Personal loan rates in Australia range from 6% to 25%+ p.a. depending on your credit profile. This guide explains the difference between secured and unsecured loans, what lenders actually look at, and how to compare offers properly using comparison rates.
The first decision when considering a personal loan is whether to borrow secured or unsecured. This affects both your interest rate and what is at risk if you cannot repay.
| Feature | Secured Personal Loan | Unsecured Personal Loan |
|---|---|---|
| Collateral required | Yes — usually a vehicle or asset | No |
| Interest rate (typical 2026) | 6–11% p.a. | 9–20%+ p.a. |
| Risk if you default | Asset can be repossessed | Credit damage, debt collection |
| Common uses | Car purchases, larger amounts | Renovations, debt consolidation, travel |
| Approval speed | Slower (asset valuation required) | Often same-day or next-day |
Enter your loan amount, rate, and term to see monthly repayments and total interest.
Open Personal Loan Calculator →| Lender Type | Unsecured Rate Range | Notes |
|---|---|---|
| Major banks (Big 4) | 11–17% p.a. | Higher rates but established reputation |
| Credit unions and mutuals | 8–13% p.a. | Often lower rates for members |
| Online/fintech lenders | 7–16% p.a. | Fastest approval, rate based on credit score |
| Buy-now-pay-later platforms | 0% (promotional) to 30%+ | BNPL now regulated under consumer credit law |
Under the National Consumer Credit Protection Act, all Australian lenders must display a comparison rate based on a $30,000 loan over 5 years. This includes most fees in a single figure. Always use comparison rates when comparing, not headline rates.
Also check: early repayment fees (fixed rate personal loans often charge penalties for paying out early), redraw availability, and whether the rate is fixed or variable.
The comparison rate is genuinely useful — it folds most fees into a single percentage so that two loans can be compared honestly. But it is calculated on a standardised example loan amount and term, and it does not capture everything.
Read the credit guide and the schedule of fees rather than relying on the headline figure alone.
Fixed rate personal loans give a certain repayment for the term. That certainty commonly comes with restrictions on making additional repayments, or with break costs if you pay the loan out early.
Variable rate loans usually allow extra repayments without penalty, which materially reduces total interest if you have the capacity to make them. The trade-off is that the rate can rise.
Secured loans are backed by an asset, most often a vehicle, and price lower because the lender's risk is lower. Default puts the asset at risk. Unsecured loans price higher and put no specific asset on the line, though the debt remains fully enforceable.
If you intend to repay early, the ability to make extra repayments without penalty is frequently worth more than a slightly lower advertised rate.
Australian credit providers have hardship obligations. If you cannot meet repayments, contact the lender early and request a hardship variation. Doing so before arrears accumulate gives you more options.
Free, independent, confidential financial counselling is available through the National Debt Helpline on 1800 007 007. Financial counsellors can negotiate with creditors on your behalf and explain options you may not know exist. There is no cost.
Compare personal loans on the comparison rate, then read the fee schedule for what the comparison rate omits. Decide whether you value the certainty of a fixed rate or the flexibility to make extra repayments, and understand that secured borrowing is cheaper because you have put an asset at risk.
Check your credit file before applying, apply once rather than everywhere, and borrow what you need. This page provides general information only and is not financial advice. Speak with a licensed credit provider or a free financial counsellor before committing.
What is the average personal loan interest rate in Australia?
As of 2026, unsecured personal loan rates in Australia range from approximately 7-8% p.a. for strong-credit borrowers at competitive lenders to 20%+ for borrowers with lower credit scores or from high-rate lenders. The major banks typically offer 11-17%. Online lenders and credit unions often offer better rates for eligible borrowers.
What is a comparison rate on a personal loan?
A comparison rate combines the interest rate with most fees and charges into a single percentage that represents the true annual cost. Australian lenders are legally required to display comparison rates. Always compare comparison rates rather than advertised rates — a 9.9% loan with high fees may have a comparison rate of 13%+.
What credit score do I need for a personal loan in Australia?
Lenders use credit scores from Equifax, Experian, and illion. Scores above 625 (Equifax scale) are generally considered good; above 750 is excellent. A higher score typically unlocks lower rates and higher loan amounts. You can check your score for free through your bank or ASIC's MoneySmart website.
Can I get a personal loan if I am self-employed in Australia?
Yes, but lenders require proof of income that is more complex than a standard PAYG payslip. You typically need 2 years of tax returns, an accountant's letter confirming your income, and 3-6 months of bank statements. Some specialist lenders offer low-doc personal loans for self-employed borrowers at slightly higher rates.
Illustrative ordering. Both methods pay minimums on every debt; they differ only in where the extra payment goes first.