As we move into May, not only are we starting to get closer to year end, but we have also started to see a number of significant rate changes in the personal lending arena, which we will discuss. more below.
Additionally, as mentioned in last month’s personal loan overview, this year we have seen a consistent trend among Australians to take out personal loans to help fund the cost of home improvement projects.
According to the latest publication of the ABS Lending Indicators, the value of new loan commitments for fixed-term personal loans increased by 0.2% in January, while the value of new loan commitments for “other purposes” increased by 15.8%. The value of new loan commitments for road vehicles, on the other hand, fell by 3.3%.
Personal loan interest rate changes:
When it comes to personal loan interest rates, here are some of the changes since last month’s registration:
Lower interest rates:
- OurMoneyMarket recently reduced the starting rate on its fixed auto loan by 15 basis points, bringing it down to 5.35% pa (7.05% pa benchmark *). It also reduced its reduced-rate personal loan by 89 basis points, which now stands at 5.40% per annum (7.31% per annum compared to the benchmark rate *).
- At the end of April, NAB reduced the interest rates of its Personal Loan (Variable, Unsecured) and of its Personal Loan (Fixed, Unsecured) to 6.99% pa (7.91% pa comparison rate *).
- Westpac reduced its Westpac personal loan (fixed, unsecured) by 200 basis points at the end of March, reducing it to a competitive 3-year fixed rate of 9.99% pa (11.16% pa comparison rate *), available until May 18, 2021.
Increase in interest rates:
- The Australian Military Bank recently increased rates on a range of its products by 50 basis points, including variable and fixed options on its unsecured personal loan, now by 5.85% per annum (comparison rate of 6.70% per year), and the variable starting rate on its Auto Credit which is now 4.49% pa (comparison rate of 5.40% pa).
- Hume Bank increased the fixed rates of its secured car loan and unsecured personal loan by 200 basis points to 6.95% per annum (comparison rate of 7.97% per annum *) and 10.95% per annum. year (comparison rate of 12.00% per annum *), respectively.
- The St. George Group’s special offer on its Fixed Rate Unsecured Personal Loan has officially ended, raising it 150 basis points to 11.49% pa (15.38% pa benchmark *).
Which lenders stand out?
After all of the recent rate changes, the lenders with the lowest personal loan interest rates in the Mozo database are Alex, Australian Military Bank, Credit Union SA, and Transport Mutual Credit Union.
So it seems small mutual banks and credit unions are still there if you’re looking for a more competitive rate.
What about reputable lenders?
This month we have seen a number of interest rate changes taking place among the big banks. However, keep in mind that the interest rates for personal loans from major banks are often higher than those from most competing lenders.
For example, the interest rate on ANZ’s unsecured variable personal loans is currently just under 13%, a huge jump from the lowest interest rate in the Mozo database which is at 4.15% pa.
Variable rate personal loans:
After holding the title of “Lowest Large Bank Variable Rate Personal Loan” in the Mozo database for many months, the Commonwealth Bank was kicked off the list. This comes after NAB reduced its NAB personal loan (variable, unsecured) by 5.70% basis points on April 21, 2021, bringing it down to 6.99% pa (7.91% pa comparison rate *).
At the other end of the scale, despite lowering its rates by 3 basis points at the end of September 2020, the ANZ Unsecured Variable Personal Loan continues to have the largest bank variable rate at the base of Mozo data, with its variable pa of 12.99%. interest rate (13.86% pa comparison rate *).
Fixed rate personal loans:
In terms of big bank fixed rates, Westpac has lost its place as the lowest rate in the Mozo database. Instead, the lowest big bank fixed interest rate in the Mozo database is now owned by NAB after its personal loan (fixed, unsecured) suffered a 5.70% point cut. base on April 21, 2021, reducing it to a 3-year fixed rate of 6.99% pa (7.91% pa comparison rate *).
Thanks to lower NAB rates, the highest fixed interest rate for major bank personal loan in the Mozo database is the ANZ unsecured personal loan (fixed) which offers a fixed rate of 10.50 % per year over 3 years (comparison rate of 11.38% per year *).
Personal loan rate to note in May:
Looking for more options? So check out our nifty personal loan comparison tool where you can compare heaps of personal loans right now.
^ See information on the Mozo Experts Choice Personal Loan Awards
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