Top personal loan tips and traps

Australian cash in purse

Personal loans are likely to become increasingly popular in coming months as Australians look to consolidate debt, finance long-planned home projects or finally plan for an overseas holiday. 

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 the truth is, 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 and 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 some of 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.

LOW RATE PERSONAL LOANS DECEMBER 2021 - rates updated daily

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

    Unsecured, Fixed, Excellent Credit

    interest rate
    comparison rate
    Monthly repayment
    6.39% p.a.to 7.49% p.a.
    6.39% p.a.to 8.19% 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).

    Go to site
    Details
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    Mozo Experts Choice 2022
    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 Best New Loan Product award 2021^.

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    Details
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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).

    Go to site
    Details
  • Hot DealRefinance your existing Big 4 personal loan to a NOW Finance No Fee Personal Loan by Dec 31 to receive a $200 Westfield gift card (T&Cs apply).
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    Mozo Experts Choice 2022
    No Fee Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.95% p.a.to 17.95% p.a.
    5.95% p.a.to 17.95% 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^.

    Go to site
    Details
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    Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    6.49% p.a.to 20.95% p.a.
    6.49% p.a.to 20.95% p.a.based on $30,000
    over 5 years

    Low personalised rates, ideal for borrowers with excellent credit. No monthly account fees, no early payout fees, so you can pay off your loan sooner. $0 establishment fee for loans from $5,000 to $30,000, a $595 establishment fee will be charged on loan amounts of $30,001 to $64,000.

    Go to site
    Details
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    Personal Loan

    Fixed, Secured

    interest rate
    comparison rate
    Monthly repayment
    5.99% p.a.to 21.99% p.a.
    7.26% p.a.to 23.15% p.a.based on $30,000
    over 5 years

    Special Offer: Enjoy no interest and no repayments for the first 3 months with a Better Start Personal Loan. Available for new personal loan customers, borrowing $20K+ to consolidate their debts. Offer ends 8 December 2021 (T&C’s apply). Offering loans from $3,000 at a fixed rate for the life of the loan.

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    Details
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    Unsecured Personal Loan

    Excellent Credit, Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.95% p.a.to 10.49% p.a.
    5.95% p.a.to 12.83% p.a.based on $10,000
    over 3 years

    Be rewarded for your good credit history with low rates. No ongoing fees. Pay off your loan with no early repayment penalties. Apply online and get a quote in minutes

    Go to site
    Details
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    Standard Personal Loan

    Fixed, Unsecured

    interest rate
    comparison rate
    Monthly repayment
    7.99% p.a.
    8.62% p.a.based on $30,000
    over 5 years

    Heritage Bank discounted rates for borrowers with excellent credit. Available loans starting from $5,000 to $25,000. Your choice of loan terms up to five years. Extra repayments allowed, but may incur fees.

^See information about the Mozo Experts Choice Personal loans Awards

* 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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