Compare Fixed Rate Personal Loans - Australia

A fixed rate personal loan can be attractive because it helps provide repayment certainty. But with so much information out there, the personal loan landscape can be confusing.

We believe everyone should be able to make an informed decision about a suitable loan for their circumstances. That’s why we prepared this guide — to help you compare a range of fixed rate personal loans and find one that’s suitable for your needs.

A fixed rate personal loan can be attractive because it helps provide repayment certainty. But with so much information out there, the personal loan landscape can be confusing.

We believe everyone should be able to make an informed decision about a suitable loan for their circumstances. That’s why we prepared this guide — to help you compare a range of fixed rate personal loans and find one that’s suitable for your needs.

Fixed rate personal loans work much like other kinds of personal loan products. You apply for a personal loan and your lender will assess your ability to repay the loan with interest based on a set of lending criteria.

If approved, you can use the credit to pay for a wide variety of things, such as a wedding, holiday, car, medical treatment or home renovations. Another use for fixed rate personal loans is debt consolidation — the process of paying off several other debts with credit, so you only have a single debt to deal with. If you have numerous debts with high interest rates, you may even be able to reduce the total cost of those loans by repaying them with a fixed rate personal loan that has a lower interest rate.

As with most other kinds of loans, fixed rate personal loans can be either:

• Unsecured personal loans, which don’t require collateral but may have a higher fixed interest rate
• Secured personal loans, which require you to provide an asset as security, but may have a lower fixed interest rate (a fixed rate car loan is a good example of a secured, fixed rate personal loan).

The key difference with a fixed rate personal loan is that the interest rate, and repayments, are fixed for the fixed period — usually the duration of the loan.

You might decide to consider a fixed rate personal loan for a number of reasons, including:

• A fixed rate personal loan offers predictable repayments. Because the interest rate is fixed for the life of the loan, you'll know exactly how much you need to pay each month. This can make budgeting easier and help you avoid surprises down the line.
• A fixed rate personal loan can be cheaper than a credit card charging a high interest rate. Personal loans are one option for those looking to consolidate debt. Consolidating high-interest credit card debt with a fixed rate personal loan could save you money in interest charges over time. If you’re considering consolidating debts, make sure you thoroughly check all the details to make sure you will actually be better off.
• A fixed rate personal loan can be used for a variety of purposes. Whether you need to cover the cost of a wedding, home renovations, holiday, or unexpected medical bills, a fixed rate personal loan may be able to provide the funds you need.
• A fixed rate personal loan may be more cost effective than a credit card for a larger purchase, depending on the rates and terms on offer. Your credit score and other factors can also impact how much you’ll be able to borrow, and the interest rate you’re offered.
• A fixed rate personal loan may help you to improve your credit score if you make your repayments on time and in full. It can also do the opposite if you borrow beyond your means, or struggle to make repayments on time.

The answer to this question will depend on a variety of factors, including your credit score, income, and the lender you choose. Some lenders will offer fixed rate personal loans starting as low as around $1000, with maximum amounts ranging from $50,000 to $100,000 – or sometimes even more. However, the amount you’re able to borrow will depend on your individual circumstances.

Lenders will usually look at your credit score, employment history, income, expenses, and other lending criteria to determine your creditworthiness and decide how much they're willing to lend you.

It's worth noting that if you're considering a secured personal loan, which requires an asset such as a car or property as collateral, you may be able to borrow more than you would with an unsecured personal loan. This is because the lender has additional security in case you default on the loan. However, you'll need to have the asset available and be willing to use it to secure the loan.

When taking out a fixed rate personal loan, it's important to be aware of the various fees that may be charged. These fees can add up, and you’ll need to factor them into your budget if you’re going to take out a personal loan. Here are some of the common fees that you may encounter:

• Application fee. This fee can be charged when you submit an application for a personal loan. Application fees are often a one time charge and can vary between lenders.
• Ongoing fees. Some lenders may charge ongoing fees for the maintenance of your loan. This can include monthly account-keeping fees or annual fees.
• Extra repayment fee. If you decide to make additional repayments on your personal loan some lenders may charge a fee.
• Late payment fee. If you miss a repayment, your lender may charge you a late payment fee. This fee is designed to cover the cost of chasing up the missed payment. Late payment fees typically range from $10 to $50 per missed payment.
• Break fee. If you decide to pay out your loan before the end of the fixed rate period, some lenders may charge you a break fee. Break fees can be substantial, and they will vary depending on the lender and the length of the fixed rate period.

Not all lenders charge all of these fees. When comparing loans, it can be helpful to look at the fees and charges for each loan to get a better picture of the cost of the loan. It's also important to read the terms and conditions carefully to ensure that you understand all of the fees and charges associated with the loan.

The main distinctive element of a fixed rate personal loan is the way repayments are structured. You see, not only is the interest rate fixed, but the repayments are fixed as well. When you apply for your loan the lender will calculate the payments based on the term of the loan, the interest rate and the principal amount.

If you’d like an estimate of what your repayments could be with a fixed rate personal loan, MoneySmart has some helpful tools including their personal loan calculator which could help.

Just be aware, the monthly repayments and interest charges may not be the only cost you’ll need to consider. So be sure to check the loan terms and conditions for all the payment amounts, fees and terms you’ll have to abide by.

There’s no single best fixed rate personal loan in Australia, so one way to pick a suitable one for you is to compare a range of options in the context of what you need and what you want to achieve. Our main personal loan comparison page includes a guide to comparing personal loans which you can add these questions to for fixed rate personal loans:

• How much do you value the certainty of repayments? If your other expenses vary a lot throughout any given year, you might find it more appealing to know what your repayments will be at certain points throughout the year.
• How likely are you to reduce the life of the loan by paying it off early? If there’s a good chance, you might prefer to look for a loan that doesn’t penalise/limit extra repayments or charges a lower fee for paying off the loan early. Such a loan, if you can find one, could enable you to take advantage of an income increase to repay your debt sooner and thus reduce the overall cost of your loan.

Fixed rate personal loans can be a helpful option when you need a lump sum of money for a specific purpose. Some ways you can use a fixed rate personal loan in Australia include:

• Consolidating debt. If you have multiple high-interest debts, such as credit card balances or personal loans, a fixed rate personal loan can be used to consolidate your debt into a single monthly payment with a lower interest rate. This can help simplify your finances and could potentially save you money in the long run.
• Home renovations. If you’re planning to renovate your home, a fixed rate personal loan may be able to provide the funds you need to complete the project. You can use the loan to pay for materials, labour, or any other expenses associated with the renovation.
• Buying a car. A fixed rate personal loan is one of many ways you can finance the purchase of a new or used car. Other financing options for cars include dealer finance, specialist car loans and car leasing.
• Funding a special event. Whether you’re planning a wedding, a dream vacation, or another special event, a fixed rate personal loan could help provide the funds you need to make it happen.
• Covering unexpected expenses. If you have an emergency expense, such as a medical bill or car repair, a fixed rate personal loan can help cover the cost. This can be a helpful option if you don’t have an emergency fund, or if the expense exceeds the amount you have saved.
• Funding for a small business. If you’re looking to get a side hustle off the ground, or for extra capital for a small business, a fixed rate personal loan may be an option. There are also specialist business loans available for this purpose, so it’s a good idea to speak with your lender before diving in.

As with any loan, it’s important to check you can afford the loan repayments and you factor in the additional cost of interest and fees when you do your research.

The length of time it takes to get a fixed rate personal loan can vary depending on a range of factors, including the lender you choose, the complexity of your application, and how quickly you’re able to provide the required documentation.

It can take anywhere from a few hours right up to a few weeks to get approved for a fixed rate personal loan, but this timeline can vary depending on the lender you choose, the specifics of your application and the loan amount.

If you'd like to speed up the approval process, there are several steps you can take. Firstly, make sure you have all the necessary documentation ready to go, such as your income and employment details, identification documents, and proof of residence. By having all this information on hand, you can streamline the application process and reduce the likelihood of delays.

Another thing that could speed up the process is to choose a lender that offers fast approval times. Many online lenders in Australia advertise fast approval times, so this may be a good option if you’re looking for quick approval.

Once you have been approved for a fixed rate personal loan, the next step is to receive the funds. Again, the length of time it takes to receive the funds can vary depending on the lender you choose and how you opt to receive the funds.

If you opt for an electronic transfer, you may receive the funds within one to two business days.

The good news is that you can refinance a fixed rate personal loan, but there are some things you need to consider before doing so, including:

• Fees. Check whether your current loan has any early repayment fees or break fees. If it does, you will need to factor this into your decision to refinance.
• Compare with other options. Can you find a new loan with a lower interest rate and/or fees? (You can start your search with our comparison table at the top of this page.) If you can find a better deal, refinancing could save you money in the long run.
• Eligibility criteria. Make sure that you meet the eligibility criteria of potential new lenders. This could include having a good credit history, a stable income, and meeting any other specific requirements of the lender.

While refinancing can be a great way to save some money for some borrowers, be aware that refinancing a personal loan may result in you paying more interest over the life of the loan if you’re extending the loan term, even if you secure a lower rate.

Your credit score is influenced by several factors, including your payment history, credit utilisation, length of credit history, and new credit applications.
When you apply for a fixed rate personal loan, the lender will conduct a credit check, which will result in a hard inquiry on your credit report. A hard inquiry is a record of when a lender checks your credit report as part of a credit application. It's important to note that multiple hard inquiries in a short period can negatively impact your credit score.

Assuming you’re approved for a fixed rate personal loan, the way you manage your loan payments can also impact your credit score. Making timely payments on your loan will demonstrate to lenders that you are a responsible borrower, which can positively impact your credit score.

On the other hand, failing to make your loan payments on time can have a negative impact on your credit score. Late payments can result in a negative entry on your credit report. This negative entry can lower your credit score and make it more difficult to obtain credit in the future.

So, a fixed rate personal loan can impact your credit score, both positively and negatively, depending on how you use it. It's important to carefully consider whether taking out a fixed rate personal loan is the right financial decision for you. You should only borrow what you can afford to repay and ensure that you make your loan payments on time.

To assess your eligibility for a fixed rate personal loan the lender will assess your application against their lending criteria. The lender will look at a variety of factors that can include:

• Your income and assets
• Other debts or expenses
• If you’re single or have a partner and if you’re borrowing by yourself or with someone else
• Whether you have any children or other dependents
• Your credit history and credit score (a number that helps indicate how trustworthy you are when it comes to repaying debt).

Every person is unique, with different objectives, financial situation and other personal circumstances. So, because your spending habits, preferences, income situation and commitments are unique to you, we can’t tell you exactly how to pick your ultimate fixed rate personal loan. What we’ve done instead is give you some facts to help you understand how fixed rate personal loans actually work. And then we’ve laid out simple, easy-to-use questions to help you compare a range of options, so you have the tools you need to help choose a fixed rate personal loan that’s suitable for your needs.