Average Personal Loan Rates: December 2024

Average Personal Loan Rates: December 2024 

Compare Personal Loan Rates from as low as 5.76% (advertised % Rate Per Annum) from over 80 lenders fast with our AI options tool. 

Average Personal Loan Interest Rates

Personal Interest Rates Compared

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What is the current interest rate for personal loans in Australia?

See the information above. 

If you’re asking what the current official cash rate is by the Reserve Bank of Australia (RBA) which influences the interest rates borrowers may be offered, we’ll answer it here. 

Cash Rate: 4.35% 

This number is accurate until the 18th of February 2025, on which date will be the next RBA Board Meeting and anticipated Official Cash Rate announcement.

What is a Personal Loan?

A personal loan is a type of loan for individuals for personal use. In this type of loan, you can borrow a sum of money and must pay it back in regular payments or installments over time, according to terms you agree to with the lender. Personal loans can be used to fund a range of different expenses, such as going on a vacation, funding a wedding, paying for medical or cosmetic procedures, and more.

Learn More: Personal Loans

What is an Interest Rate on a Personal Loan? 

Whenever you borrow money, you generally must also pay back interest on the amount. This is applied by a percentage rate, called an ‘interest rate.’

If you are comparing interest rates for personal loans between banks and lenders, you would be evaluating and comparing ‘Personal Interest Rates.’ This term indicates the interest rates on a personal loan product.

How do interest rates work on personal loans?

A personal loan interest rate is expressed as a percentage on the total amount you borrow.

For example, if you borrow $25,000 on an 6.57% per annum interest rate, you will need to pay back an additional $1,642.50 in interest to the lender. *Excluding potential added fees. 

What is a comparison rate on a personal loan?

As the interest rate does not encompass the total amount of additional payment borrowers need to pay on a personal loan, comparison sites also include a ‘Comparison Rate’ which include added costs such as application fees, establishment fees, ongoing account keeping fees or charges, exit or discharge fees, etc.

This can give you a clearer picture of the true cost of a personal loan. 

If the comparison rate is significantly higher than the interest rate, it may mean there are weighty ongoing costs with the loan product that you need to consider alongside the personal interest rate. 

Are personal loan interest rates going up?

While interest rates have been rising steadily from May 2022 with new hikes in the RBA Cash Rate, experts agree that it will be unlikely that rates will rise in 2025. 

Are personal loan interest rates going to go down?

Interest rates are forecasted to go down heading into 2025. Australia’s major banks; CommBank, ANZ, NAB and Westpac predict the National Cash Rate to drop in either Q1 or Q2 of 2025. Which will likely influence personal loan interest rates offered to individual borrowers.

How to get a low interest rate on a personal loan?

An excellent credit score is a calculating factor in gaining lending offers with lower interest rates. You’re entitled to a free credit report every 3 months through the credit reporting bodies (CRBS): Equifax, Experian and Illion. 

Additionally, you can compare personal loan interest rates and comparison rates before you apply. LoanOptions.Ai’s loan matching technology lets you compare personal loans and interest rates from over 80 lenders, and matches you with tailored pre-approved recommendations. All with absolutely no impact on your credit score.

Can you negotiate personal loan rates?

Yes, some lenders are willing to negotiate personal loan rates. Here are some tips about how to go about that:

• Maintain or build up a high credit score: A higher credit score gives you more leverage and access to better options. If you build up your credit score while you are already paying off a personal loan, you can negotiate with your lender and ask them to give a better interest rate. 

• Research the competition: Compare different personal loan rates particularly amongst the same types of credit score, if it's indicated. You can use your research notes as a reference to what other lenders are offering to help you target and ask for better rates. If you’re unsure what credit score bracket you fall into, you can read our guide here: ‘What is a Good Credit Score.’

• Check new offers every 2-3 years (New Customer Rates): New more competitive offers may arise in 2-3 years. If you see these offers with lower interest rates, you can bring them to your lender to negotiate a lower interest rate, or you can consider refinancing with a new financial product.

• See if you can stick with your current lender first: Try to negotiate and stick with your current lender first, which may save you from added fees. However refinancing with another lender is also an option if you’re not satisfied with the personal loan rates they present you. Refinancing to a new lender may slightly lower your credit score; however this is just in the short term and it will bounce back. 

Remember it’s important to not just look at a personal loan interest rate but comparison rates, to get a better idea of the true overall cost of borrowing.

Can you pay off a fixed rate personal loan early?

Nearly any type of loan you borrow can be paid off early.

However you may be charged a fee (flat, percentage-based, or interest-based) as a prepayment penalty. Depending on what this fee may look like, it may be better to prolong your exit. These penalties should be listed in the loan’s disclosure documentation.

Some lenders won’t apply the prepayment penalty when there is not much time or interest left on the loan.