Personal Loans in 2026: Rates, Debt Consolidation and How to Compare Deals
The average personal loan interest rate in Australia is about 13.87% p.a. as at July 2026, according to Money.com.au, while borrowers with excellent credit are typically quoted closer to 10% p.a. With the RBA cash rate held at 4.35% in June 2026 after three increases earlier in the year, the gap between the cheapest and most expensive personal loans is wide — so comparing lenders before you apply could make a meaningful difference to what you pay.
What is the average personal loan rate in Australia in 2026?
The average personal loan interest rate is 13.87% p.a. as at July 2026, according to Money.com.au. For unsecured personal loans, Finder data puts the average at 10.32% p.a. for borrowers with excellent credit, as at April 2026. Across Canstar's database, unsecured personal loan rates range from about 5.76% p.a. to more than 29% p.a. as at July 2026.
That spread is the single most important thing to understand about personal loans in 2026. Two people borrowing the same amount over the same term can pay very different rates depending on their credit history, income and whether the loan is secured. The average amount Australians request when applying for a personal loan is $22,643, according to Money.com.au.
Before you apply, it may help to run the numbers through a loan repayment calculator so you know what different rates and terms mean for your budget.
Why does the RBA cash rate matter for personal loans?
The RBA cash rate is 4.35% as at July 2026. The Reserve Bank of Australia held rates steady at its June 2026 meeting after three consecutive increases earlier in the year, and the Board next meets on 11 August 2026.
The cash rate influences lenders' funding costs, so when it rises, new personal loan rates typically follow. Most personal loans in Australia are fixed-rate, which means the rate you lock in at settlement generally stays the same for the life of the loan — existing borrowers are usually unaffected by later RBA moves, but anyone applying now is doing so in a higher-rate environment than a year ago. Rates and lender pricing can change at any time.
Is a debt consolidation loan worth it in 2026?
Debt consolidation is the most common reason Australians take out a personal loan. More than half of all personal loan applications — 51.92% — are for consolidating debt, with an average loan amount of $17,407, according to Money.com.au.
The case for consolidating usually comes down to the interest-rate gap. Personal credit card debt accruing interest reached $19.4 billion as at May 2026, according to Canstar. The average credit card purchase rate is around 18.59% p.a., according to Money.com.au. If you are carrying a card balance at that rate, rolling it into a personal loan at a lower rate may reduce your interest costs and gives you a fixed end date for the debt — something a credit card never does.
Consolidation is not automatically the right move, though. If the new loan has a longer term, you could pay more interest overall even at a lower rate, and establishment or early-exit fees can eat into the savings. Our credit card calculator and how long to repay calculator can help you compare your current position against a consolidation option. Approval is subject to the lender's normal credit assessment and eligibility criteria apply.
Secured vs unsecured personal loans: what is the difference?
A secured personal loan uses an asset — typically a car or term deposit — as security, which lowers the lender's risk and usually the interest rate. An unsecured loan requires no security, so rates are typically higher and approval leans more heavily on your credit profile and income.
Most debt consolidation and general-purpose loans are unsecured. If you are borrowing for a vehicle, a secured car loan will usually price lower than an unsecured personal loan for the same amount, so it is worth checking both before you commit.
How do lenders decide your personal loan rate?
Most Australian lenders now use risk-based pricing, which means the advertised "from" rate is reserved for the strongest applicants. Borrowers with the highest credit scores were quoted an average of 9.79% p.a., while borrowers with poor credit scores were quoted an average of 25.25% p.a., according to Money.com.au.
The main factors lenders weigh are your credit score and repayment history, your income and existing debts, your employment stability, whether the loan is secured, and the loan term. Because pricing varies so much between lenders for the same applicant, the lender you choose can matter as much as your own profile.
One practical tip: always compare loans using the comparison rate, which includes most fees, rather than the headline rate alone. Our loan comparison calculator lets you put two offers side by side.
How can a broker help you compare personal loans?
Because personal loan pricing is risk-based, applying to the wrong lender can mean a higher rate — and multiple applications in a short period may affect your credit score. A finance broker like Brokio, based in Williams Landing and serving Melbourne's western suburbs including Point Cook, Tarneit and Werribee, compares options across 40+ lenders and can match your profile to lenders whose criteria you are more likely to meet before any application is lodged.
Brokio is a local mortgage and finance broker, so if your personal loan is part of a bigger picture — consolidating debt before a home loan application, for example — we can look at how the pieces fit together. All lending is subject to the lender's normal credit assessment and approval, and eligibility criteria apply.
Frequently asked questions
What credit score do I need for a personal loan in Australia?
There is no universal minimum, but your score strongly affects the rate you are offered. Borrowers with the highest credit scores were quoted an average of 9.79% p.a. while those with poor credit averaged 25.25% p.a., according to Money.com.au as at 2026. A higher score typically means more lender choice and lower rates, but approval always remains subject to each lender's credit assessment.
Can I consolidate credit card debt into a personal loan?
Yes — debt consolidation is the most common use of personal loans in Australia, making up 51.92% of applications according to Money.com.au. It may reduce your interest costs if the loan rate is lower than your card rate (the average card purchase rate is around 18.59% p.a.), but compare total costs over the full term, as a longer loan term can offset a lower rate.
Are personal loan rates fixed or variable?
Both exist, but most personal loans in Australia are fixed-rate, meaning your repayments stay the same for the loan term regardless of RBA moves. Variable-rate personal loans are less common and may offer more repayment flexibility, such as unlimited extra repayments without break costs. Which suits you depends on your circumstances.
Does using a broker cost more for a personal loan?
A broker like Brokio compares personal loan options across 40+ lenders and helps match your profile to suitable lenders before you apply, which may reduce the risk of declined applications affecting your credit file. Any costs or commissions are disclosed to you up front before you proceed, and using a broker does not guarantee approval — lending remains subject to each lender's credit assessment.
Important information
This article is general information only and is current as at July 2026. It does not take into account your objectives, financial situation or needs, and is not personal financial, credit or legal advice. Interest rates, statistics, lender policies and product features can change at any time — figures quoted are as at the dates indicated. All loan applications are subject to the lender's normal credit assessment and approval, and eligibility criteria, fees and charges apply. Consider seeking advice tailored to your situation before acting, and confirm current rates and product details directly with lenders or your broker.