Personal loans range from 6% to 29% APR depending on your credit profile and the lender. Here's how to find the right one — and when a broker gets you a better deal.
- Secured personal loans (using an asset as security) offer lower rates than unsecured loans.
- The comparison rate includes fees — always compare this, not just the headline rate.
- A personal loan broker compares specialist lenders, not just the four major banks.
- Bad credit personal loans exist but carry higher rates — a broker identifies the right lender.
Personal loans are one of Australia's most widely used financial products — covering everything from car purchases and renovations to debt consolidation and life events. But the range of products, rates, and fees is enormous. Here's how to navigate it.
Secured vs Unsecured Personal Loans
Secured personal loan: the loan is secured against an asset — typically a car or other vehicle. The lender can repossess the asset if you default. In exchange: lower interest rate (typically 6-10%), higher borrowing limits, potentially easier approval.
Unsecured personal loan: no asset required as security. Higher rates (typically 8-20%+), lower borrowing limits, stricter credit assessment.
For most car purchases, a secured personal loan (or specifically, a car loan) is more cost-effective than an unsecured loan.
How to Compare Personal Loans
Comparison rate: adjusted to include fees and charges. Always compare on comparison rate, not just the headline rate.
Loan term: shorter term = higher monthly repayments but less total interest. Longer term = lower repayments but higher total cost. Use our loan repayment calculator to model different scenarios.
Early repayment fees: some lenders charge a fee if you pay the loan off early.
Fixed vs variable rate: most personal loans are fixed rate, providing certainty over the loan term.
Moneysmart's personal loan comparison is a useful reference for benchmarking rates.
Unsecured Personal Loans for Debt Consolidation
If you have multiple high-rate debts, consolidating into a single personal loan at 10-14% can significantly reduce monthly repayments and total interest. This is different from — and less powerful than — debt consolidation via your home loan (which can access rates of 6-7%), but it's available to renters who don't want to touch their mortgage.
Personal Loans for Self-Employed Borrowers
Self-employed individuals can access personal loans, though lenders may ask for additional income verification (BAS statements, bank statements, or tax returns). Specialist lenders are often more accommodating than the majors.
Bad Credit Personal Loans
Mainstream banks typically decline applicants with credit defaults. Specialist lenders offer bad credit personal loans at higher rates (18-29%) for borrowers rebuilding credit. A broker identifies which specialist lender suits your specific situation without multiple declined applications harming your credit file further.
When to Use a Personal Loan Broker Near You
A personal loan broker compares options across a broad panel of lenders — banks, credit unions, and specialist non-bank lenders — to find the rate and terms that suit your situation. This is particularly valuable when your credit profile doesn't fit mainstream bank criteria, or when you're consolidating multiple debts and need advice on structure.
Contact Sam for a free personal loan comparison across our lender panel.
Frequently Asked Questions
Does applying for a personal loan affect my credit score?
Yes — a credit application results in an enquiry on your file. Using a broker who pre-assesses your chances before submitting a formal application reduces unnecessary credit hits.
Can I get a personal loan with bad credit?
Often yes, with specialist lenders. Rates are higher, but approval is frequently possible. A broker will identify which lenders consider your specific situation without wasting applications on lenders unlikely to approve.