Peer to Peer Personal Loans

Peer to peer lending is new to Australia but promises to shake up the personal loan space by cutting out the banks. Fast and flexible, P2P loans offer standout rates, low fees and access to funds on the same day in some cases. Check out the table below to compare the P2P deals available now!

Read more

Do peer to peer loans have fixed or variable interest rates?

The major P2P players in Australia only offer unsecured fixed interest rates. Generally peer to peer lenders use a risk-based tier system, which means the best rate will be given to those with a squeaky clean credit rating.

Do peer to peer loans have fees?

Yes, however peer to peer borrowing fees are generally lower than those attached to personal loans from the big banks, with some P2P providers offering no application, ongoing fees or exit fees.

How do I apply for a peer to peer loan?

In a flash by clicking on the blue ?go to site? button, which will take you to the peer to peer providers online application page. The benefit of a P2P loan is the fast online approval process, which in some cases means the funds will be in your account on the same day.

Peer to peer lending personal loan comparisons on Mozo - rates updated daily

Want more? Compare all 196 personal loans in the Mozo comparison engine.

Compare more personal loans

*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.

**Representative example figures and monthly repayment figures are estimates only, based on the advertised rate, mandatory fees, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

 

Switch & Save Calculator

Compare savings from over 100 personal loans. How much could you save by switching your personal loan? Find out in a few clicks.

Get started

Advertisement

Personal Loan Resources

Reviews, news, tips and guides to help find the best personal loan for you.

Peer to peer lowdown

If you're looking to borrow from a non traditional lender, then you may be wondering if a peer to peer provider could be a good alternative. But what exactly is peer to peer lending and is it the right option for you?

Let our quick P2P lowdown answer all those tricky questions to help you decide:

What is P2P lending?

What happens when you remove the banks from the borrowing equation and connect investors directly with borrowers? Well, according to the peer to peer movement you'll get a better personal loan deal with lower rates and fees. Peer to peer platforms aren't just limited to the personal loan world either but include all sorts of services including car sharing, house swaps, clothes swaps and more...

For instance, house swapping platforms like AirBnB allow homeowners to rent out their property to holiday goers for a short stint. The homeowner gets some much needed cash and the holiday-goer benefits from paying a cheaper amount for their overseas accommodation.

Traditional peer to peer lending and borrowing works in the same way, as an individual investor uses the P2P platform to lend directly to a borrower. The investor benefits from earning a profit through the interest charged and also gets that good feeling of helping out a stranger, whilst the borrower receives a more competitive rate and lower fees than what is offered by the big banks.

Learn more about peer to peer lenders by reading our tell all guide here.

Who are the major peer to peer players?

In Australia there are only a few main players (so far) for personal lending:

SocietyOne: As the first peer to peer platform to launch in Australia back in 2011, SocietyOne has a slightly different lending model to the traditional peer to peer platforms overseas because instead of connecting individual investors with strangers, the platform connects wholesale investors with borrowers.

RateSetter: Originating in the UK, RateSetter was brought to Australian shores in 2014 and was the first peer to peer platform to offer investment opportunities to everyday Aussies and is also known for introducing the concept of a provision fund aimed at protecting lenders if the borrower defaults on the personal loan.

MoneyPlace: The newest player to enter the game of peer to peer lending in Australia is Melbourne start-up MoneyPlace. Like SocietyOne and RateSetter, this P2P provider offers competitive rates to credit worthy borrowers. In 2015, MoneyPlace entered into a five year $60 million strategic partnership with Auswide Bank, which will support the P2P lender during its initial growth stage.

You can compare the P2P providers side by side in the comparison table at the top of this page by interest rate, comparison rate (a calculation that shows the cost of both the rate and fees) and the features.

How can a P2P lender give me a better deal?

By removing the banks from the borrowing equation, peer to peer lenders have vastly lower overheads, as they don't have to pay dividends back to shareholders. Plus, they are run entirely online, which means they don't have to pay the high cost of branches and managers either.

What's the difference between a P2P lender and a credit union?

Just like peer to peer lenders, credit unions are also part of the strangers helping strangers social movement, as they are completely customer owned and run by the philosophy of passing profits back to customers not shareholders.

However, there is a distinct difference between the two, as credit unions don't offer the option of becoming an investor like with a P2P player.

As a borrower though, your experience should be the same whether you go for a P2P lender or credit union - you apply for the personal loan and once approved you pay it back in set instalments over an agreed period of time (usually between 1 to 5 years). So if you're trying to choose between going for a P2P lender or credit union, the decision breaker should really be the better deal.

Am I eligible for a peer to peer loan?

As long as you meet the conditions of the P2P provider - e.g over 18 years old and are an Australian resident - you'll be eligible for a peer to peer loan. But keep in mind if you have a poor credit rating you'll have to pay more in interest, as peer to peer lenders use a tier based pricing system reserving their best interest rates for creditworthy borrowers.

For instance at the time of writing, one of the peer to peer players we looked at was offering a low 8.95% interest rate if you had an "excellent" Veda Credit Grade but if your credit rating was "below average" you would receive a high 17.23% interest rate.

Find out how you can get a free copy of your credit report here.

Is a peer to peer loan right for me?

If you're a creditworthy borrower looking for a loan under $35,000 for a term of 1 to 5 years then a peer to peer loan could be for you, as peer to peer providers generally have smaller borrowing amounts and shorter timeframes compared to the major bank providers, whose loans can reach up to $100,000 and stretch over a 10 year period.

It's also perfect for borrowers who don't have any security like a car or house to secure a loan with, as peer to peer loans are usually unsecured. Plus if you're on a strict budget, you'll love the fact that P2P loans generally have fixed interest rates that are locked in for the life of the loan.

p>But if this doesn't sound like you, compare the personal loan market here, to find the right borrowing match for your needs.

What features should I look for?

Just like any other personal loan, it's important to look for flexible features to make the loan work for you. Here are some things to keep an eye out for:

Extra repayments facility: When you get some extra cash in your pocket, you'll be thankful if the P2P loan you signed up with allows you to make extra repayments, as a little bit extra can go a long way in the long run. For instance, if you take out a $30,000 loan over 5 years with a 9% interest rate and make an extra repayment of $200 each month you will save $2,187 in interest and slash your personal loan by 1 year and 5 months.

Redraw facility: While paying off your personal loan early should be your ultimate goal, if you need some money for unexpected bills or a new family car down the track, the option of dipping into those extra repayments you've made could come in handy.

Flexible repayment frequency: Another feature that can help you pay down your loan sooner is setting up your repayments over a fortnightly cycle rather than monthly. With 26 fortnights in the year, compared to just 12 months this will mean you will pay an extra month every year of the life of the loan. For example, if your fortnightly repayments are $500 you will pay off $13,000 in a year, whereas if your monthly repayments are $1,000 you will only pay off $12,000.

Does a peer to peer provider sound like the right match for your borrowing needs? Scroll to the top of the page to start your comparison. Or alternatively use our personal loan comparison tool to search Mozo's personal loan database that covers over 100 loans in the market today.

Personal Loan Reviews

ANZ
ANZ personal loan review
Overall
6/10
Lots of options

ANZ have flexible payment plans if you have unexpected circumstances.

ANZ have flexible payment plans if you have unexpected circumstances.

Price
7/10
Features
6/10
Customer service
8/10
Convenience
7/10
Trust
3/10

Lisa | Victoria

reviewed about 1 month ago

ANZ
ANZ personal loan review
Overall
6/10
Lots of options

ANZ have flexible payment plans if you have unexpected circumstances.

ANZ have flexible payment plans if you have unexpected circumstances.

Price
7/10
Features
6/10
Customer service
8/10
Convenience
7/10
Trust
3/10

Lisa | Queensland

reviewed about 1 month ago

Westpac
Westpac personal loan review
Overall
9/10
efficient and great customer service always

This bank has a long and strong privacy and security ethic in the 20 plus years I have banked...

This bank has a long and strong privacy and security ethic in the 20 plus years I have banked with them. They are innovative and flexible and competitive with great, always pleasant customer service.

Price
10/10
Features
10/10
Customer service
10/10
Convenience
9/10
Trust
10/10

Julie | New South Wales

reviewed about 1 month ago

Personal loan Guides

Calculators