What is a green personal loan and where can I get one in 2020?
Wednesday 11 March 2020
The most important thing to know about a green personal loan is that it works just like a regular loan, but with a distinctly green twist.
It’s specifically designed to cover eco-related expenses, from the installation of rooftop solar panels to a grey water treatment system. Plus, besides being good for the planet, it’s also good for your wallet, so you could say a green loan is green in more ways than one.
While the average interest rate for an unsecured personal loan in the Mozo database is currently 10.84% p.a., the average rate for a green/eco loan is notably lower at 7.27% p.a.
Generally speaking green personal loans come with a lower interest rate than regular personal loans. So if you qualify for one, you might just be able to save yourself a pretty penny.
As Mozo Banking Expert, Peter Marshall, said, “The aim of a green personal loan is not only to make funding sustainable projects easier, but also to reward Aussies with a lower interest rate for taking the initiative and going green.”
Of course, to get the ball rolling, or plant that first seed as it were, you’ll have to provide evidence that you intend to use the loan for something sustainable or green. Some high cost projects a green loan can be used for include:
- Solar panels
- Solar hot water systems
- Battery systems to store solar energy
- Grey water treatment systems
- Rainwater tanks
- Double glazing
You might also be surprised to hear that this type of loan is often used to cover the cost of smaller things as well, such as more energy efficient white goods.
Green personal loans
Now that you have all the information on what exactly a green loan is, you’re probably raring to get some names. So without further ado, here are five green personal loans on offer in Australia right now:
Fixed interest rates for Police Bank’s Green Loan start from a low 5.79% p.a. (5.93% p.a. comparison rate*). You can borrow from as little as $5,000 to as much as $50,000, with loan terms ranging from 1 to 7 years.
It can be used for a number of environmentally friendly expenses, including solar hot water systems, eco-friendly vehicles and energy efficient white goods. There are no ongoing account fees, just beware that it does come with a $98 application fee.
Variable rates for the Community First Credit Union Green Loan also just make it into that low rate range, starting from as little as 5.99% p.a. (6.26% p.a. comparison rate*). With this loan you can borrow between $1,000 and $50,000 for 1 to 5 years to cover a multitude of green projects, including the cost of a rainwater tank, solar panels, insulation or double glazing.
The loan comes with no monthly account keeping fees and no penalty for early repayment, just take note that you will have to pay a sizable $195 application fee.
Customer-owned bank Hunter United offers a Green Saver Personal Loan for environmentally conscious Aussies looking to make eco-upgrades. Interest rates for the loan are variable and start as low as 6.99% p.a. (8.36% p.a. comparison rate*).
You can borrow between $2,000 and $30,000 for a period of 1 to 7 years. The loan covers most energy reducing or water saving additions you might be looking to make to your home, from solar panels to hydro power and rainwater tanks. There is a $200 upfront application fee to pay, but after that no ongoing fees and no penalty for early repayment.
If you’re looking to fund a big project, say one that is going to cost you more than $50,000, then Bendigo Bank’s Green Personal Loan might be worth looking into. There is no maximum amount you can borrow with this loan, only a minimum amount of $2,000.
Rates are fixed and start from 11.79% p.a. (12.84% p.a. comparison rate*) with loan terms ranging from 1 to 7 years. The loan can be used to fund a range of eco-friendly projects, such as solar hot water systems, insulation and energy efficient appliances. Just take note that it does come with an application fee of $150 and an early repayment penalty fee of $20.
With variable rates starting from 9.00% p.a. (10.04% p.a. comparison rate*), the Green Personal Loan currently has the lowest personal loan rate on offer from Bank First. There is no maximum loan amount, only a minimum borrowing amount of $5,000.
Loan terms range from 1 to 7 years and can be used for a number of eco-endeavours such as a grey water treatment system, solar panels, insulation and external awnings. It also comes with a redraw facility (a minimum of $500 at a time), but this must be used to pay for eco-friendly materials or products.
You will have to pay a $150 establishment fee when you take out the loan, but after that there are no monthly or annual service fees.
Didn’t find the personal loan you were after? Not planning an eco-project just yet? Why not head to our compare personal loans page for more personal loan options or have a gander at the deals on offer below.
^Average interest rates taken from products available in the Mozo database, correct as of Monday 9th March 2020.