Some major personal loan interest rate changes occured this month, with a few Westpac brands the most high-profile.
The unsecured fixed personal loan offered by these banks saw the interest rate increased by 150 basis points for between one and five years.
Depending on the borrower's risk profile, the minimum interest rate available is now 11.49% p.a (comparison rate 12.57% p.a*) and the maximum is 17.40% p.a (comparison rate 18.44% p.a).
Related: Risk-based personal loans explained.
This is perhaps a surprising increase given Westpac recently decreased interest rates on its own unsecured personal loans by 200 basis points to 9.99% p.a (comparison rate 11.16% p.a.*), one of its lowest ever.
St. George, Bank SA and Bank of Melbourne did not make this same change to its secured personal loan product, a type of loan which generally carries lower interest rates on average compared to unsecured loans.
The table below features personal loans with some of the lowest interest rates on the market.
Plenti cuts personal loan rates
Online lender Plenti (formerly RateSetter) this week cut various personal loan rates by up to 140 basis points.
On 19 April, Plenti changed its whole personal loan suite across 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% p.a (comparison rate 10.27% p.a*)
- The good credit fixed personal loan now has a minimum interest rate of 7.49% p.a (comparison rate 9.16% p.a*)
Other changes included 100 basis point drops to its average credit loans and 40 basis point decreases to its 'very good credit' loans.
Plenti last week reported a strong growth in its personal loan customers, with loan originations in the March 2021 quarter up 120% from the same period in 2020.
Automotive lending grew by more than 306% for Plenti, while personal borrowing rose 64%.
“The personal lending performance was particularly pleasing, representing record quarterly originations and a strong return to growth following the COVID-induced lows in prior quarters,” Plenti said.
Plenti's renewable energy lending recorded a 24% yearly increase - 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 to be made by a major player this month was from NRMA, which lowered the interest rate on its 'Fast Loan - Low Rate' product for used cars by 25 basis points.
The interest rate range for NRMA's used car loan (fixed) is now between 6.24% p.a and 9.49% p.a (minimum comparison rate 6.94% p.a*).
The table below features some of the lowest car loan interest rates on the market for used cars.
While these lenders may have lowered their personal loan interest rates, the remainder of the changes made in April were increases.
Hume Bank raised the interest rates on both its secured and unsecured personal loans by 100 basis points, and Australian Military Bank upped its Green Car Loan and Green Personal Loan interest rates by 50 basis points.
Based on a market comparison of roughly 200 personal loan products, the average personal loan interest rate from March to April remains almost unchanged at about 10% p.a.
Photo by Joss Woodhead on Unsplash