Compare Low Interest Rate Loans - Australia

When taking out a personal loan, there are many options to choose from. Loans with advertised low-interest rates can be an appealing option, but before you apply here are some key factors to consider about a low-interest rate personal loan.

To be eligible for a low-interest rate on your personal loan, you typically need to have a good or very good credit score, and in some instances, you may also need to be a homeowner.

The only way to know the interest rate you will receive on your home loan is to inquire. Some lenders will allow you the ability to obtain a quote on your loan without the application appearing on your credit file, but this is not always the case.

Be careful of making lots of personal loan and credit card enquiries in a short space of time. The lender can record A simple online enquiry on your credit file. Having lots of enquiries on your credit file can ruin your credit score because it can look as though you are getting into a lot of debt. The credit report often will not note if you were approved or declined on your loan application, and the application will remain on your file even if you do not proceed with taking out the personal loan or credit card.

The best way to know how good your credit score is to obtain a copy of your credit report. There are three key credit reporting agencies that are used by banks in Australia. These are:

• Equifax
• Experian
• Illion

You are entitled to obtain a free copy of your report once every 3 months from these agencies, or you may wish to subscribe to their services if you wish to keep a more regular eye on your credit file.

Your credit score will generally be between 0 and 1200 and will be grouped by ranking into one of 5 categories – Excellent, Very Good, Good, Average and Below Average. Several factors can affect your credit score, however, the biggest is the number of debts you have and whether you pay them on time.

If you don’t have a great credit score, don’t despair. There are still things that you can do to improve your creditworthiness. These include:

• Take a break from applying for loans and credit cards
• Avoid using pay-day lenders
• Pay your bills on time
• Pay your loans and credit cards on time
• Check your credit report for errors – if there is an incorrect default or loan application listed on your report, contact the reporting agency to get this corrected
• Monitor your credit report – identity theft can result in your credit score being reduced without your knowledge

Low-rate personal loans can be a great solution to help you get on top of your debts and become debt free quicker, but there is no guarantee that your application will be successful. To protect your credit score, investigate the eligibility criteria before applying for the loan and talk to the lender instead of applying for another loan if your interest rate is higher than expected or your loan application is rejected.

There’s no way we can tell you exactly how to pick your ultimate low-rate personal loan. Instead, we’ve given you jargon-free facts to help you understand how low-rate loans actually work. And then we’ve laid out simple, easy-to-follow questions to help compare a range of options, so you have tools to help choose a low rate personal loan that’s suitable for your needs.