Personal loans explained: rates, fees and how to compare

Personal loans fund the things that are not a car or a house: consolidating debts, medical costs, travel, weddings, renovations. They are flexible, fast, and priced across an enormous range, which makes knowing how to compare them the most valuable skill in this guide.

The shape of a personal loan

Most are unsecured: no asset backs the loan, so the rate is higher than a secured car loan and your credit profile does most of the pricing. Terms typically run 1 to 7 years, amounts from a few thousand to around $70,000 with most lenders. Fixed rates are common and lock your repayment; variable rates can move, as many borrowers noticed through the 2026 rate cycle.

Risk-based pricing, in one paragraph

Most personal lenders price each borrower individually: the advertised "from" rate belongs to applicants with excellent credit, and everyone else lands somewhere on a curve. Two people borrowing the same amount can be quoted rates many points apart. This is why comparing your actual quotes, not advertised rates, is the only comparison that means anything.

The comparison rate is your friend

Lenders must publish a comparison rate that folds mandatory fees into the interest rate for a standardised example loan. It exists precisely to stop a low headline rate hiding a fat establishment fee. When ranking offers, rank the comparison rates and read the warning attached: it is exact only for the example amount and term.

Fees that matter

• Establishment fees vary from zero to several hundred dollars, sometimes tiered by credit profile
• Monthly account fees are small numbers that compound across a term
• Early repayment fees are increasingly rare, and their absence is worth actively seeking: paying a loan off early is one of the best outcomes you can give yourself

Consolidating debts with a personal loan

Rolling cards and small debts into one loan can cut the average rate and replace juggling with a single repayment. It works when the loan rate beats the blended rate of what it replaces and, crucially, when repayments on everything are up to date going in. If they are not, talk to us before applying rather than after a knock-back.

Comparing properly

One soft-check enquiry through Loanseekers prices your profile across 70+ lenders with no credit score impact, and our repayment calculator turns any quote into a weekly number you can budget against. Apply once, to the lender that actually suits you.