Car loan, home loan and buy now, pay later demand rising in 2021

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on April 29, 2021
Car loan, home loan and buy now, pay later demand rising in 2021

After a horror show in 2020, applications for car and auto loans have seen a recovery in the first few months of this year, new data shows.

Equifax’s latest Quarterly Consumer Credit Demand Index for the March 2021 quarter shows auto loan applications rose by 3.7% compared to the previous March quarter in 2020.

That's by far a more positive change compared to the 15.3% fall Equifax recorded in September 2020 and the 2.8% quarterly drop in December. 

This follows other recent trends showing car sales and purchases are recovering, after new car sales saw record monthly declines during the early pandemic months. 

According to recent Australian Bureau of Statistics data (ABS), Spending on cars skyrocketed 31.8% to end the year, the largest increase ever recorded. 

Equifax's data shows demand for auto loans grew in every state bar Tasmania and the ACT.


In the market for a new car? The table below features car loans with some of the lowest fixed and variable interest rates on the market.

Lender
Advertised rate Comparison rate* Monthly repayment Interest TypeVehicle TypeMaximum Vehicle AgeOngoing FeeApplication FeeTotal RepaymentEarly RepaymentInstant ApprovalOnline Application

FixedNew1 yearMore details

Green Car Loan

FixedNew, Used99 yearsMore details
APPLY ONLINE
  • No extra repayment or early exit fees
  • Up to $75,000 in loan amounts
  • Funding approved within 24 hours
APPLY ONLINE
FixedNew4 yearsMore details
GET APPROVED WITHIN 24 HOURS

Car Loan (New and Dealer Used) (< 5 years)

  • Approval in 24 hours
  • Balloon options to reduce repayments
  • No ongoing fees, no discharge fee
GET APPROVED WITHIN 24 HOURS

Car Loan (New and Dealer Used) (< 5 years)

  • Approval in 24 hours
  • Balloon options to reduce repayments
  • No ongoing fees, no discharge fee
FixedNew2 yearsMore details
QUICK APPLICATION PROCESS WITH NO FEES

New Vehicle Fast Loan Low Rate

  • Quick application process and no monthly fees
  • Low fixed interest rates with terms of up to seven years
  • New car loans cover cars up to 3 years old
QUICK APPLICATION PROCESS WITH NO FEES

New Vehicle Fast Loan Low Rate

  • Quick application process and no monthly fees
  • Low fixed interest rates with terms of up to seven years
  • New car loans cover cars up to 3 years old
FixedNew1 yearMore details
No ongoing fees

Plenti Car Loan

  • Interest rates ranked in the best 20%
  • No ongoing fees
  • Can apply online
No ongoing fees

Plenti Car Loan

  • Interest rates ranked in the best 20%
  • No ongoing fees
  • Can apply online
FixedNew, Used7 yearsMore details
No ongoing fees

Plenti Car Loan (Refinance)

No ongoing fees

Rates based on a loan of $30,000 for a five-year loan term. Products sorted by advertised rate. *The Comparison rate is based on a $30,000 loan over 5 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of January 18, 2022. View disclaimer.

Overall, credit demand fell by 14%, despite some categories recording an increase in applications. 

That's still a better result than previous quarterly index figures, which recorded a 21.9% and 30% decline in December and September 2020 respectively. 

Home loan demand up nearly a quarter

Perhaps unsurprisingly given recent property market news, demand for mortgages grew 23.5% in the first three months of the year compared to the same time in 2020. 

Every state and territory recorded sizeable increases, with the smallest belonging to Victoria at 15.2% growth:

  • NT (+50.5%)
  • WA (+48.6%)
  • QLD (+33.4%)
  • ACT (+31.5%)
  • SA (+25.9%)
  • NSW (+24.5%)
  • TAS (+18.4%)
  • VIC (+15.2%)

According to Equifax General Manager Advisory and Solutions Kevin James, the market is showing a shift to asset-based lending, with mortgages and auto loans proving more popular than liabilities like credit cards and personal loans.

“Ultra-low interest rates are enticing more people into the market, but (are) also an incentive for homeowners to refinance in the quest to find a better rate,” Mr James said

Australia's median house price hit a new record high of almost $900,000 in March, and Equifax's demand index typically coincides with higher prices. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 18, 2022. View disclaimer.

Buy now, pay later sees an increase 

Buy now, pay later (BNPL) applications increased by 3.7% annually in the March 2021 quarter, despite following a 13.2% decline in the previous quarter. 

Every state except for Tasmania and Victoria saw an uptick in BNPL demand, with New South Wales seeing a 7% rise.

However, those two states still saw a recovery on the last quarter.  

  • NT (+123.5%)*
  • NSW (+7.0%)
  • SA (+6.5%)
  • QLD (+5.3%)
  • ACT (+2.8%)
  • WA (+2.0%)
  • TAS (-1.9%)
  • VIC (-1.3%)

*Low volumes. 

“Demand for BNPL continues to come from Generation Y and Generation Z, but there are signs this cohort may have reached saturation," Mr James said. 

The younger generation – Generation Z – may soon catch up as they accounted for 26% of total applications.

"The lowest share remains with the baby boomer generation, not unsurprisingly since many are in retirement."

Since December 2020, the BNPL market has seen new entrants such as Commbank BNPL and PayPal Pay in 4 to rival traditional powerhouses Afterpay and Zip

Related: Why buy now, pay later is so popular with millennials.

Personal loans, credit cards still struggling 

Every single state reported a decline in personal loan and credit card applications, which fell by 14.5% and 28.9% annually in the March quarter respectively. 

These falls are smaller than the previous quarter (32.3% and 39.5%), but still mean these lending categories have now fallen for seven consecutive quarters (12 for credit cards). 

“Despite signs that the market may be moving towards post-COVID recovery, credit card demand continues to decline," Mr James said. 

"The reduced economic activity in Victoria from their second lockdown didn’t help, but ultimately a change in consumer behaviour is pushing credit cards out of favour."

Victoria recorded the lowest demand for credit cards at -30.9%, while the ACT had fewest personal loan applications (-25.4%). 


In the market for a personal loan? The table below features personal loans with some of the lowest interest rates on the market.

Lender
Advertised rate Comparison rate* Monthly repayment Interest TypeSecured TypeEarly Withdrawal FeeOngoing FeeApplication FeeTotal RepaymentEarly RepaymentInstant ApprovalOnline Application

FixedUnsecuredN/AMore details
APPLY ONLINE

Low Rate Personal Loan Unsecured (Excellent Credit)

  • No extra repayment or early exit fees
  • Up to $75,000 in loan amounts
  • Funding approved within 24 hours
APPLY ONLINE

Low Rate Personal Loan Unsecured (Excellent Credit)

  • No extra repayment or early exit fees
  • Up to $75,000 in loan amounts
  • Funding approved within 24 hours
VariableUnsecuredN/AN/AMore details
NO ONGOING FEES

Plenti Personal Loan (Excellent Credit Rating) (Variable)

  • No application fees
  • No ongoing fees
  • Apply online
NO ONGOING FEES

Plenti Personal Loan (Excellent Credit Rating) (Variable)

  • No application fees
  • No ongoing fees
  • Apply online
FixedUnsecuredN/AMore details
CHECK YOUR RATE IN 2 MINUTES
  • No ongoing fees
  • No application fees
  • Apply online
CHECK YOUR RATE IN 2 MINUTES
FixedUnsecuredN/AN/AMore details
NO ESTABLISHMENT, ACCOUNT OR EARLY REPAYMENT FEES

No Fee Personal Loan

  • No security required
  • Can apply online
  • Fast time to funding
NO ESTABLISHMENT, ACCOUNT OR EARLY REPAYMENT FEES

No Fee Personal Loan

  • No security required
  • Can apply online
  • Fast time to funding
FixedUnsecuredN/AMore details

Liberty Personal Loan (Very Good Credit History)

Rates based on a loan of $30,000 for a five-year loan term. *Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate, Rates correct as of January 18, 2022. View disclaimer.

Personal loan interest rates have seen some major decreases by big lenders recently, including Westpac and NAB, to try and entice customers back. 

For credit cards meanwhile, American Express has launched a new 'cash back' card it calls the best in the market, but the trend away from these products continues. 

Credit card debt accruing interest fell by 25% throughout 2020, and the number of cards in circulation dropped 7%. 


Photo via Flickr 

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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author-avatar
William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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