Personal loan rates change in April
There have been some major changes in interest rates on personal loans this month, with a few Westpac brands being the most prominent.
On April 16, St. George, Bank SA and Bank of Melbourne, owned by Westpac, all significantly increased the interest rates on their personal loans.
The unsecured fixed personal loan offered by these banks saw the interest rate increase by 150 basis points for one to five years.
Depending on the borrower’s risk profile, the minimum interest rate available is now 11.49% per annum (comparison rate of 12.57% per annum *) and the maximum is 17.40% pa (comparison rate 18.44% per year).
Related: Explanation of Risk-Based Personal Loans.
This is perhaps a surprising increase considering that Westpac recently lowered the interest rates on its own unsecured personal loans by 200 basis points to 9.99% per annum (benchmark rate of 11, 16% per year *), one of the lowest on record.
Another big bank, NAB, also followed suit, lowering interest rates on its unsecured fixed and variable personal loans by 300 basis points to a new low of just under 7% per year.
St. George, Bank SA, and Bank of Melbourne did not make the same change to their secured personal loan product, a type of loan that typically carries lower interest rates on average compared to unsecured loans.
The table below shows personal loans with some of the lowest interest rates in the market.
Plenti cuts personal loan rates
Online lender Plenti (formerly RateSetter) this week reduced various personal loan rates to 140 basis points.
On April 19, Plenti changed its entire range of personal loans to fixed and variable personal loans for different credit profiles.
The 140 basis point decrease applies to its fixed and variable “ good credit ” personal loans:
- The good credit variable personal loan now has a minimum interest rate of 8.59% per year (comparison rate 10.27% per year *)
- The good credit fixed personal loan now has a minimum interest rate of 7.49% per year (comparison rate of 9.16% per year *)
Other changes included cuts of 100 basis points in its average credit loans and 40 basis points in its “very good credit” loans.
Last week, Plenti reported strong growth in its personal loan customer base, with loan initiations in the March 2021 quarter up 120% from the same period in 2020.
Car loans increased by more than 306% for Plenti, while personal loans increased by 64%.
“The performance of personal loans has been particularly satisfactory, representing record quarterly origins and a strong return to growth after the COVID-induced lows in previous quarters,” Plenti said.
Plenti’s renewable energy loans have seen an increase of 24% per year – the lender recently introduced an interest-free product for customers borrowing for renewable energy technology like solar panels.
NRMA cuts car loans
The only other cut made by a major player this month was that of NRMA, which lowered the interest rate on its “Fast Loan – Low Rate” product for used cars by 25 basis points.
The NRMA used (fixed) car loan interest rate range is now between 6.24% per annum and 9.49% per annum (minimum comparison rate 6.94% pa *).
The table below shows some of the lowest auto loan interest rates in the market for used cars.
While these lenders may have lowered the interest rates on their personal loans, the other changes made in April were increases.
Hume Bank raised the interest rates on its secured and unsecured personal loans by 100 basis points, and the Australian Military Bank raised the interest rates on its green car and car loans by 50 basis points. his green personal loans.
Based on a market comparison of around 200 personal loan products, the average interest rate for personal loans from March to April remains virtually unchanged at around 10% per annum.
Related: What Are The Lowest Rate Personal Loans And Do You Really Need A Personal Loan?
Photo by Joss Woodhead on Unsplash
The entire market was not taken into account in the selection of the above products. Instead, a smaller part of the market has been envisioned, which includes retail products from at least the Big Four banks, the top 10 customer-owned institutions and Australia’s largest non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 client-owned institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management as of November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The largest non-bank lenders are those who (as of 2020) have more than $ 9 billion in loans and advances funded by Australia. These groups are: Resimac, Pepper, Liberty and Firstmac.
- If you click on a product link and are returned to a product or service provider’s web page, it is highly likely that a business relationship exists between that product or service provider and Savings. com.au
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*the Comparison rate is based on a loan of $ 30,000 over 5 years. Please note: this comparison rate is only true for this example and may not include all fees and charges. Different terms, fees, or other loan amounts may result in a different comparison rate.