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Understanding our personal loan interest rates

Considering a personal loan?

If you’ve got big plans but are missing the big bank balance to match, you may be considering a personal loan. However, it’s not uncommon to have some questions before applying.

You may be wondering what a personalised interest rate is. Or why your credit score matters, and if this is the case, you’ve come to the right place. Read on to learn more and discover some clever tips for comparing personal loans before you apply.

Understanding interest rates

Personal loans are a great way to fund a major life expense such as a car, wedding, or home renovation. You can also use a personal loan to consolidate existing loans or debt.

If approved for a personal loan, you'll need to repay the amount borrowed, plus interest over an agreed timeframe, usually between one and seven years. The interest is part of the cost of taking out the loan and is charged as a percentage of the total amount borrowed (i.e., the interest rate).

Comparing interest rates

It’s safe to say that most people looking for a personal loan are on the lookout for a low interest rate. You may have noticed that the advertised interest rate can vary, depending on the lender you choose and whether you’re applying for a secured or unsecured loan.


Shopping for a low interest rate is a good place to start, however there are many more ways to get a great deal on your personal loan. Learn more.

What if the advertised rate is displayed as a range?

The ‘range’ usually means that the interest rate is personalised and if you’re approved for a loan, you’ll be offered a rate within that range.

Some lenders, like us, offer personalised interest rates. What’s a personalised interest rate we hear you ask? Great question, we’ll answer that in the next section of this guide.

What is a personalised interest rate?

Unlike a standard interest rate, a personalised interest rate is based on an assessment of your individual credit score.

So, if you have an excellent credit score and a good history of repaying loans, credit cards and other bills, you’ll likely be offered a lower interest rate.

It’s worth noting, not all debt is bad. Managing credit and your financial commitments responsibly will help to give you a good credit score and increase your chances of being offered a lower interest rate.

How is a personalised interest rate calculated?
How can I get a better interest rate?
How is a personalised interest rate calculated?

The rate you are offered is calculated on your personal circumstances and credit history. A few different factors are considered, including:

  • Your credit score.
  • Information provided in your application.
  • Existing loans.
  • The loan amount and your perceived ability to repay the loan.

For tips on how to improve your credit score, to help you get a better personalised interest rate, see our ‘how to improve my credit score’.

How can I get a better interest rate?

In simple terms, the higher your credit score, the lower your interest rate will be.

If you’re feeling like your credit score could be better, don’t worry. There are many things you can do to improve your credit score and secure a better interest rate.

How to improve my credit score

How does my credit score affect my rate?

Your credit score is a number used by lenders to assess your ability to repay a loan. Your score is based on the information in your credit report, including:

  • How you've managed previous loan and credit card repayments.
  • How many loan applications you've made in the past.
  • The age of your credit file.

Credit score categories

Wondering what your credit score means? That’s where credit score categories can help you understand where you stand.

The way credit scores are categorised varies between banks and financial institutions; however, we use four credit score brackets and these are:

  • Average
  • Good
  • Great
  • Exceptional

How do I check my credit score?

Checking your credit score is easy. Simply request a copy of your credit report, which includes your credit score from Equifax (previously known as Veda) at

You’re entitled to a free credit report every three months.

You can also check your credit score with Experian Australia Credit Service at and Illion (formerly Dun & Bradstreet) at

How can I improve my credit score?

Whether you’re just starting out or have had some challenges managing credit in the past, there are many ways to improve your credit score.

Some great first steps include:

Get a clear picture of your credit

Request a copy of your credit report to get a clear picture of your credit score and the information held about you. Check for any inaccuracies or signs of identity theft as well as any unpaid balances or accounts that have gone into collections.

Once you have all the information you can make a plan to tackle any unpaid debts and reduce negative information on your credit report.

Pay your loan repayments on time

It may seem obvious but someone who has never defaulted on a loan will be considered as a lower risk (and get a lower personalised rate) than someone with a history of missed repayments or bankruptcy.

If you lead a busy life and find yourself forgetting your repayment due date, consider setting up an automatic payment. Or making smaller, more frequent payments.

Apply responsibly

Applying for multiple loans at the same time can have a negative impact on your credit score. Similarly, a history of using ‘payday lenders’ and having open accounts with debt collection agencies can also lower your credit score.

Comparing personal loans before you apply is a great way to make sure you’re applying for fewer loans – thus limiting the impact on your credit score.

Check your credit score every 12 months

You’ll keep track of your credit score and help protect yourself from identity fraud. Your credit report will show if there have been any unauthorised loan applications using your name and details.

Clever ways to save on your personal loan

When comparing personal loans, there’s more to look for than just a low interest rate. Here are some things to consider to help you keep a little extra money in your pocket.

Check the comparison rate

The comparison rate (displayed next to the interest rate) represents the true cost of the loan more accurately as it considers other fees and charges payable on the loan. Checking the comparison rate makes comparing different lenders and finding the best deal easier.


Some lenders charge an account keeping fee to manage your personal loan, on top of the interest you’re already paying. One way to keep more money in your pocket is to look for a personal loan with a $0 monthly fee.

Ability to make extra repayments

Got some spare cash? Putting it on your personal loan is a great way to save on interest and pay off your loan faster. Especially if it’s free to do so.

No penalties for early payout

Paying off a loan early should be celebrated, not punished. Check the fine print for any early pay out fees or balloon payments before you apply to save yourself from being out of pocket later.

Free redraw

While a redraw facility won’t help you save money, it will have your back when you need cash fast. It works by allowing you to quickly withdraw your extra repayments for free, because let’s face it, life happens.

Ready to apply for a Great Southern Bank Personal Loan?
Our loans come packed with features to help you save money and pay off your loan sooner.
Find out more

Personal loan tips

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Seizing the moment: a guide to personal loans

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Does applying for a personal loan affect my credit score?

Personal loans can affect your credit score in a few different ways, both positively and negatively. Here's what you need to know before you apply.

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