A low interest personal loan can help you borrow money at a lower overall cost, making repayments more manageable and reducing the amount of interest you pay over time. Whether you’re consolidating debt, covering an unexpected expense, or funding a major purchase, choosing the right loan — not just the fastest one — can make a real difference to your financial wellbeing.
What Is a Low Interest Personal Loan?
A low interest personal loan is a loan that charges a lower interest rate compared to other personal loan options. Because interest makes up a large part of the total cost of borrowing, a lower rate generally means:
- Lower repayments
- Less interest paid over the life of the loan
Better long-term affordability
Low interest personal loans are offered by banks, credit unions, and online lenders, but rates and fees can vary widely between providers.
Key takeaway: the cheapest loan isn’t always the one with the lowest advertised rate — the total cost matters.
What types of loan providers offer low interest personal loans?
There are various types of loan providers that offer low-interest personal loans, and the right choice will depend on your circumstances.
Banks
Banks are often top of mind for many individuals seeking a personal loan, but they can be more expensive, with a higher starting interest rate than some low-cost loan providers. Banks also often have strict criteria about who they can lend money to. This means that if you have a bad credit history, you may struggle to get a loan through a bank. In contrast, finance companies and online lenders often have more discretion about who they lend money to, and some will lend to people with bad credit.
Credit unions
Credit unions are another option for low-interest personal loans. These non-profit financial institutions often provide lower interest rates to their members. Joining a credit union can be as simple as meeting certain eligibility requirements and opening a savings account.
Online lenders
Online lenders are also a popular choice for low-interest personal loans. These lenders often have streamlined application processes and can offer competitive rates due to lower overhead costs. It’s important to do your research and read reviews before choosing an online lender to ensure they are reputable and trustworthy.
How do online lenders compare with banks for personal loans?
Flexible Rates, More Approval Options, and Higher Limits
Banks often use standardised pricing and stricter lending criteria, so borrowers with non-perfect credit can be declined or offered fewer choices.
Online lenders are usually more flexible and may price loans based on your full financial picture (income, expenses, affordability), which can suit people with diverse credit histories. If the provider is also a loan broker, they can put one application in front of multiple lenders — more lenders means more chances of approval.
Borrowing limits can also be higher. Banks often cap unsecured personal loans at around $40,000 – 50,000, while some online lenders can offer up to $75,000, which helps for bigger costs like renovations, a car purchase, or debt consolidation.
How a Loan Broker Can Help You Find a Low Interest Personal Loan
Working with a loan broker can give you access to more options than applying to a single bank or lender. Instead of applying multiple times yourself, a broker:
Assesses your situation once
- Matches you with lenders that suit your circumstances
- Compares rates, fees, and loan structures
- Presents you with options so you can make an informed choice
This approach can improve your chances of approval while helping you avoid unnecessary credit checks.
The Role of Financial Advice in Choosing the Right Loan
Not all loan brokers are financial advisers. A broker who is also a licensed financial adviser must:
- Explain the pros and cons of each loan option
- Recommend solutions that align with your best interests
Prioritise affordability and long-term outcomes, not commission
If there are multiple loans available, a financial adviser is required to explain which option best supports your financial wellbeing — even if another option would earn them more.
This added layer of accountability can be especially important when comparing low interest personal loans.
Low Interest Personal Loans FAQ's
Low-interest personal loans are available from banks, credit unions, and online lenders. Banks tend to charge higher starting rates and have stricter criteria, while credit unions can provide lower rates to members. Online lenders often have competitive rates, more flexible lending criteria, and a faster application process.
Online lenders can also provide tailored interest rates and higher borrowing limits (up to $75,000 unsecured) compared to banks (often capped at $40,000 – $50,000).
Yes, it may still be possible. While banks often decline borrowers with poor credit, online lenders and finance companies have more flexible lending criteria. In some cases, debt consolidation can help reduce overall interest costs by replacing multiple high-interest loans with a single, more manageable loan.
Unsecured loans don’t require any collateral, making them accessible for many borrowers. However, if you have bad credit, you may need to provide security such as a car or property. Secured loans usually allow for larger borrowing amounts and can sometimes mean lower interest rates.
We offer most of our loans unsecured, but if you have bad credit, your loan may need to be secured by an asset such as a car.
This depends on what you can afford. Loan amounts start around $2,000 and go up to $75,000 unsecured and $150,000 secured, but we sometimes lend higher than this.
For a repayment estimate, check out our personal loan calculators.
