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Unsecured personal loans in Australia
If you’re looking for a loan in Australia for anything other than a home or a vehicle, chances are what you’re getting is an unsecured personal loan.
It’s a very broad category, meaning it can be hard to narrow down your options. But if you look beyond the lenders’ flashy marketing, an unsecured personal loan is a fairly straightforward product.
There are just a handful of really key factors to pay attention to when comparing them. I’ll take you through them in this guide.
What is an unsecured personal loan?
An unsecured personal loan is a fixed-term loan that does not have any security attached to it. Because there’s no need for a specific asset to be used as security, an unsecured personal loan can be used to pay for almost anything.
That’s unlike a secured personal loan (e.g. a car loan). If a loan is secured, the lender can reclaim an asset belonging to the borrower if they can’t repay the loan.
According to Money.com.au data, the most common purposes for an unsecured personal loan include, consolidating debt (57%), doing a home renovation (14%), funding medical and dental costs (6%) and paying for travel (5%).
Why are unsecured loans more expensive than secured loans?
The cost of a most loans is based on risk. The higher the risk of lending money, the more a lender will charge.
An unsecured personal loan is riskier for a lender. Because there’s no security (aka ‘collateral’) for the lender to reclaim if you default on the loan.
But it’s still possible to find low interest rates on unsecured personal loans. Finding a low rate means a lower regular repayment and less to pay in total when you calculate the overall cost of the personal loan.
Best unsecured personal loan interest rate comparison
Compare a selection of personal loan interest rates in Australia, with ranges based on the borrower's credit score and other factors. As you can see, the difference between a lender’s lowest and highest rate can be massive. This is why it's important to get personalised quotes from multiple lenders. The table is sorted by lowest comparison rate.
Harmoney | |
|---|---|
| Personal loan interest rate | 5.76% p.a. to 24.03% p.a. |
| Comparison rate* | 6.55% p.a. to 24.98% p.a. |
Plenti | |
| Personal loan interest rate | 6.57% p.a. to 24.09% p.a. |
| Comparison rate* | 6.57% p.a. to 26.28% p.a. |
NOW Finance | |
| Personal loan interest rate | 6.75% p.a. to 26.95% p.a. |
| Comparison rate* | 6.75% p.a. to 26.95% p.a. |
Pepper Money | |
| Personal loan interest rate | 6.75% p.a. to 26.95% p.a. |
| Comparison rate* | 6.75% p.a. to 26.95% p.a. |
ING | |
| Personal loan interest rate | 6.89% p.a. to 18.99% p.a. |
| Comparison rate* | 7.10% p.a. to 19.23% p.a. |
Our Money Market | |
| Personal loan interest rate | 6.57% p.a. to 18.99% p.a. |
| Comparison rate* | 7.19% p.a. to 21.78% p.a. |
Moneyplace | |
| Personal loan interest rate | 7.24% p.a. to 19.99% p.a. |
| Comparison rate* | 7.24% p.a. to 21.49% p.a. |
Liberty Financial | |
| Personal loan interest rate | 7.24% p.a. to 19.99% p.a. |
| Comparison rate* | 7.24% p.a. to 21.49% p.a. |
Bank of Melbourne | |
| Personal loan interest rate | 6.89% p.a. to 19.99% p.a. |
| Comparison rate* | 7.59% p.a. to 20.59% p.a. (variable rate): 7.81% p.a. to 20.83% p.a. (fixed rate) |
BankSA | |
| Personal loan interest rate | 6.89% p.a. to 19.99% p.a. |
| Comparison rate* | 7.59% p.a. to 20.59% p.a. (variable rate): 7.81% p.a. to 20.83% p.a. (fixed rate) |
St.George Bank | |
| Personal loan interest rate | 6.89% p.a. to 19.99% p.a. |
| Comparison rate* | 7.59% p.a. to 20.59% p.a. (variable rate): 7.81% p.a. to 20.83% p.a. (fixed rate) |
Great Southern Bank | |
| Personal loan interest rate | 7.49% p.a. to 19.99% p.a. |
| Comparison rate* | 7.74 % p.a. to 20.27% p.a. |
NAB | |
| Personal loan interest rate | 6.99% p.a. to 20.49% p.a. |
| Comparison rate* | 7.91% p.a. to 21.33% p.a. |
ANZ | |
| Personal loan interest rate | 7.49% p.a. to 19.99% p.a. |
| Comparison rate* | 8.18% p.a. to 20.58% p.a. |
G&C Mutual Bank | |
| Personal loan interest rate | 7.99% p.a. to 16.99% p.a. |
| Comparison rate* | 8.20% p.a. to 17.22% p.a. |
Society One | |
| Personal loan interest rate | 8.20% p.a. to 24.89% p.a. |
| Comparison rate* | 8.27% p.a. to 25.64% p.a. |
Westpac | |
| Personal loan interest rate | 7.99% p.a. to 20.49% p.a. |
| Comparison rate* | 9.18% p.a. to 21.61% p.a. |
Wisr | |
| Personal loan interest rate | 9.04% p.a. to 23.79% p.a. |
| Comparison rate* | 9.88% p.a. to 24.56% p.a. |
Commbank | |
| Personal loan interest rate | 8.49% p.a. to 20.49% p.a. (fixed); 8.00% p.a. to 20.00% p.a. (variable) |
| Comparison rate* | 9.88% p.a. to 21.78% p.a. (fixed); 9.40% p.a. to 21.30% p.a. (variable) |
MoneyMe | |
| Personal loan interest rate | 9.20% p.a. to 25.20% p.a. |
| Comparison rate* | 10.58% p.a. to 26.58% p.a. |
Latitude Financial | |
| Personal loan interest rate | 9.49% p.a. to 29.99% p.a. |
| Comparison rate* | 10.93% p.a. to 31.83% p.a |
Fair Go Finance | |
| Personal loan interest rate | 21.90% p.a. to 25.90% |
| Comparison rate* | 27.54% p.a. to 33.80% p.a. |
Jacaranda Finance | |
| Personal loan interest rate | 17.95% p.a. to 24.95% p.a. |
| Comparison rate* | 32.40% p.a. to 39.63% p.a. |
| Personal loan interest rate | Comparison rate* | |
|---|---|---|
Harmoney | 5.76% p.a. to 24.03% p.a. | 6.55% p.a. to 24.98% p.a. |
Plenti | 6.57% p.a. to 24.09% p.a. | 6.57% p.a. to 26.28% p.a. |
NOW Finance | 6.75% p.a. to 26.95% p.a. | 6.75% p.a. to 26.95% p.a. |
Pepper Money | 6.75% p.a. to 26.95% p.a. | 6.75% p.a. to 26.95% p.a. |
ING | 6.89% p.a. to 18.99% p.a. | 7.10% p.a. to 19.23% p.a. |
Our Money Market | 6.57% p.a. to 18.99% p.a. | 7.19% p.a. to 21.78% p.a. |
Moneyplace | 7.24% p.a. to 19.99% p.a. | 7.24% p.a. to 21.49% p.a. |
Liberty Financial | 7.24% p.a. to 19.99% p.a. | 7.24% p.a. to 21.49% p.a. |
Bank of Melbourne | 6.89% p.a. to 19.99% p.a. | 7.59% p.a. to 20.59% p.a. (variable rate): 7.81% p.a. to 20.83% p.a. (fixed rate) |
BankSA | 6.89% p.a. to 19.99% p.a. | 7.59% p.a. to 20.59% p.a. (variable rate): 7.81% p.a. to 20.83% p.a. (fixed rate) |
St.George Bank | 6.89% p.a. to 19.99% p.a. | 7.59% p.a. to 20.59% p.a. (variable rate): 7.81% p.a. to 20.83% p.a. (fixed rate) |
Great Southern Bank | 7.49% p.a. to 19.99% p.a. | 7.74 % p.a. to 20.27% p.a. |
NAB | 6.99% p.a. to 20.49% p.a. | 7.91% p.a. to 21.33% p.a. |
ANZ | 7.49% p.a. to 19.99% p.a. | 8.18% p.a. to 20.58% p.a. |
G&C Mutual Bank | 7.99% p.a. to 16.99% p.a. | 8.20% p.a. to 17.22% p.a. |
Society One | 8.20% p.a. to 24.89% p.a. | 8.27% p.a. to 25.64% p.a. |
Westpac | 7.99% p.a. to 20.49% p.a. | 9.18% p.a. to 21.61% p.a. |
Wisr | 9.04% p.a. to 23.79% p.a. | 9.88% p.a. to 24.56% p.a. |
Commbank | 8.49% p.a. to 20.49% p.a. (fixed); 8.00% p.a. to 20.00% p.a. (variable) | 9.88% p.a. to 21.78% p.a. (fixed); 9.40% p.a. to 21.30% p.a. (variable) |
MoneyMe | 9.20% p.a. to 25.20% p.a. | 10.58% p.a. to 26.58% p.a. |
Latitude Financial | 9.49% p.a. to 29.99% p.a. | 10.93% p.a. to 31.83% p.a |
Fair Go Finance | 21.90% p.a. to 25.90% | 27.54% p.a. to 33.80% p.a. |
Jacaranda Finance | 17.95% p.a. to 24.95% p.a. | 32.40% p.a. to 39.63% p.a. |
Get your unsecured personal loan rates
See what personal loan rates you actually qualify for by comparing multiple lenders at once.
GET STARTEDGET STARTEDHow to compare unsecured personal loans in Australia
To find the best unsecured personal loan for you, I generally suggest basin your comparison on four key factors.
The interest rate
Look for the lowest interest rate you’re eligible for. And remember, the lender will set your interest rate based on risk. Your credit score is a big factor here. The overall average interest rate on an unsecured personal loan in Australia in 2023 is 13.87% p.a., whereas borrowers in the top credit score bracket (853-1,200) pay 9.79% p.a. on average.
Fees
Unsecured personal loans can come with application fees, annual or monthly fees and fees if you make extra repayments or repay the loan early. Fore example, the average monthly fee on personal loans is $5. That doesn't sound like much but it adds to to $300 over a five-year loan term. There are plenty of unsecured personal loan options with $0 in fees.
Comparison rate
The personal loan comparison rate combines the interest rate with most loan fees. It’s designed to give a closer reflection of the total annual cost of the unsecured loan.
Loan term
This is simply how long you have to repay the loan. A shorter term will save you money overall, but the regular repayments will be higher. Most borrowers request a five-year term, our analysis shows.
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GET STARTEDGET STARTEDHow much money can you borrow with an unsecured personal loan?
You can borrow from $1,000 up to $50,000 with an unsecured personal loan.
Our data shows the average unsecured personal loan amount requested in 2023 is $22,643.
But remember, how much you can borrow will come down to your circumstances. The lender will consider your credit score, income and expenses when deciding how much it will lend to you.
How to qualify and apply for an unsecured personal loan
So, who can get an unsecured loan?
Well, the basic requirements are that you’re:
- Over the age of 18
- An Australian citizen or permanent resident
- Employed or have a regular source of income
- Able to afford the loan based on your other expenses
If you take our quiz, Money Matchmaker™ will match you to your available lenders.
Then, to get an unsecured personal loan you will need to:
- Submit a loan application to a lender
- Provide supporting documents like payslips, bank statements and evidence of your other debts and assets
- Sign a loan contract and agree to the terms of the loan
If you don't have access to documents like payslips, a low doc personal loan might be more suitable.
Fixed versus variable rate unsecured personal loan
It’s generally more common to have the choice of a fixed or variable interest rate on an unsecured personal loan (secured loans are usually fixed).
When deciding which is best for you, the main factor is how much you value certainty.
With a fixed rate unsecured personal loan...
- Your interest rate and repayments will not change during the loan, meaning...
- You won’t benefit if rates decrease
- You won’t need to pay more if rates go up
- You may not have as much flexibility to make extra repayments on a fixed rate loan
With a variable rate unsecured personal loan...
- Your interest rate and repayments could go up or down
- You’ll benefit if rates go down
- Your costs will increase if rates go up
- You’ll usually have more flexibility to repay the loan early
Is an unsecured personal loan a good idea?
Like any loan you need to weigh up the pros and cons of taking it out. Ultimately, the big question to ask yourself is can you comfortably afford the repayments? Both now and in the future.
You can also consider some of the other pros and cons. I’ve summarised these below.
Pros and cons of an unsecured personal loan
Pros
- Can be used for most purposes
- You don’t need to provide security
- Straightforward application process
- Flexible repayments (weekly, fortnightly, monthly)
- Usually there is an option to repay the loan early if you can afford extra repayments
Cons
- Higher interest rates than secured loans
- Lower loan amounts available
- The loan term may be shorter than a secured personal loan
- Rates can be quite high for bad credit personal loans
- Some lenders charge a fee if you repay the loan early
Unsecured personal loan FAQ
Get help from a real-life Money Matchmaker® from start to finish.
Can I buy a car with an unsecured personal loan?
Yes, you can. But generally unless the car you’re buying is over 12 years old (the maximum varies by lender), you should be eligible for a secured car loan.
This will typically be a cheaper option.
That’s just one of the factors to consider when comparing personal loans versus car loans.
Can I get an unsecured personal loan if I have bad credit?
Yes it’s possible, but bear in mind that you will most likely have a higher interest rate than a good credit borrower applying for the same unsecured personal loan.
You will also have fewer lenders to choose from as many of the bigger banks and credit unions do not offer bad credit personal loans.
On the plus side you may be able to refinance your personal loan to a lower rate later on if your credit score has improved.
How long does it take to be approved for an unsecured personal loan?
Because unsecured loans do not require you to put up an asset as collateral, the personal loan application process is usually more straightforward.
How long it takes varies depending on the lender, but in some cases it’s possible to be approved and have the loan funds paid to you within a day.
Do banks offer unsecured personal loans?
Yes, most banks offer unsecured personal loans, including the big four of Commbank, Westpac, NAB and ANZ.
But it can pay to shop around.
I’ve seen some borrowers save thousands by comparing other options, instead of simply applying for a loan with their own bank.
What happens if I can’t repay my unsecured personal loan?
With an unsecured personal loan, the lender will not be able to reclaim as asset that you own to recoup its costs.
BUT you are still responsible for the loan and the lender may have other options, including taking you to court, if you fail to make the repayments.
If you’re struggling, it’s often useful to discuss this with your lender. They may have options available to help make your repayments more manageable.
A debt consolidation loan is another common technique designed to help people manage their debt.
Shopping around for the right loan can save you thousands of dollars in interest and fees.
Personal Loans guides and resources
The great thing about personal loans is they can fund almost anything. They are perfect when you need that bit extra to cover expenses, start a project or reset your finances to get back on track.
Written by
Loans Expert
Shaun McGowan
Reviewed by
Editor
Sean Callery
AS FEATURED IN
*Information about comparison rates Comparison rates are designed to allow borrowers to understand the true cost of a loan by taking into account fees and charges, the loan amount and the term of the loan. The comparison rate is based on an unsecured fixed rate personal loan of $10,000 over 3 years. WARNING: Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.
