The best personal loan interest rates are generally reserved for borrowers with the highest credit scores.

Here are the percentages of personal loan applicants in different credit score ranges, based on our analysis of over 10,000 loan requests submitted through Money.com.au.

Higher loan amounts typically involve more risk for lenders, and can result in a higher interest rate. For example, a loan amount of $40,000 might attract a higher rate than a loan of $10,000. According to our database, the average personal loan amount is $17,493, based on over 10,000 loan requests.

Some lenders charge higher rates if the loan purpose is deemed to be riskier. Debt consolidation loans are an example of a higher-risk personal loan purpose because the borrower is using the loan to pay off multiple existing debts. This can signal that the borrower may have had difficulty managing their finances in the past, making them riskier to lend to.

Debt consolidation loans were the most common reason for personal loans in our database, making up 51.92%. Next was home improvements at 15.56%, followed by holidays (6.84%), bills (4.96%), medical expenses (4.48%) and business costs (4.48%). Other reasons included vehicle repairs (3.72%), investments (2.91%), weddings (2.01%), dental expenses (1.68%), funerals (0.76%), sporting equipment (0.39%) and other (0.16%).

Please note that vehicle loans are not included in this data.

Broadly speaking, our data suggests lenders offer cheaper personal loan rates on loans taken out over a longer period of time. The average rate on a five-year personal loan is 10.42% p.a., compared to 15.83% p.a. on a one-year term according to our analysis.

Our research consistently shows that higher income borrowers qualify for the lowest personal loan rates. In our database, most applicants (74.79%) had a pre-tax income between $45,001 and $135,000. The rest were split as follows: 11.58% earned between $18,201-$45,000, 9.07% earned between $135,001 and $190,000, 4.13% earned over $190,001, and 0.42% earned between $0 and $18,200.

Our research clearly shows that younger borrowers pay a premium on their personal loan rate. Average rates gradually decrease the older the borrower is.

Full-time employees with a strong history in employment generally qualify for lower personal loan rates than part-time or casual workers. Our research found that most applicants (69.83%) in our database were full-time employees, while the rest were part-time (23.84%) or casual workers (6.33%).

Borrowers who own their own home are quoted cheaper personal loan rates on average than those who rent or live with parents. Homeowners with no mortgage get even cheaper rates on average than those with a home loan.

A majority of borrowers in our database (52.10%) were renters. The rest were homeowners with a mortgage (26.18%), living with parents (17.55%) and homeowners without a mortgage (4.16%).

If you have dependents (e.g. children), you may pay a higher rate on your personal loan due to the impact on your expenses and the perceived greater risk this brings when lenders are calculating your rate.

If you have high levels of other debt (e.g. credit card debt), you will likely pay a higher rate than someone with lower levels of debt.

Unless otherwise stated, personal loan comparison rates are calculated based on a loan amount of $30,000 repaid over a 5-year term. The comparison rates only apply to the examples given. Different loan 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. Check with the provider for full loan details, including rates, fees, eligibility and terms and conditions to make sure the product is right for you.

For offers from Money.com.au lending partners, we will match you with lenders and rates based on the information you provide us. This won't affect your credit score. Some lenders displayed are not current Money.com.au partners and we can't guarantee rates from a specific lender.

General information only The information on this page is general in nature and has been prepared without considering your objectives, financial situation or needs. You should consider whether the information provided and the nature of any personal loan product is suitable for you and seek independent financial advice if necessary.

We are not providing you with a recommendation or suggestion about a particular personal loan. You should read the relevant disclosure statements or other offer documents before deciding whether to apply for or continue to use a particular product.

What products, features and information are shown While we make every effort to ensure all personal loans available in Australia are shown in our comparison tables, we do not guarantee that all products are included. Our product comparisons may not compare all personal loan features and attributes relevant to you.

Product information, such as interest rates, fees and charges, is subject to change without notice. We include a link to each provider on our table for you to also be able to see the relevant product information direct with the lender.

How personal loans are sorted and filtered by default Users can easily change the sort order and apply product filters to our product comparison tables. However, when you arrive on a page initially, by default personal loans are sorted by:

Our tables feature all personal loans available from lenders on our database that match the search criteria selected. Lenders do not pay to feature in our tables, nor do we earn commission if you click to visit a lender’s website. The order of the products in the table is not influenced by any commercial arrangements.

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