Compare Australia's top fixed rate personal loans

A fixed interst rate is where you lock in an interest rate on a loan for an agreed-upon period of time (typically 1-5 years). The interest rate charged on your loan principal will not change in this fixed period, meaning neither will your personal loan repayments.

When it comes to fixed rate personal loans versus variable rate loans, fixed rate loans are seen as a more consistent and stable option. With a fixed interest rate, your repayments remain the same, allowing for greater stability in your household budget, as you know exactly how much you need to repay each month.

In contrast, variable interest rates on personal loans can fluctuate monthly, as determined by the lender and influenced by the Reserve Bank of Australia's cash rate. This could make budgeting challenging, as your monthly repayments may increase or decrease unexpectedly, unlike a fixed rate personal loan. 

While it's a possibility that you may benefit from reduced interest rates if the cash rate were to fall, it’s vital to remember that even though variable rates on personal loans are affected by market fluctuations, lenders often act independently of the RBA. If you’re considering a variable rate with the expectation of cash rate cuts being swiftly passed on to your personal loan, you might need to be patient, as this could take longer than anticipated.

Beyond interest rates, it’s important to note that some lenders do restrict helpful features to variable loans only, so it's worth keeping this in mind when comparing these rate types. One such helpful feature that’s often missing from fixed rate loans (but may be available on a variable rate loan) is the ability to make extra payments on top of your minimum monthly repayments. 

Extra repayments can help you to pay off your personal loan sooner. Check whether this is important to you, as lenders may impose a penalty if you try to refinance or close a fixed rate loan before the expiry of the scheduled term.

These penalties are often referred to as early termination or exit fees, and are designed to compensate the lender for the interest income they would have otherwise received if the loan had continued as initially agreed.

It’s worth checking the terms and conditions of your loan thoroughly for any such fees, as they can vary significantly from lender to lender. Additionally, some lenders may also charge an administrative fee for closing your loan early.

Pros and cons of a fixed rate personal loan

When you’re looking for a good deal on a fixed rate personal loan, it makes sense to start narrowing down your available options by looking at which lenders are offering the most competitive interest rates. 

However, once you take ongoing fees and other charges into account, low interest personal loans may not actually be the cheapest options available. Low interest personal loans with high fees may end up costing more over the life of the loan than higher-interest personal loans with lower fees.

Some fees you may be charged include:

• Application fees
• Establishment fees
• Early repayment fees
• Redraw fees
• Late payment fees
• Ongoing monthly fees
• Other account keeping fees

To get a more accurate idea of a personal loan’s total cost to you, consider its comparison rate. The comparison rate is the approximate combined total of a loan's advertised interest rate and many of its fees and charges. This may help some borrowers gain a better understanding of the potential ongoing costs associated with a loan. For example, if a personal loan has a low advertised rate, but much higher comparison rate, you may assume there are costly fees involved.

Not every cost associated with a loan is included in its comparison rate, so look into additional costs, features and any benefits before making your final choice. Lenders may charge higher ongoing costs, such as an annual fee, if the personal loan includes features. If you prefer to minimise fees as much as possible, a no-frills basic personal loan may better align with your budget.

Fixed rate personal loans tend to come with costly break fees if you try to leave the fixed period early and refinance (or even pay off the loan early). However, it is still possible to refinance a fixed rate loan, but the process may be expensive. Also known as early termination or exit fees, these costs can be substantial and are designed to compensate the lender for the interest income they would lose if you break the loan early.

Before making any decisions, request a break cost calculation from your lender. This will give you a clear picture of the financial implications of breaking your fixed rate loan.

When deciding whether it may be worth it to make the switch, consider using RateCity’s personal loan switch and save calculator, and be sure to factor in all the fees and charges payable. It may be more cost effective to simply pay off the personal loan in full over the loan term than to refinance to a lower rate.

One risk when you refinance is that you can often end up extending your loan term. If you only had, say, 12 months left to repay your loan, by increasing the loan term another 2-3 years you'll end up paying thousands more in interest charges. 

Repayments on a personal loan

To demonstrate the impact of a personal loan interest rate on your overall repayments, RateCity has crunched the numbers on the total interest payable for a 5-year, $30,000 personal loan at two different interest rates. 

Personal loan interest rate comparison: impact on repayments

Source: RateCity.com.au. Note: Hypothetical example for demonstrative purposes of 5-year, $30,000 personal loan on two fixed interest rates of 7.00% and 12.00%. Does not factor in fees. 

As you can see, while a 4% difference in interest rates does not seem that significant, by paying a higher interest rate, you could end up paying $4,398 more in interest charges. 

There is no one 'best' fixed rate personal loan. The personal loan that may suit your financial situation and budget will differ from that of another customer with different needs and circumstances. 

In general, the best-fit personal loan for you and your situation is one that aligns with your current and future financial goals, charges a competitive interest rate with little to no fees, and provides the necessary loan features that you need. 

If you’ve determined that a fixed rate personal loan suits your financial situation and budget, finding a deal that matches your requirements may be simpler than you think. 

Start by comparing the offers available from different lenders using the comparison table on this page. You'll be able to filter down your personal loan preferences to easily compare options side by side, so you may easily create a shortlist.

You can even sort your results by the lowest interest rates or comparison rates, as well as the highest Real Time Rating scores to view the most competitive options first. Real Time Ratings is RateCity’s world-first rating system that ranks personal loans based on your individual requirements. Looking at the Real Time Ratings score may be one way to help you narrow down your shortlist of best personal loan options.

Simply consider using the star ratings of the products in the comparison table on this page as a guide towards which loan options may be more competitive than others. 

Each personal loan is given a score out of five, based on loan costs and flexibility. It then takes into consideration your ideal loan size, loan term, borrowing purpose and if you’re securing the loan, to give you a more tailor-made result. Unlike other comparison pages which rank their products once or twice a year, Real Time Ratings results are calculated live, so they are up to date as possible. 

There is no one fixed rate personal loan that’s the best choice for every borrower, so using RateCity’s ratings can instead help you find some of the best choices for you.

These are some of the eligibility requirements that borrowers typically need to meet in order to secure a fixed rate personal loan.