Where can I get a green loan?

woman blowing bubbles in front of rainwater tank

Going green is top of mind for many Aussies right now, whether that’s opting for an eco-friendly car to drive or installing solar panels. 

But reality is, these more sustainable products can come with a hefty price tag. 

That’s where a green personal loan can really come in handy - especially one with a competitive interest.  

“As we live in a world where concerns about climate change and sustainability are only growing, it makes sense that Australian consumers are looking to do their part, whether that’s through environmentally friendly domestic upgrades or choosing an electric vehicle,” Mozo Banking Expert Peter Marshall says. 

“Both personal and car loan lenders are responding to this trend by offering green loan products, a handful of which come with some of the lowest interest rates available on the Mozo database.” 

In fact, right now the lowest car loan rate on the Mozo database is attached to loans.com.au’s Clean Green Car Loan at 3.97% p.a. (4.51% p.a. comparison rate*), winner of Best Green Car Loan in the 2021 Mozo Experts Choice Awards for Personal Loans

How does a green loan work? 

A green loan works in the same way a regular personal loan or car loan does, however they are specifically designed to fund things that are environmentally friendly - such as a low emissions car or ‘green’ home renovations. 

Like personal loans, green loans can be secured or unsecured and come with either fixed or variable rates. 

Right now on the Mozo database, the average unsecured green loan sits at 6.85% - that’s compared to the average across all unsecured loans of 9.75%

Similarly, the average green car loan rate sits at 4.75% compared to the current new car loan rate that sits at 6.21%. However, it’s important to note that there are currently only four green car loans on the Mozo database from Bank First, Illawarra Credit Union, loans.com.au and Bank Australia. 

Want to take a look at some green loan options available now? Read on for some top deals…

Compare green car loans

Loans.com.au Clean Green Car Loan
  • 3.97% p.a. fixed rate (4.51% p.a. comparison rate*)
  • 2021 Mozo Experts Choice Award winner^
  • Flexible repayment options

If an environmentally friendly car is what you have your heart set on, and you need a loan to get your hands on the keys, you may want to consider loan.com.au’s award-winning Clean Green Car Loan. Designed for ‘green’ vehicles, such as electric or hybrid cars, loans.com.au offers a low fixed interest rate of 3.97% p.a. (4.51% p.a. comparison rate*) on loans between $5,000 and $100,000. Not only that, there’s flexibility when it comes to paying off the loan - customers can choose from a weekly, fortnightly or monthly repayment schedule and can make extra repayments as well. It’s no wonder it took home a 2021 Mozo Experts Choice Award^ for Best Green car Loan. It’s important to note though, there are no redraws allowed on this loan and if you pay off your debt in full more than a year before your loan term is up you’ll be slapped with a $700 early repayment penalty. And on the topic of fees, while there is no monthly service cost associated with this loan, there is an upfront $400 application cost to factor in.

Illawarra Credit Union Green Car Loan Package
  • 4.25% p.a. variable rate (5.40% p.a. comparison rate*)
  • No early repayment penalty
  • Extra repayments and redraws allowed
Find out more

Need a green car loan with a competitive interest rate? Say hello to the Illawarra Credit Union Green Car Loan Package. Borrowers looking to purchase a low emissions car with a loan between $10,000 and $100,000 may receive a low 4.25% p.a. variable rate (5.40% p.a. comparison rate*). Customers have the choice of making weekly, fortnightly or monthly repayments and also have the ability to make extra repayments and redraws whenever they like. Plus, there is no early repayment penalty if you pay off your entire loan ahead of time. Don’t forget though, there is a $200 application fee straight off the bat and an ongoing $12 monthly service fee. Also keep in mind, with this package loan you must hold an offset account with the Illawarra Credit Union (to repay your loan with), have a connected visa debit card and be registered for online banking.

Compare green renovation loans

Handypay Green Loan
  • 5.89% p.a. fixed rate (7.58% p.a. comparison rate*)
  • No early repayment penalty
  • Extra repayments allowed

Whether you’re adding solar panels or installing a rainwater tank, the Handypay Green Loan may be exactly what you need for your eco-friendly home upgrade. Handypay specialises in home renovation loans, and with it’s Green Loan option it offers a low 5.89% p.a. fixed rate (7.58% p.a. comparison rate*) on loans between $2,001 and $75,000. With this product, customers can pay back their debt on a weekly, fortnightly or monthly basis as well as make extra repayments too. And the good news is, for customers that pay off their balance early, there is no hefty penalty for doing so. However, there are no redraws allowed on this loan and there’s a $250 application fee to be mindful of too.

Community First Credit Union Green Loan
  • 3.99% p.a. variable rate (4.99% p.a. comparison rate*)
  • Flexible repayment options
  • No early repayment penalty
Find out more

Community First Credit Union's Green Loan could be the perfect option for customers looking to fund the purchase of 'green products' - from solar panels to water recycling systems. This loan comes with a competitive variable rate of 3.99% p.a. (4.99% p.a. comparison rate*) and loan terms range from $1,000 to $50,000. Customers can make extra repayments on their loan whenever they want, on top of their regular weekly, fortnightly or monthly repayments. Plus, they can make redraws on their additional contributions too. There is also no early repayment penalty either for those that pay off their debt ahead of time. Just remember, there are a few fees to be weary of, like the $195 upfront application fee and an ongoing $10 monthly service fee.

Which other lenders offer green loans?

There are more options when it comes to green loans, whether you prefer a bank or credit union. 

Here’s what’s on offer:   

  • Australian Military Bank: Unsecured Green Loan - 4.15% p.a. (5.09% p.a. comparison rate*)
  • Illawarra Credit Union: Green Unsecured Personal Loan Package - 5.99% p.a. (7.13% p.a. comparison rate*) 
  • Bank Australia: Low Emission Vehicle Loan - 5.45% p.a. (5.45% p.a. comparison rate*) 
  • Bank First: Green Personal Loan - 7.25% p.a. (8.59% p.a. comparison rate*)
  • Bank First: Discounted Green Car Loan - 5.29% p.a. (5.56% p.a. comparison rate*) 
  • Sydney Mutual Bank: Green Loan - 6.10% p.a. (6.10% p.a. comparison rate*)
  • Police Bank: Green Loan - 5.79% p.a. (8.27% p.a. comparison rate*) 

It's important to note that home loan lenders are also offering green options for borrowers looking to build or buy an eco-friendly property. Here are some top green home loans in Australia right now. 

Not sure whether a green loan is right for you? Jump over to our personal loan comparison hub to compare more loan options.

* 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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