Personal Loans Snapshot: February 2022

As we head into 2022 and reflect on how personal loan interest rates have evolved over the past few months, we have seen that several discounted interest rates have come out.

We’ve also seen the ever-growing list of soft loans available to buy green products continue to grow, with the addition of a new green car loan from MOVE Bank.

More broadly, there has been a trend in recent months for risk-based pricing to be introduced by lenders – such as ING, which has adopted the model for its loan-to-loan option.

A look at the latest release of the ABS Lending Indicators shows that fixed-term retail loan commitments (seasonally adjusted) increased by 0.7% in December 2021. Quite a drop from the 4.5% rise in personal fixed-term loans in November the month before.

In addition, the press release reported a 0.6% decline in new road vehicle loan commitments and a massive 17.4% increase in the value of new personal investment loan commitments.

Changes in interest rates on personal loans:

Here’s what’s happened recently in relation to personal loan interest rates and supply changes:

Rate cuts:

  • As the only lender to make changes to personal loan rates since our last update, Hume Bank has reduced its fixed secured personal loan option by 100 basis points, bringing it down to 5.95% pa (6.16% pa comparable rate*). It has also reduced its fixed unsecured personal loan by 100 basis points, which is now at 9.95% pa (10.17% pa benchmark rate*).

Further changes:

  • Latitude has increased the application fee for both its secured and unsecured personal loans by $49 to $299.

Completed listings:

  • The Commonwealth Bank has removed its application fee waiver offer that was available to students.

Which lenders stand out?

Once again, we see that the lenders with the lowest personal loan interest rates in the Mozo database are Community First Credit Union, Alex Bank, Transport Mutual Credit Union and Credit Union SA – showing that smaller banks and credit unions are where it’s at for you is want a more competitive price.

How about reputable lenders?

Over the past month, we have not seen any major moves in interest rates on major banks’ personal loans. It’s also worth noting that the big banks’ interest rates are typically much higher than those of most competing lenders.

Currently, we see the Commonwealth Bank unsecured variable rate personal loan interest rate at just 9.00% pa, a significant jump from the lowest rate in the Mozo database of 3.99% pa

The four major variable rate personal loans:

The current lowest rate for a major bank adjustable rate personal loan in the Mozo database is the NAB Personal Loan (Adjustable Rate, Unsecured) at 6.99% pa (7.91% pa benchmark rate*).

As for the highest variable rate personal loan from a major bank in the Mozo database, that would be the Commonwealth Bank Unsecured Variable Personal Loan at 11.50% pa (12.38% pa benchmark rate*).

Big 4 fixed rate personal loans:

When it comes to fixed rate personal loans, the lowest fixed rate from a major bank in the Mozo database is none other than NAB’s personal loan (fixed, unsecured), which offers a 3-year fixed rate of 6.99% pa (7.91% pa benchmark rate). *).

The highest fixed-rate major bank personal loan in the Mozo database again belongs to the Commonwealth Bank with its Unsecured Personal Loan (Fixed) with a 3-year fixed interest rate of 9.00% pa (9.90% pa comparable interest rate*) .

Important personal loan rates in February:

Looking for more personal loan options? Then take a look at our personal loan comparison tool where you can start comparing personal loan options right away!

Written by: Rhianna Dews, Personal Credit Author, February 1, 2022.

* WARNING: The Comparative Rate combines the lender’s interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparative rates shown are calculated based on a $30,000 5 year loan or a $10,000 3 year loan as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and a unsecured basis basis for unsecured loans. This comparative rate applies only to the example or examples given. Different amounts and maturities lead to different comparison rates. Costs such as redemption fees or prepayment penalties and cost savings such as fee waivers are not included in the benchmark rate but may affect borrowing costs.

^See information on the Mozo Experts Choice Personal Loan Awards

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