Personal Loan Comparison Guide

Personal loan comparison can be difficult if you aren’t sure how to compare lenders. Obviously, however, comparing your options is necessary for choosing the best loan product for your situation. Monzi is here to hopefully give you the tools you need to compare lenders.

Monzi is a lender-finding service. We do not offer financial advice. Consider seeking independent legal, financial, taxation or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

Why is personal loan comparison important?

It is important you compare your personal loan options. After all, making an informed decision may help you save money and get more out of your loan.

On the other hand, if you sign a loan contract that is unsuitable for your situation, you may find yourself struggling with repayments.

Initially, it may be tempting to base your decision solely off the advertised interest rate. While the interest rate is, obviously, an important aspect to the loan, there is a number of other things you should consider.

Loan comparison – interest rate

As you know, the interest rate is the percentage you pay on top of the principal. Obviously, this can have a huge impact on the total cost of your loan.

Bear in mind, interest rates may come as either fixed or variable. Naturally, fixed rates stay the same, while variable rates are subject to change.

Fees and charges

There will likely be additional charges on top of your loan outside of the interest rate. Common examples of fees include:

  • establishment or set-up fee
  • monthly fees
  • annual fees
  • dishonour fee for missed or late payments
  • early repayment fees.

The type of loan you take out will determine what kind of fees you will pay. Keep in mind, all the fees and charges associated with your loan will be included in your loan contract. If you aren’t sure why a certain charge is included in your loan, get in contact with your lender for more information.

Security

Another thing to consider during a personal loan comparison is whether you wish to attach an asset as security against your personal loan.

Attaching security reduces the level of risk for the lender. Moreover, the borrower guarantees the loan with one of their assets, like a car or motorbike. If the consumer fails to repay their loan, the lender can repossess the asset to recover their losses.

As a result, lenders often require security to be attached to loans over a certain amount, often $2,000. Although, certain lenders may be able to offer larger unsecured loans, depending on your eligibility.

Loan comparison – the lender

Another aspect you should consider when comparing personal loans is the lender themselves.

After all, certain lenders may be able to offer loans to consumers with multiple defaults on their report, while others may be able to offer large secured loans. Therefore, consider the following when comparing personal loans:

  • Amount. Does the lender offer the amount you’re looking for?
  • Eligibility. Are you eligible to apply with the lender? Moreover, is the lender willing to consider bad credit applications?
  • Terms. Is the lender flexible in their repayment terms? Are you able to choose between weekly, fortnightly or monthly repayments?
  • Licenced. Is the lender licenced to offer credit in Australia? In addition, what do the online reviews say about the credit provider?

Personal loan comparison rate

While the interest rate is important, the advertised comparison rate may be a truer reflection of the total cost of your loan.

This is because the comparison rate takes the interest rate, plus most of the fees and charges, and calculates a single percentage figure.

Consider the below example of how comparison rates are calculated.

Personal LoanInterest rateFees & chargesComparison rate
Loan A20%0.5%20.5%
Loan B20.35%0.1%20.45%

Please note, the above table is for demonstrative purposes only. Moreover, the rates and fees you might be offered by a lender may not reflect what is presented above.

Finally, please note that comparison rates for personal loans may not include all the potential fees and charges.

Personal loan comparison man holding tablet and paper

Personal loan comparison – repayment terms

The repayment term is the length of time you are afforded to settle your debt. Lenders may vary in what terms they are able to offer. Generally, personal loan repayment terms range from several months to years.

Personal loans are often interest-based. Therefore, a longer-term may result in lower regular repayments, but more paid in interest and fees over time. On the other hand, a short repayment term means higher regular repayments, but less paid in interest and fees over the term.

Usually, lenders can offer a number of repayment term options. Therefore, weigh up what is important to you before making a decision.

What is the best loan to get?

There are so many variables at play that it is nearly impossible to answer this question. After all, not only to credit providers vary greatly but so too do consumer needs and objectives.

As a result, the best personal loan is one that:

  • fulfils your needs and objectives; and
  • you are able to reasonably afford.

Moreover, lenders should not offer you loans that they know you cannot afford. This is the central idea behind the responsible lending legislation. Despite this, you should always undertake a personal loan comparison yourself.

Does Monzi offer personal loans?

No, we do not offer personal loans ourselves, but we know a heap of lenders that do.

Simply apply on our site and we’ll do our best to pair you with a potential lender. With Monzi, it’s one application and one outcome.

Finally, our network of credit providers may offer loans up to $10,000. Whether you need a fast cash loan to cover a breakdown or something a little larger to fund your travel dreams, Monzi has got you covered.

We may be able to pair you with a lender potentially offering the following:

  • Small unsecured loans from $300 to $2,000 repaid over 12 months.
  • Medium secured loans from $2,001 to $4,600 repaid over a 13 to 24 month term.
  • Large secured loans from $5,000 to $10,000 repaid over a 13 to 24 month term.

Finally, please note that every lender in our network is an individual entity. Therefore, we cannot speak on their behalf. The actual terms of your loan may, as a result, vary from what we present above.

Personal loan comparison – ready to apply?

Considering using Monzi’s lender-finder service? Great! Everything happens online; scroll up to the loan slider to begin. Alternatively, read our guide to comparing debt consolidation loans.

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Factor In

Costs

Two credit cards
Two credit cards

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Loan amount

$2,001 - $4,600

Terms

13 months

24 months

Costs

48% annual percantage rate

67.41% comparison rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Interest Rate for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months

24 months

Costs

21.24% annual percantage rate

48% comparison rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Interest Rate for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.