Do green loans stack up against regular loans?

By Polly Fleeting ·
woman with solar panels bought using green loan

In the current world we live in, it’s no surprise that many Aussies are looking to go green. 

While it’s unlikely that recycling, composting or steering away from single-use plastic will cost you an arm and a leg, other efforts come with a heftier price tag. 

Meet the green personal loan.  

Whether you’re installing solar panels, getting a water tank or even making the switch to an eco-friendly car, these loans are designed to make your sustainable dream come true. 

How do green loans differ from regular personal loans? 

Unlike a general personal loan, a green loan is specifically for the purchase of products that are environmentally friendly. 

These could include: 

  • Solar panels 
  • Solar hot water systems
  • Solar battery systems 
  • Water tanks
  • Grey water treatment systems 
  • Double glazing 
  • Eco-friendly or “green” vehicle. 

And the good news is, these loans often come with a lower interest rate. 

“Not only do green personal or car loans make it easier for Aussie customers to fund their eco-friendly initiatives, lower rates also act as a reward for people choosing more sustainable options when it comes to their home or car,” Mozo Director, Kirsty Lamont said. 

According to the Mozo database, here are how current personal and green loan interest rates compare:

Loan TypeAverage Personal Loan RateAverage Green Loan Rate
Secured Multi-Purpose Loan8.09%6.29%
Unsecured Loan10.47%7.73%
Car Loan6.58%6.23%

Which lenders offer green loans? 

Currently on the Mozo database, there are 10 lenders that offer some sort of green personal loan option. 

Here’s a rundown of what’s on offer: 

Australian Military Bank 

  • Unsecured Green Loan: 3.15% (4.10% comparison rate*) 

Bank First 

  • Green Personal Loan (Variable, Unsecured): 8.75% (10.10% comparison rate*)
  • Green Personal Loan (Fixed, Unsecured): 8.75% (10.10% comparison rate*)
  • Discounted Green Car Loan (Fixed, Secured): from 5.29% (5.56% comparison rate*)
  • Discounted Green Car Loan (Variable, Secured): from 5.29% (5.56% comparison rate*)
  • Green Car Loan (Fixed, Secured): 8.29% (8.57% comparison rate*) 
  • Green Car Loan (Variable, Secured): 8.29% (8.57% comparison rate*)

Bendigo Bank

  • Green Personal Loan (Fixed, Secured): 6.79% (7.14% comparison rate*) 
  • Green Personal Loan (Fixed, Unsecured): 11.79% (12.84% comparison rate*) 

Community First Credit Union

  • Green Loan (Up to 10 years, Variable, Unsecured): 5.99% (6.26% comparison rate*) 
  • Green Loan (Up to 5 years, Variable, Unsecured): 7.99% (8.27% comparison rate*)

Hunter United 

  • Green Saver Personal Loan (Variable, Unsecured): 6.99% (8.36% comparison rate*) 

Loans.com.au

  • Clean Green Car Loan (New, Fixed, Secured): 3.97% (4.51% comparison rate*) 

Police Bank 

  • Green Loan (Fixed, Secured): 5.79% (5.93% comparison rate*)  
  • Green Loan (Fixed, Unsecured): 5.79% (5.93% comparison rate*)  

Transport Mutual Credit Union 

  • GreenRoad Hybrid & Electric Cars (Variable): 4.74% (5.04% comparison rate*)  

South West Slopes Credit Union 

  • Greener Futures Loan (Variable, Unsecured): 8.35% (8.35% comparison rate*)

Sydney Mutual Bank

  • Green Loan (Variable, Unsecured): 6.10% (6.10% comparison rate*) 

  

Remember that each of these loans may have different eligible purchases. So make sure when applying for the loan you are able to buy what you intend to with the money you are borrowing.  

Want to see how other personal loans stack up? Take a look at some options below or head to our personal loan hub for more.

Compare Personal Loans - page last updated September 19, 2020

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure.

I want to borrow

years

  • 8.00% p.a.

    8.21% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 8.00% would cost $36,647.51 including fees.

      Compare
    Details
  • Hot DealZERO Upfront fee until 30th September 2020^

    6.95% p.a.to 19.99% p.a.

    6.95% p.a.to 19.99% p.a.based on $30,000
    over 5 years

    Terms from 1 to 5 years. Representative example: a 5 year $30,000 loan at 6.95% would cost $35,599.71 including fees.

      Compare
    Details
  • 5.75% p.a.to 21.99% p.a.

    6.47% p.a.to 25.11% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.75% would cost $35,190.18 including fees.

      Compare
    Details
  • 7.65% p.a.to 26.99% p.a.

    7.65% p.a.to 26.99% p.a.based on $30,000
    over 5 years

    Terms from 3 to 7 years. Representative example: a 5 year $30,000 loan at 7.65% would cost $36,196.75 including fees.

      Compare
    Details
  • 6.99% p.a.to 9.49% p.a.

    6.99% p.a.to 12.2% p.a.based on $10,000
    over 3 years

    Terms from 2 to 3 years. Representative example: a 3 year $10,000 loan at 6.99% would cost $11,114.11 including fees.

      Compare
    Details

*The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed 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 indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loans Awards

Mozo may receive advertising fees from the financial institutions, issuers of financial or credit products and third party advice providers that are shown on this page. These fees are based on a cost per click, cost per acquisition, or a fixed fee.

Polly Fleeting
Polly Fleeting
Money writer

Polly Fleeting is a personal finance writer here at Mozo, specialising in loans and credit cards. Her work is aimed at helping people find ways to make smart product choices, reduce debt and get more for their hard-earned dollars. Polly has a degree in Journalism from the University of Technology, Sydney.