Personal Loans Snapshot: September 2021

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With spring finally here, it’s time for our personal loan market update in September 2021.

There have been a number of changes in personal loan interest rates over the past month, as well as several other changes in offering such as: B. Various application fee exemptions.

As reported in Last Month’s Snapshot, there has also been a recent trend towards risk-based pricing, with ING adopting the model for its single loan option.

According to the latest release of the ABS Lending Indicators, there was a whopping 14.2% increase in term personal loan commitments (seasonally adjusted) in July 2021. That was a massive jump from May, which saw new fixed-term loans increase by 5.6% personal loans.

The release also showed a 2.9% increase in road vehicle new commitments and a staggering 92.8% increase in the value of home investment loan commitments.

Interest rate changes for personal loans:

In terms of the personal loan interest rate and the changes in supply, the following has happened recently:

Interest rate cuts:

  • The Australian Military Bank has reduced the variable starting interest rate for applicants with excellent creditworthiness of their car loan by 50 basis points to 3.99% pa (4.86% pa comparison rate *).
  • The Community First Credit Union has lowered the floating rate on two of their loan options. Both the mortgage loan and the green loan are now at 3.99% pa (4.99% pa comparison rate *).
  • Easy Street has reduced its unsecured personal loan with a fixed interest rate by 100 basis points to 7.99% pa (comparison rate 8.26% pa *).
  • The Illawarra Credit Union cut 200 basis points of its green unsecured personal loan and 26 basis points of its green car loan package – lowering both rates to 3.99% pa (5.15% pa comparison rate *).
  • QBANK deducted 114 basis points from its discounted car loan with variable interest rates, which is now 4.85% pa (comparative interest rate 5.48% pa *).

Other changes:

  • Commonwealth Bank waived the $ 250 application fee for their unsecured personal loan until September 7, 2021

Interest rate hikes:

  • Plenti increased both the fixed and the variable interest rate of its unsecured personal loan for applicants with Excellent Credit by 95 basis points to 6.39% pa (6.39% pa comparison rate *).

Which Lenders Stand Out?

The lenders offering the lowest personal loan interest rates in the Mozo database are again Harmoney, Credit Union SA and Transport Mutual Credit Union, with the addition of Community First Credit Union following the recent round of interest rate changes.

This proves once again that the smaller banks and credit unions are the place to go if you want competitive rates.

What about big-name lenders?

Although there have been several shifts in major bank personal loan interest rates over the past few months, you should be aware that major bank interest rates are typically much higher than most competitive lenders.

For example, the Commonwealth Bank’s unsecured variable personal loan interest rate is currently just under 12% – a clear difference when compared to the lowest interest rate in the Mozo database, which is 3.99% pa

Variable Rate Big 4 Personal Loans:

The currently lowest variable interest private loan from major banks in the Mozo database is the NAB private loan (variable, unsecured) with 6.99% pa (7.91% pa comparison rate *).

The highest variable-interest personal loan from major banks in the Mozo database, on the other hand, is the Commonwealth Bank Unsecured Variable Personal Loan with 11.50% pa (12.38% pa comparison rate *).

Fixed Rate Big 4 Personal Loans:

When it comes to fixed-rate personal loans, the big bank with the lowest fixed rate in the Mozo database is NAB with their personal loan (fixed, unsecured), which has a 3-year fixed rate of 6.99% pa (7.91% pa.) offers comparison price *).

However, the highest fixed rate personal loan from major banks in the Mozo database belongs to the Commonwealth Bank with their unsecured personal loan (fixed rate), which has a 3-year fixed rate of 11.50% pa (12.38% pa comparative rate *).

Notable September Personal Loan Rates:

Written by: Rhianna Dews, Personal Loan Writer, Sep 1, 2021.

* WARNING: The Comparison Rate combines the interest rate, fees, and lender fees into a single rate to show the true cost of a personal loan. The comparison rates shown are calculated based on a loan of $ 30,000 for a term of 5 years or a loan of $ 10,000 for a term of 3 years as specified, based on monthly principal and interest payments, on a secured basis for secured loans and a unsecured basis for unsecured loans. This comparative sentence applies only to the example or examples given. Different amounts and terms lead to different comparison rates. Costs such as redemption fees or early repayment penalties as well as cost savings such as fee exemptions are not included in the comparison price, but can influence the cost of the loan.

^ See information about the Mozo Experts Choice Personal Loan Awards

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