Low Interest Rate Personal Loan

Low Interest Rate Personal Loan

Many of us are taught to keep an eye out for a low interest rate personal loan when it comes to personal finance loans.

There are a number of factors to consider when shopping around for personal lending. The monthly repayment and the p.a comparison rate aren’t the only points to look into; the term length, initial fees and charges, and even the method of disbursement or loan repayment are aspects to consider before committing to a loan with a credit provider or lender.

Why the focus on interest rates, then? What makes a low interest rate personal loan attractive to borrowers?

Let’s talk about it.

Is a personal loan fixed rate or variable rate?

Your interest rate for personal loans ultimately depends on the loan you plan on getting. It’s natural to want to compare personal loan rates between the available options, whether you’re angling for secured or unsecured loans.

That said, the lending market now has several options for structuring a low interest rate personal loan that can be dizzying for a first-time borrower. Interest rates are not exempt; there are different kinds of interest that may be offered even in a single loan.

Let’s tackle two of the most common ones.

Variable rates offer low interest at high risk

Variable interest rates for personal loans are based on the federally determined prime rate established by the RBA and are a benchmark used by financing banks. A prime rate, in turn, is the recommended minimum interest rate that credit providers or lenders should offer borrowers. When you see a variable rate that says ‘prime plus 4%’, it means the interest on your low interest rate personal loan is the current prime rate, plus another 4%.

The Reserve Bank of Australia (RBA) determines the prime rate in the country, setting the new prime rate at the end of every business day. Because the prime rate changes daily, lenders each have their own way of determining which prime rate to use when you apply for a personal loan.

This type of interest rate is highly competitive and can be very tempting to borrowers; the variable interest on a private loan is typically much lower compared to fixed interest.

It is important to understand, however, that variable rates may surge exponentially due to unforeseen circumstances. If the federal bank decides that a higher prime rate is necessary to stabilise the lending market or for other economic reasons, a low variable interest rate could double with little to no warning.

Fixed rates stay the same for the rest of your loan’s life

Unless you’re refinancing your low interest rate personal loan, an unsecured fixed rate loan will have the same interest rate for its entire duration. Fixed rates are the most common loan interest due to convenience; credit providers don’t have to recalculate your dues every repayment schedule, and borrowers can reasonably expect to pay the same amount every schedule and budget around it.

Most unsecured or secured loans have fixed rates, regardless of the asset security. Speaking of which: SocietyOne’s loans for both types have a minimum loanable amount of $5,000 and a maximum of $50,000 (unsecured) or $70,000 (secured). Loan terms are available in flexible two-, three-, and five-year durations, with a seven-year option exclusive for secured loans.

Ask us about applying – email us at customer.service@societyone.com.au, or call either 1300 144 221 or 02 8397 9700, from Mondays to Fridays, 9.00 a.m. to 5.00 p.m. AEDT.

What happens if I pay a fixed rate loan early?

When it comes to your credit score, it’s not just the status of your loans that matters – the regularity of your monthly repayment dues is also accounted for. There are benefits to paying off a low interest rate personal loan early.

Benefits of paying your loan early

One key advantage to completing loans early is saving on interest. This is especially true for loans that allow advance payments in their terms and conditions. When you advance payments for your loan’s principal, you can lower either the cost of the loan or its term duration – either way, you pay less or for a shorter period.

Another key benefit is that you can apply for a new low interest rate personal loan much sooner. It shows that you’re responsible with your credit and can enhance your credit profile to lenders.

A good credit score often leads to competitive loan advantages, such as preference for housing or rental properties or better commercial credit. Completing your loans before taking on new ones is always a positive.

SocietyOne understands that you may want or need to close your loans ahead of schedule. We value the initiative of staying on top of personal credit obligations, which is why we don’t charge any early repayment fees for all of our credit offerings. We also do not require monthly fees; what is disclosed in your loan agreement is what you’re obligated to pay.

If you have any questions about what penalties we do have, fixed late payment and dishonour fees are indicated on our FAQ page. You may also enquire through email at the contact details provided above.

How can I lower the interest rate on my personal loan?

Your best chance at getting a low interest rate personal loan is by improving your credit score. Not only is it the most efficient, but it’s also the most credible. Through good credit practices, steering your credit score into better ratings is very much possible.

If you’re concerned that your credit profile is in poor shape, you can take advantage of our Credit Score tool, which allows you to pull up your credit score for free. Just click the ‘Get My Score’ button on our site. It’s that easy!

You’ll probably want to join our club as well – it’s a free service we offer to our registered clients, providing unlimited access to valuable insights and resources on handling your credit obligations and nursing your rating back to health. It’s also obligation-free, so you don’t have to commit to a low interest rate personal loan right this moment just to sign up.

SocietyOne is licenced and registered with the ASIC, and as part of the ASX-listed MONEYME Group, we also offer the opportunity to invest in loans through consumer lending. Now you can also earn through green loans, holiday loans, and other personal online loans. You can register your interest through our Invest page.

Your future personal loan with SocietyOne is just right around the corner. Sign up for an account and get your first personalised offer from us in minutes – today!