Variable Rate Personal Loans

Take advantage of potential drops in market rates across your loan by comparing variable interest loans with Savvy.

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, updated on October 4th, 2023       

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The features and benefits of variable rate personal loans

Competitive interest rates

With competitive low rates available on personal loans, you can secure a great personalised rate for yourself through one of our lending partners.

Borrow up to $75,000

With loan amounts ranging from as little as $2,000 all the way up to $75,000, you can borrow what you need to cover a range of expenses.

Flexible usage

Whether you need financing to buy a car, pay for your wedding and honeymoon or even to cover your pet’s medical expenses, you can do it with a personal loan.

Repay your loan over one to seven years

Borrowers have the flexibility to choose the period over which they repay their personal loan, with long- and short-term options available for varying income situations.

No security obligation

Unlike some other finance types, there’s no need for you to provide a valuable asset to serve as collateral for your loan; most are unsecured in nature.

60-second outcomes

Once you’ve landed on your lender’s application page, you can receive a response within 60 seconds and, if approved, money in your account in 24 hours.

Types of personal loan

Why compare personal loans through Savvy?

How to minimise your personal loan’s variable interest

Further variable rate personal loan questions answered

What other costs will I need to budget for on my personal loan?

There are fees that you’ll likely need to account for as part of your personal loan in addition to your interest costs, including:

  • Ongoing fees from $0 to $10
  • Application fees from $0 to $595
  • Late fees from $15 to $35
  • Early repayment fee dependant on time left on the loan (but is often not charged)
What can I use a personal loan for?

Personal loans provide financial relief for a purpose specific to you. They are broad in nature, hence the word “personal”, and that is by design in order to remain versatile across a variety of uses. Personal loans are most often used to supplement or pay for holidays, help complete household renovations or purchase a vehicle, but its uses are certainly not limited to these examples. You’ll be able to find out more information regarding what loan is right for you reading further on and speaking to potential lenders about their individual policies.

Are variable rates available to anyone?

Yes – in almost all cases, the criteria required to qualify for a variable rate loan will be the same as what you'll need to do for fixed rate financing. This means, in theory, anyone can apply for a variable rate loan.

Am I able to work out the cost of my variable rate personal loan before applying?

Yes – you can use Savvy’s personal loan repayment calculator to work out the estimated cost of financing. Because the calculator doesn’t include fees, running it with its comparison rate instead of variable rate helps give you a clearer picture of what you’ll be paying each month and overall. If you don’t have your personalised rate yet, you can add 2% to the minimum rate shown above to represent an average interest cost on your loan.

Variable Rate Personal Loans

What is a variable rate personal loan?

Variable rate personal loans are a type of personal finance whereby the attached interest rate isn’t locked in at the beginning of the loan term. This means your rate can fluctuate across your repayment period, potentially leading to different instalment costs from month to month. Your lender is likely to change its rates depending on the state of the Australian market, with the Reserve Bank of Australia (RBA) increasing or decreasing the national cash rate depending on the state of the economy and other factors such as inflation.

In terms of the loan product itself, though, this type of finance is the same as any other personal loan. The amount you can borrow (from $2,000 to $75,000), the time you can take to repay it (one to seven years) and what you can use your funds on (just about anything you like) all remain the same regardless of the type of interest rate you’ve chosen on your loan. You can compare a variety of personal loans, variable rate or otherwise, right here with Savvy and secure the best product available for your needs.

What are the pros and cons of variable rate personal loans?

There are many benefits you can take advantage of as a borrower when it comes to variable interest rate personal loans. However, in some areas, they may not be as suitable as other types of finance. The main factors to consider when deciding on whether a loan with a variable interest rate is the best option for you are:

  • Potential to save: because these interest rates are open to market movement, you can benefit from taking your loan out at the right time and saving on interest overall. If you secure your finance deal just before rates drop, you could pay less interest than you would if you opted for a fixed interest rate instead.
  • Repayment flexibility: in almost all cases, you’ll have the freedom to repay your finance agreement ahead of schedule without incurring any fees for doing so. This potentially enables you to save a substantial amount on interest across your repayment term, particularly if your rates have fallen since the start of the loan.
  • Rates may be lower than fixed: whether a lender sets their fixed or variable rates higher will provide some indication of their expectation for interest movement over the coming months and years. As such, you can secure a variable rate finance agreement at a lower rate than fixed finance if they’re expected to rise and potentially refinance it to a better rate once they start to increase.
  • Not as effective for budgeting: the main benefit fixed rates bring is that they’re locked in from the outset of the loan agreement, meaning you can be certain of the unchanging cost of your repayments months and years in advance. Because variable rates can change, budgeting around them isn’t as simple.
  • Potential to pay more: although the benefit of saving is a distinct possibility with variable interest rates on personal loans, you also run the risk of having to fork out more if rates rise. If you’re looking to take out a loan in an environment where rates are expected to rise, you’re better off taking out a fixed rate deal.
  • Fewer options available: the final factor is that, simply, there aren’t as many options available today in terms of variable rate personal finance compared to fixed. Almost all financiers, from big banks to small online lenders, offer fixed rate loans, but a far lesser number offer variable alongside them. This may mean the quality of comparison isn’t as great given that you have fewer options to choose from.

How can I compare different personal loans?

The type of interest rate applied to personal loans isn’t the only major aspect to consider when comparing different offers. There’s a range of different factors which should be considered in the process of finding the best loan for you. Fortunately, you can compare personal loans right here with Savvy, where you can find easily accessible comparison information on the elements of each loan which matter most to you. Some of the key areas to compare when choosing your ideal personal loan are:

What the type of loan is

It’s not just unsecured finance you can take out with a variable interest rate: you can also look at secured finance if you have a car or another valuable asset which can be used as collateral for the agreement. This enables you, in most cases, to access a lower rate and borrow up to $100,000 (depending on your lender and the value of your asset). You may also be able to apply for a line of credit, which allows you to withdraw funds up to a set limit whenever you need them and only pay interest on the balance you use, albeit at a higher rate in many cases.

How high your rate is

Perhaps the most important part of your loan to get right is your interest rate. Regardless of whether it’s variable or fixed, you should try to find as low a rate as possible, as this can potentially help you save hundreds of dollars over your repayment term. For example, applying for a loan of $50,000 at a rate of 8% p.a. over five years would cost you $10,829, but opting for a 7% p.a. loan instead would save you over $1,400.

If you can borrow the amount you need

Not all lenders are willing to approve loans for the same amount. Depending on who you apply to, you might be required to borrow a minimum of $5,000 or a maximum of $50,000. However, there are lenders in the market willing to approve you for finance either above or below that mark, from as little as $2,000 up to a maximum of $75,000. Make sure you always double-check your lender’s site to be certain that they can approve you for the amount you’re looking for.

The time you can take to repay your debt

In the same way as potential loan amounts, you should also ensure that you can take as much or as little time as you need to repay your loan. While the general range is from one to seven years, different financiers will have different restrictions when it comes to how long their loans are. For instance, many will cap their terms at five years, impose minimums of up to three years or only offer a limited selection of potential loan terms, such as three, five or seven years. Make sure your lender can offer you the length of time you need to comfortably service your loan.

What the qualification criteria are

Of course, above all else, you should know whether you’ll be able to qualify for your lender’s loan offers before you commence the application process. These can differ slightly from lender to lender, but the broad strokes will remain the same regardless of who you apply to. You’ll have to meet the following general criteria:

  • You must be an Australian citizen or permanent resident (or an accepted visa holder)
  • You must be at least 18 years of age
  • You must be employed and earning a stable income of at least $20,000 annually (multiple sources are accepted)
  • You must have a positive credit history without any prior defaults or bankruptcy

Helpful personal loan guides

Still looking for the right personal loan?

Personal loans come in all shapes and sizes, so read more about the ways you can use them, as well as how they might work for you.