You can borrow money with a personal loan to pay for something unique, such as a vacation, a new automobile, or home improvements. You must pay it back with interest over a set period of time, often one to seven years.
You may save hundreds of dollars in interest and fees by negotiating for the finest personal loan terms.
Looking for a personal loan to consolidate debt? See debt consolidation and refinancing to find out if this is right for you.
Get the best personal loan for you
Most people shop around before they pick a holiday or buy a car. Shopping around for the right loan can save you thousands in interest and fees.
Fixed or variable interest rate
With a fixed interest rate, your repayments are fixed and won’t change over the loan term. You’ll know exactly how much will come out of your bank account each month.
With a variable interest rate, your repayments will change if interest rates change. If interest rates rise, your repayments will be higher. If interest rates fall, your repayments will go down.
A loan with a variable interest rate usually has no early exit fee. This might be better if you’re planning to pay the loan back early.
The interest rate you get on a personal loan can be different to the advertised interest rate. Your interest rate depends on things like your credit score, income, expenses, and savings.
Secured or unsecured loan
With a secured loan you provide an asset, such as your car, as security for the loan. If you don’t pay the loan back on time, the lender can repossess your asset and sell it.
With an unsecured loan, you don’t have to provide an asset as security. But the interest rate will be higher, and you may need a loan guarantor. If you fail to pay back the loan, the lender can still take you to court to get back the money you borrowed.
Loan guarantor
Some lenders will give you a lower interest rate if you have a loan guarantor. Before you ask a family member or friend to go guarantor for you, make sure you both understand the risks for a guarantor.
No interest loans
If you need to borrow up to $2,000 quickly for essentials, like a fridge or car tyres, see if you can get a no interest loan. These loans have no interest, no fees and quick approval.
Compare personal loans
Compare personal loans before you shop for what you want. Find out what you can spend and how much your repayments will be.
Compare these features:
| Comparison rate | a single figure of the cost of the loan — includes the interest rate and most feesmake sure you’re comparing the same loan amount and term |
| Interest rate | the rate of interest you’ll pay on the amount borrowed |
| Application fee | the fee when you apply for a loan |
| Other fees | the monthly service feethe default fee or missed payment feeany other fees — read the terms and conditions to find these |
| Extra repayments | whether you can make extra repayments without paying a fee |
| Loan use | some loans can only be used for specific things like a buying a car or home renovationsmake sure you can use the loan for what you need |
| Loan term | shorter terms often have lower interest rateslonger terms usually mean lower repayments, but you’ll end up paying more interest |
Comparison websites can be useful, but they are businesses and may make money through promoted links. They may not cover all your options. See what to keep in mind when using comparison websites.
Paying off your loan
Make sure you have enough in your bank account to make repayments when they’re due. If you don’t, you’ll be charged a missed payment fee.
Preparing a budget is a great way to stay on top of loan repayments. It can also help you plan for extra repayments to pay off the loan faster.
Before you start making extra repayments, check if there’s an early exit fee.
Managing loan repayments
If you’re having trouble making loan repayments, see how to get debt under control for help on what to do and who to contact.