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Personal Loans in Australia: What You Need to Know Before You Borrow
Personal loans are one of the most common forms of consumer credit in Australia — used for car purchases, home renovations, debt consolidation, travel and more. In 2025, rates range from around 6% p.a. for secured loans to 18%+ for unsecured loans from non-bank lenders. Understanding the true cost — including fees — is essential before committing.
Interest Rate vs Comparison Rate — What's the Difference?
The interest rate is the cost of borrowing as a percentage of the outstanding balance. The comparison rate is a standardised rate that includes fees, giving a more accurate picture of the true annual cost. Australian lenders are required to display both.
A loan advertised at 8.99% with a $400 establishment fee and $10/month ongoing fee may have a comparison rate of 11.5% or higher — significantly changing the real cost.
2025 Personal Loan Rates by Type
| Loan Type | Typical Rate Range | Best For |
|---|---|---|
| Secured (car, asset) | 6–10% p.a. | Large amounts, lower repayments |
| Unsecured personal loan | 8–15% p.a. | Flexibility, no asset required |
| Debt consolidation | 7–13% p.a. | Simplifying multiple debts |
| Credit card balance transfer | 0% intro then 19–22% | Short-term debt if paid quickly |
When Does Debt Consolidation Make Sense?
Consolidating multiple high-interest debts into a single personal loan makes sense when your new consolidated rate is meaningfully lower than your weighted average current rate. If you have $10,000 in credit card debt at 20% and a $5,000 car loan at 10%, your weighted average is about 16.7%. A personal loan at 10% would save approximately $1,000/year in interest.
Rates are indicative based on 2025 market averages. Actual rates depend on your credit profile and lender. Always compare using the comparison rate. Not financial advice.