Personal loans are one of the most popular ways Australians finance important expenses such as home renovations, medical bills, education, or consolidating debt. However, the biggest factor to consider before applying is the interest rate. A lower rate can save you thousands of dollars over the life of the loan, making it essential to research the best low interest personal loan options available in Australia. In 2025, with financial institutions offering more competitive deals than ever, borrowers have access to a wide range of products tailored to different needs.
Why Low Interest Personal Loans Matter
The interest rate directly impacts how much you’ll repay. For example, on a $20,000 loan over five years, a difference of just 2% in interest can mean paying several hundred dollars more or less. Low interest loans not only reduce overall costs but also make repayments more manageable, helping borrowers stay on top of their finances. This is especially important in Australia’s current economic climate, where living costs continue to rise and households are looking for ways to stretch their budgets.
Types of Personal Loans in Australia
There are two main types of personal loans: secured and unsecured. Secured loans require an asset, such as a car or savings account, as collateral. Because lenders face less risk, these loans usually come with lower interest rates. Unsecured loans don’t require collateral but often carry slightly higher rates. Many Australians choose unsecured loans for their flexibility, especially for covering urgent or short-term expenses.
Top Lenders Offering Low Interest Rates
In 2025, several Australian banks and lenders stand out for offering competitive personal loan rates:
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Commonwealth Bank (CBA): Offers fixed and variable rate personal loans with interest rates starting from around 7–8% p.a. for eligible borrowers.
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NAB (National Australia Bank): Provides unsecured personal loans with flexible repayment options and competitive rates starting near 8% p.a.
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Westpac: Known for offering lower rates to existing customers and discounts for setting up direct debit repayments.
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ANZ: Offers both secured and unsecured personal loans with variable and fixed rates, ideal for debt consolidation or larger expenses.
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Online lenders (such as Harmoney, Wisr, and SocietyOne): Often provide faster approvals and competitive rates, especially for borrowers with good credit scores.
How to Qualify for Low Interest Rates
Eligibility plays a big role in determining the interest rate you receive. Lenders assess factors like your credit score, income, employment history, and existing debts. Generally, borrowers with a high credit score and stable income are offered the lowest rates. Reducing debt before applying, paying bills on time, and improving your credit score can increase your chances of securing a low interest loan.
Fixed vs. Variable Interest Rates
When choosing a personal loan, you’ll need to decide between fixed and variable interest rates. Fixed-rate loans lock in your repayments for the entire term, providing certainty and stability. Variable rates, on the other hand, may start lower but can fluctuate depending on market conditions. Each option has its pros and cons—fixed rates are ideal for budgeting, while variable rates may save money if interest rates fall.
Loan Terms and Repayments
Low interest is important, but loan terms and repayment flexibility matter just as much. Some lenders allow extra repayments without penalties, helping you pay off the loan faster and reduce interest costs. Others offer redraw facilities, allowing you to access extra repayments if needed. Always check for fees—such as application fees, monthly account charges, or early repayment penalties—that can affect the true cost of the loan.
Online vs. Traditional Banks
Digital lenders are increasingly popular in Australia, often providing lower rates and quicker approvals compared to traditional banks. Many Australians find that online lenders like Wisr and SocietyOne offer more competitive rates for unsecured personal loans, particularly for borrowers with strong credit profiles. Traditional banks, however, remain a safer option for those who prefer face-to-face service and established reputations.
Tips for Borrowers in 2025
To find the best deal, it’s important to compare not just interest rates but also the comparison rate, which includes fees and charges. Use online calculators to estimate repayments, and consider how different loan terms affect the total amount payable. Always read the fine print, and if possible, get pre-approval to understand how much you can borrow before committing.
Final Thoughts
Low interest personal loans in Australia can provide affordable financial solutions when used wisely. By comparing lenders, understanding eligibility requirements, and considering both fixed and variable rates, borrowers can save significantly over the life of the loan. Whether you choose a traditional bank like CBA or NAB, or an online lender offering competitive deals, the key is to find a loan that balances affordability, flexibility, and convenience. With careful planning, Australians in 2025 can use low interest personal loans to achieve financial goals without unnecessary stress.