 30,000 for a term of 5 years or a loan of $ 10,000 for a term of 3 years as specified, based on monthly principal and interest payments, on a secured basis for secured loans and a unsecured basis for unsecured loans. This comparative sentence applies only to the example or examples given. Different amounts and terms lead to different comparison rates. Costs such as redemption fees or early repayment penalties as well as cost savings such as fee exemptions are not included in the comparison price, but can influence the cost of credit.
^ See information about the Mozo Experts Choice Personal Loan Awards
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