Interest Rate Ranges: How Is Your Rate Determined?

More personal and car loan providers these days are advertising their interest rates as a range. But what is a personal loan rate range, and how do you score the lower rate? 

What are interest rate ranges on personal loans?

A personal loan interest rate range is simply the minimum and maximum rates that you could possibly get on a personal loan from a specific provider.

For example, the interest rate for a personal loan product from one provider might be advertised as a range between 7.15% and 20.25%. This means that if you apply for a loan from this institution, you could be accepted for a loan at any interest rate within this range.

If you are considering a personal loan, you can compare what’s available in our comparison table below. This table is based on a loan amount of $10,000 for a 3-year loan term for borrowers located in NSW, sorted by our star ratings ( highest to lowest).

How your personal loan interest-rate is determined

The interest rate you’ll be offered will be based on how much the lender trusts you to make loan repayments on time, which is partly dependant on your credit score.

What is a credit rating/score?

Your credit rating (or credit score) is a numerical representation of your trustworthiness as a borrower. It sums up all the information on your lending, borrowing and bill-paying history into a single number. Lenders use this information to decide if lending you money is worth the risk.

A higher number means a better credit score, and a better credit score means you’re more likely to be perceived as trustworthy by lenders. A lower score, on the other hand, means that lenders may view you as risky.

Credit score bands

In Australia, there are 5 credit score bands:

  • Excellent: 833 – 1,200
  • Very Good: 726 – 832
  • Good: 622 – 725
  • Average: 510 – 621
  • Below Average: 0 – 509

Depending on what band your credit score lies in, the interest rate range available to you for a personal loan will also change.

For example, a lender might advertise the following personal loan ranges:

Category Fixed interest rate Comparison rate*
A – excellent 7.65% – 10.49% 7.75% – 11.29%
B – good 10.99% – 12.99% 12.09% – 14.11%
C – average 13.79% – 16.99% 15.07 – 18.31%
D – below average 17.99% – 20.99% 19.48 – 22.52%

The comparison rate on personal loans includes the various fees and charges on the loan in question, such as establishment fees. Read the comparison rate for more information.

Such rate ranges will differ from provider to provider.

What are the current interest rates on personal loans?

At the time of writing, the lowest interest rate on the market according to Canstar data is 4.24%, while the highest is 27.63%. Across all interest rates advertised across all personal loans on the market, the average interest rate is 10.30%. Bear in mind however that these are not the comparison rates, so it’s possible that the rates may be higher than advertised.

Considering a car loan at present? If so, be sure to view our comparison table snapshot below which features a preview of the current low rate car loans available to the market, with links direct to the providers website. Please note that this table has been formulated based on a $20,000 loan to be paid over 5 years in NSW.


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