Compare personal loans in Australia. Learn about establishment fees, repayment charges, and how to save on your next loan.
Published on 04/02/2025
By Pallav Verma
Personal Loan Comparison
Personal loans can be a financial lifeline when you need extra funds for anything from consolidating debt to funding significant purchases. However, navigating the fees and charges associated with personal loans in Australia can be daunting. With terms like "establishment fees," "early repayment fees," or "comparison rates" thrown around, it's easy to get confused.
This comprehensive guide breaks down the costs tied to personal loans, helping Australian consumers, financial advisors, and anyone seeking loans make informed financial decisions. By the end of this article, you'll confidently understand loan charges, how to compare personal loans, and strategies for minimising extra costs.
Disclaimer: This guide is for general informational purposes only and does not constitute financial advice. Consumers should review official lender terms and consult ASIC's Moneysmart website for independent financial guidance.
Personal loan fees include one-time or ongoing charges that lenders collect while granting and managing loans. These differ depending on the type of loan, your lender, and your financial history. Some fees might be obvious (like interest rates), while others may hide in fine print.
Understanding these fees is critical to ensure you’re getting the ideal deal and to prevent unexpected expenses during your repayment period.
Commonly, individuals focus on interest rates when comparing personal loans. While essential, interest rates don't tell the full story. Fees can significantly increase the overall cost of a loan, and ignoring secondary charges could mean paying far more than you initially expected.
By understanding fees, you can:
Here’s a breakdown of the most common personal loan fees, what they mean, and tips on minimising them.
What it is:
An upfront cost to process your application, including credit checks and administration. This is a one-time fee payable when your loan is approved.
Cost Range in Australia:
How to Minimise:
Some lenders waive establishment fees entirely—especially for new customers. Look for promotional offers or negotiate directly with lenders for a reduced fee.
What it is:
Recurring charges that cover loan management or account maintenance services.
Typical Cost:
While $15 may not seem like much, these small fees can accumulate over your loan term.
How to Minimise:
Find lenders offering no ongoing fees. Services like NAB’s personal loans don’t include monthly or annual charges in specific products.
What it is:
Charged when you pay off your loan earlier than the agreed term. This fee compensates lenders for the potential loss of interest income.
Cost Range:
Between AUD $20 and $300, but varies significantly for fixed-rate loans.
How to Minimise:
Before applying, check your loan agreement carefully. Many lenders no longer charge early repayment fees for variable-rate loans, but fixed-rate loans might include substantial penalties.
What it is:
Fees for repaying beyond your scheduled amount in a single instalment.
Some lenders penalise borrowers who make additional payments to accelerate their loan term.
How to Minimise:
Look for flexible repayment terms. ANZ and other lenders often allow extra repayments without penalties on specific products.
What it is:
You’ll incur a fee when you miss a scheduled payment. This serves as a penalty to encourage on-time repayments.
Cost Range:
AUD $20–$50 per missed payment.
How to Minimise:
Set up automatic payments or direct debits for your loan. Ensure sufficient funds in your account before each due date.
What it is:
Some loans with redraw facilities charge fees to withdraw extra payments you’ve made previously.
Typical Costs:
Often ranging from AUD $20–$30 per redraw.
How to Minimise:
Avoid loans that charge for redraw facilities. Many lenders now waive this fee entirely.
What it is:
Charged to cover the preparation of loan-related documents, such as credit history reports, bank reviews, or legal documentation.
Typical Costs:
How to Minimise:
Opt for lenders offering digital applications, as these typically bypass documentation fees altogether.
What it is:
Charged for verifying whether a secured asset, such as a vehicle, has any outstanding debt attached.
Cost Range:
How to Minimise:
Do your own encumbrance check through the Personal Property Securities Register (PPSR) website.
What it is:
Charged if your linked repayment account overdraws while processing a loan payment.
How to Minimise:
Monitor account balances closely. Set notifications or alerts through tools like Westpac Online Banking.
Source - Savings
Disclaimer: The information provided here is intended for general informational purposes only and does not constitute financial advice. Personal loan terms, including fees and charges, can vary significantly between lenders and may change over time. The fees mentioned are general estimates and may not cover all costs associated with a particular lender. It's essential to consult directly with financial institutions or a qualified financial advisor to obtain the most current information relevant to your specific financial situation. Always review the terms and conditions of any financial product thoroughly before making a decision.
Australia’s comparison rate is one of the most crucial tools for evaluating personal loan costs. It factors in the interest rate and most fees, providing an accurate idea of the loan’s real cost.
However, it’s worth noting that comparison rates exclude “non-standard” charges like redraw or early repayment fees. Always review product disclosure statements (PDS) for comprehensive details.
Here’s a breakdown of comparison rates for various Australian lenders in 2024:
|
Lender |
Interest Rate (From) |
Comparison Rate |
|
NAB |
8.49% p.a. |
9.88% p.a. |
|
Westpac |
6.56% p.a. |
7.61% p.a. |
|
CommBank |
6.99% p.a. |
8.15% p.a. |
Use online calculators, keeping in mind that results may not include all loan-related costs.
Sources:
Disclaimer: The above information is general in nature and does not constitute financial advice. Rates may change, and eligibility criteria apply. Consumers should review official lender terms and consult ASIC's Moneysmart website for independent financial guidance. Always verify details directly with the lender or consult a financial advisor before making any decisions.
When comparing personal loans, balance the following factors:
Comparison Platforms like Econnex offer side-by-side comparisons of fees, charges, and overall affordability.
Understanding personal loan fees is essential for navigating Australia’s financial landscape. From upfront to ongoing expenses, being mindful of these charges can significantly impact your financial position.
Before signing, compare personal loans thoroughly using interest rates, comparison rates, and fee structures. Avoid loans with excessive penalties and opt for flexible products that suit your needs.
We understand personal loans can be complex. Whether you’re a first-time borrower or exploring better options, utilise expert tools and resources like our free personal loan comparison calculator. Take charge of your financial future today.
Disclaimer: The content provided is for informational purposes only and is based on publicly available information. While efforts are made to ensure accuracy, readers should verify all details with personal loan providers or distributors. Econnex may earn a commission from selected providers when users switch plans via its platform. Not all plans or providers may be included in the comparison, and availability can vary. This blog does not constitute professional advice and should not be the sole basis for financial or energy decisions.
