Personal Loans Snapshot: May 2021

Personal Loans Snapshot: May 2021

As we enter the month of May, not only do we begin to creep closer to the end of the financial year, but we’ve also started to see a number of significant rate changes in the personal loans sphere, which we’ll touch on more below.

Additionally, as mentioned in last month’s personal loans snapshot, this year we’ve seen a steady trend in Australians taking out personal loans to help fund the cost of home renovation projects.

According to the latest ABS Lending Indicators release, the value of new loan commitments for fixed-term personal lending saw a 0.2% increase in January, while the value of new loan commitments for ‘other purposes’ went up by 15.8%. The value of new loan commitments for road vehicles on the other hand saw a 3.3% drop.

Personal loan interest rate changes:

As for personal loan interest rates, here are some of the changes that have taken place since last month’s check-in:

Interest rate cuts:

  • OurMoneyMarket recently cut 15 basis points off the starting rate of its fixed Car Loan, bringing it down to 5.35% p.a. (7.05% p.a. comparison rate*). It also slashed 89 basis points off of its Low Rate Personal Loan, which now sits at 5.40% p.a. (7.31% p.a. comparison rate*).
  • At the end of April, NAB brought the interest rates on both its Personal Loan (Variable, Unsecured) and Personal Loan (Fixed, Unsecured) down to 6.99% p.a. (7.91% p.a. comparison rate*).
  • Westpac has slashed 200 basis points off its Westpac Personal Loan (Fixed, Unsecured) at the end of March, bringing it down to a competitive 3-year fixed rate of 9.99% p.a. (11.16% p.a. comparison rate*), available until 18 May 2021.

Interest rate increases:

  • Australian Military Bank recently increased the rates on a range of its products by 50 basis points, including both the variable and fixed options on its Unsecured Personal Loan, now 5.85% p.a. (6.70% p.a. comparison rate), and the variable starting rate on its Car Loan which is now 4.49% p.a. (5.40% p.a. comparison rate).
  • Hume Bank increased the fixed rates on its Secured Car Loan and Unsecured Personal Loan by 200 basis points to 6.95% p.a. (7.97% p.a. comparison rate*) and 10.95% p.a. (12.00% p.a. comparison rate*), respectively.

Ended offers:

  • The St. George Group special offer on its fixed rate Unsecured Personal Loan has officially ended, raising it back up by 150 basis points to 11.49% p.a. (15.38% p.a. comparison rate*).

Which lenders stand out?

After all 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 that the smaller mutual banks and credit unions are still where it’s at if you’re after a more competitive rate.

How about big-name lenders?

This month we’ve seen a number of interest rate changes take place among the big banks. Although keep in mind that big bank personal loan interest rates often sit higher than most competitor lenders.

For example, ANZ’s Unsecured Variable Personal Loan interest rate currently sits just below 13%, a huge jump from the lowest interest rate in the Mozo database which sits at 4.15% p.a.

Variable rate personal loans:

After holding the title of ‘lowest big bank variable rate personal loan’ in the Mozo database for many months, the Commonwealth Bank has been bumped down the list. This comes after NAB cut 5.70% basis points off its NAB Personal Loan (Variable, Unsecured) on 21 April 2021 - bringing it down to 6.99% p.a. (7.91% p.a. comparison rate*).

At the other end of the scale, despite having dropped its rates by 3 basis points at the end of September 2020, the ANZ Unsecured Variable Personal Loan continues to have the highest big bank variable rate in the Mozo database, with its 12.99% p.a. variable interest rate (13.86% p.a. comparison rate*).

Fixed rate personal loans:

In terms of big bank fixed rates, Westpac lost its place of having the lowest rate in the Mozo database. Instead, the lowest big bank fixed interest rate in the Mozo database now belongs to NAB after its Personal Loan (Fixed, Unsecured) saw a 5.70% basis point cut on 21 April 2021,  bringing it down to a 3-year fixed rate of 6.99% p.a. (7.91% p.a. comparison rate*).

Thanks to NAB’s rate cut, the highest big bank personal loan fixed interest rate in the Mozo database is the ANZ Unsecured Personal Loan (Fixed) which offers a 10.50% p.a. 3-year fixed rate (11.38% p.a. comparison rate*).

Personal loan rates of note in May:

Compare Personal Loans today - rates updated daily

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure.
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    Unsecured Personal Loan

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Looking for more options? Then go check out our nifty personal loans comparison tool where you can compare loads of personal loans right now.

* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed 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 indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loan Awards

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