Does the best personal loan have the lowest interest rate?

We all want tomorrow to be better than today - and most of us have a big idea in mind and know just where we’d like to start. No matter what you’re looking to plan, a personal loan can get you there faster.

The cheapest personal loan is bound to be the one with the lowest interest rate, right? Well, not necessarily.

Up-front fees, ongoing service charges and other hidden costs can make your personal loan more expensive than you bargained for. It’s also important to consider the features of your personal loan. A loan with slightly higher interest rate might allow you to make extra repayments and pay off the loan early, reducing the cost of your loan overall.

Here are some of the extra charges that could apply to your personal loan:

  • Establishment/upfront fee: You could be charged a fee when you apply for a personal loan to cover the cost of assessing your application and preparing loan documents.
  • Service fee: Monthly account keeping fees add up over time. It’s worth calculating the total cost for the life of the loan so you’re not caught by surprise.
  • Late payment fee: Your lender may charge a fee if you default on your loan or miss a payment.
  • Early repayment fee: Do you hope to pay your personal loan off sooner? Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.
  • Other fees: Check out the terms and conditions of your car loan for a full list of fees and charges.

It’s worth taking the time to understand how personal loans work. Finding the right loan for your personal circumstances will help you enjoy your tomorrows even more.

Take your pick

Whether you’re planning to complete your studies, marry in style or take to the water, a personal loan can be a great way to make your dreams come true when you don’t have enough savings to go ahead outright.

Personal  loans usually range from $5,000 to $100,000 with loan terms from one to 10 years. Interest rates can be as low as 2.99% up to 10% for secured loans, and up to 15% for unsecured loans.

The amount you can borrow depends on your financial situation, including your income, expenses and other debts. Lenders will also check out your credit history to assess whether you’re a trustworthy borrower. 

It’s helpful to research your options when deciding which type of personal loan is right for you.

Fixed or variable interest rate?

When you apply for a personal loan, you have the option to choose between a fixed or variable interest rate.

It’s important to weigh up the pros and cons of both loan types so that you can make a decision that’s safest for your financial situation.

Fixed Interest Rate

Simply put, a fixed interest rate never changes, meaning your repayments remain the same for the life of the loan.


  • You know exactly how much your repayments are each month.
  •  You can plan and budget with certainty, knowing your repayments won’t change.
  • You’re protected from future interest rate rises.

The reality is that most of us have an idea we’d like to make a reality - that will make a real difference to our lives. If you are unable to save enough to go ahead right away, one, a personal loan can help bridge the gap in your budget and keep you moving forward.

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