Top personal loan tips and traps

By Olivia Gee · · 2 min read
Fact Checked
Advertiser disclosure

There are a lot of ways to make a personal loan work for you, whether you're looking to consolidate debt, finance long-planned home projects or simply access some extra cash. And in these economically tough times, plenty of Aussies could do with a helping hand. 

A low rate personal loan from a trusted bank or non-bank lender is a far better option than opting for a payday or fast cash loan, and personal loan rates are now more accessible than ever. But there are plenty of things that can go awry in the process of taking out a loan and paying it off.

So if you're considering a personal loan, read on for the Mozo expert guide to the top tips and traps of personal loans. Then, check our comparison of low rate personal loans from bank and non-bank lenders in Australia.

Expert personal loan tips:

Look beyond the big banks to find the most competitive rates. Smaller online lenders have some of the lowest rates on the market, with rates starting from under 10% for borrowers with good credit.

Save on interest with fee-free extra repayments. Every extra cent you put into paying off your loan will reduce the interest you pay. Just watch out for fees, as some lenders will charge you for extra repayments.

Pay off lingering debt with a debt consolidation loan. If you've got multiple credit card or small loans and are getting lost in the paperwork and late repayment penalties, consider combining smaller debts into one lower rate debt consolidation loan.

Avoid these personal loan traps:

Steer clear of payday and fast cash loans. Payday loans might be quick and easy to organise, but in Australia the legal interest rate cap for these loans is an astounding 48% p.a. plus hefty upfront fees.

Choose the right fixed loan term up front to avoid break cost fees. Ensure you don't lose out savings made through early repayment by choosing your loan term carefully and finding a loan that will allow for extra repayments.

Check your consolidated loan timeline. You might have scored a lower interest rate to reduce your repayments, but if the loan term is stretched out much longer than the individual debts were, you could end up paying more interest over the life of the loan.

If you're wondering what kind of loan you can take out, then read our guide to personal loan eligibility and check out the loan options below to start your research.

LOW RATE PERSONAL LOANS - last updated 14 May 2022

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure
  • Sponsored Deal
    Mozo Expert Choice Badge
    Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.95% p.a.to 19.95% p.a.
    5.95% p.a.to 19.95% p.a.based on $30,000
    over 5 years

    Borrow up to $50,000 unsecured from the only lender with no fees and none of the bank. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Back to back winner of Mozo’s Experts Choice Unsecured Personal Loan Award, 2021 & 2022^.

    Repayment terms from 2 years to 7 years. Representative example: a 5 year $30,000 loan at 5.95% would cost $34,757.21 including fees.

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  • Featured Product Hot Deal A special low rate starting from 5.45% (6.07% comparison rate)
    Low Rate Personal Loan

    Excellent Credit

    interest rate
    comparison rate
    Monthly repayment
    5.45% p.a.to 8.48% p.a.
    6.07% p.a.to 8.84% p.a.based on $30,000
    over 5 years

    OurMoneyMarket offer competitive low rates for borrowers with excellent credit on loans up to $75,000, plus free extra repayments and fee-free redraw facility. Winner of Mozo's Experts Choice Unsecured Personal Loan 2021 award^.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 5.45% would cost $34,590.57 including fees.

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  • Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.35% p.a.to 19.09% p.a.
    6.14% p.a.to 19.99% p.a.based on $30,000
    over 5 years

    Fast, easy and 100% online, this is a low cost loan with no ongoing fees or extra repayment penalties. It's perfect for savvy borrowers with great credit. If you’re over 18 and earn above $30,000, you could qualify (other eligibility criteria may apply).

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 5.35% would cost $34,832.61 including fees.

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  • Home Improvement Loan

    Fixed, Unsecured

    interest rate
    comparison rate
    Monthly repayment
    5.75% p.a.
    5.96% p.a.based on $30,000
    over 5 years

    Handypay offers flexible home improvement loans for Excellent Credit or better. Handypay is a specialist home improvement plan provider and offers loans up to $75,000.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 5.75% would cost $34,840.18 including fees.

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    Details
  • Personal Loan

    Unsecured, Fixed, Excellent Credit

    interest rate
    comparison rate
    Monthly repayment
    6.39% p.a.to 7.89% p.a.
    6.39% p.a.to 8.49% p.a.based on $30,000
    over 5 years

    With low rates for borrowers with excellent credit, a quick 1 minute rate estimate and simple online application, there’s a lot to love about this loan! You’ll not only benefit from no exit fees, there are also no early repayment fees. You could qualify by simply earning above $25,000 and you’ll be on the way to start spending (other eligibility criteria may apply).

    Repayment terms from 3 years to 5 years. Representative example: a 5 year $30,000 loan at 6.39% would cost $35,126.40 including fees.

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    Details
  • Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.95% p.a.to 17.45% p.a.
    6.79% p.a.to 17.86% p.a.based on $30,000
    over 5 years

    Wisr offers personal loans for any worthwhile purpose, tailored to your credit score to ensure you’re getting a fair deal. Plus, no ongoing or early exit fees. Loans from $5,000 to $79,000. Terms of either 3, 5 or 7 years. $595 establishment fee. Eligibility criteria applies.

    Repayment terms from 3 years to 5 years. Representative example: a 5 year $30,000 loan at 5.95% would cost $35,352.21 including fees.

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    Details
  • Personal Loan

    Variable

    interest rate
    comparison rate
    Monthly repayment
    5.75% p.a.to 25.99% p.a.
    6.68% p.a.to 29.2% p.a.based on $30,000
    over 5 years

    Repayment terms from 2 years to 7 years. Representative example: a 5 year $30,000 loan at 5.75% would cost $35,370.18 including fees.

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    Details
  • Featured Product
    Mozo Expert Choice Badge
    Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.95% p.a.to 19.95% p.a.
    5.95% p.a.to 19.95% p.a.based on $30,000
    over 5 years

    Borrow up to $50,000 unsecured from the only lender with no fees and none of the bank. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Back to back winner of Mozo’s Experts Choice Unsecured Personal Loan Award, 2021 & 2022^.

    Repayment terms from 2 years to 7 years. Representative example: a 5 year $30,000 loan at 5.95% would cost $34,757.21 including fees.

    Go to site
    Details
  • Mozo Expert Choice Badge
    Personal Loan

    Unsecured, Fixed

    interest rate
    comparison rate
    Monthly repayment
    4.99% p.a.to 14.99% p.a.
    4.99% p.a.to 14.99% p.a.based on $30,000
    over 5 years

    Excellent credit score needed to obtain this rate. Enjoy no-fuss personal loans of up to $30,000 with Alex Bank. No hidden early repayment penalties. Terms from 6 months to 5 years. Convenient, 100% online approval. Must be over 18 to be eligible (other eligibility criteria may apply). Winner of Mozo's Experts Choice Unsecured Personal Loan award 2022^.

    Repayment terms from 1 year to 5 years. Representative example: a 5 year $30,000 loan at 4.99% would cost $33,959.97 including fees.

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    Details
  • Green Loan

    interest rate
    comparison rate
    Monthly repayment
    5.79% p.a.
    6.36% p.a.based on $30,000
    over 5 years

    Handypay offer flexible green loans up to $75,000 for Excellent Credit or better. Handypay is a specialist home improvement plan provider.

    Repayment terms from 1 year to 10 years. Representative example: a 5 year $30,000 loan at 5.79% would cost $34,873.55 including fees.

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    Details
  • Featured Product
    Low Rate Personal Loan

    Very Good Credit

    interest rate
    comparison rate
    Monthly repayment
    8.49% p.a.to 11.19% p.a.
    8.85% p.a.to 11.56% p.a.based on $30,000
    over 5 years

    Competitive low rates on loans up to $75,000 for excellent credit. Free extra repayments. Fee-free redraw facility. Winner of Mozo's Experts Choice Unsecured Personal Loan 2021 award^.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 8.49% would cost $37,171.08 including fees.

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    Details

* WARNING: 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. 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 Loan Awards

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