If you’ve been looking for some extra cash to fund your dream wedding or your next vacation abroad, chances are you’ve come across quite a few options personal loans. But with so many lenders, which one should you choose?
While finding the perfect match is no easy feat, befriending one of the Big 4 banks is not the way to go, according to Mozo data, which shows that opting for a customer-owned bank could cut your interest costs by nearly 20 %.*
In other words, if you took out a $10,000 unsecured personal loan over 5 years, you could save $733 in total interest simply by going from the average Big 4 interest rate of 13.40% pa to the average customer-owned bank rate of 10 Change .99% pa .**
And if we’re talking about even greater value for money, just rank the lowest unsecured personal loan from a customer-owned bank in the Mozo database – 5.99% pa (6.20% pa compare rate^^) – alongside the big ones 4, and watch total interest almost double from $3,042 to $1,597.***
RELATED ARTICLE: Interest rate freeze: Big banks are not giving up on personal loans
Customer-owned banks, including credit unions and credit unions, generally offer more competitive interest rates than the Big 4 for one simple reason: because they’re funded by members for members, any profits they make are funneled back into the organization rather than ending up in the hands of investors.
the People’s Choice Credit UnionSpokesman for , Stuart Symons, said customers who make the switch not only get a better deal, but also provide fuel for other banks to do better.
“The government is introducing more measures to improve standards and ensure fairer competition in the banking industry, but more people switching, more people voting with their feet, will be the biggest catalyst for better service and value ‘, called Symons.
“So if you’re going to switch, tell your new bank or credit union why you chose them. Also let the old man know why you ran so he can improve as well.”
People’s Choice Credit Union itself was recognized as an Aussie favorite by its members when it won ours Mozo People’s Choice Awards for excellent customer service this year alongside other custom options like Bank Australia, CUA and Heritage Bank.
So if you’re looking for additional funds to fund your wedding, trip to Japan, or home renovation project, check out these personal loans from customer-owned banks that offer interest rates that beat the big banks.
Great Southern Bank – Unsecured Personal Loan
- Fixed interest from 9.89% pa (10.14% pa comparable rate^^)
- Free additional cashbacks and redraw opportunity
- No ongoing fees
For loans ranging from $5,000 to $50,000 over 1 to 7 years, look no further than CUA’s unsecured personal loan. With fixed interest rates starting at 9.89% pa (10.14% pa comparable interest rate^^), this personal loan gives you the convenience of always knowing your repayment amount. Not to mention the many flexible features, such as the ability to make free additional repayments, use a redraw function and choose between weekly, fortnightly or monthly repayments. In addition, you are completely free of ongoing fees ($175 upfront).
Heritage Bank – Low Rate Secured Personal Loan
- Variable rates from 4.69% pa (7.16% pa comparison rate^)
- Borrow up to $100,000
- Free additional cashbacks and redraw opportunity
find out more
Want to borrow a large sum of money but still get a great interest rate while you’re at it? Well, Heritage Bank’s Secured Personal Loan might be worth a look, as creditworthy borrowers can get ultra-low interest rates starting at 4.69% pa (7.16% pa benchmark rate^) on loans up to $100,000. You also have access to flexible features such as free special repayments and a redraw function. Remember, you’ll need to back the personal loan against a Heritage Bank term deposit with a bunch of savings — say, a $10,000 deposit for a $10,000 loan. Also, you need to budget for a monthly fee of $5 and an upfront payment of $200.
Want to find a cheap personal loan that suits your needs? cash register comparison chart for personal loans to compare even more options and find a great deal today.
*Calculations based on a $10,000 personal loan over 5 years, comparing the interest cost of a loan at the average major bank rate of 13.40% pa to a loan at the average consumer bank rate of 10.99% pa .
**Data and calculations as of October 18, 2019.
***Lowest rate among unsecured personal loans from any customer-owned bank in the Mozo database as of October 18, 2019 belongs to G&C Mutual Bank’s Fair Rate Personal Loan – AA Rated Borrowers (Variable). Calculations are based on a $10,000 personal loan over 5 years.
* WARNING: The Comparative Rate combines the lender’s interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparative rates shown are calculated based on a $30,000 5 year loan or a $10,000 3 year loan as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and a unsecured basis basis for unsecured loans. This comparative rate applies only to the example or examples given. Different amounts and maturities lead to different comparison rates. Costs such as redemption fees or prepayment penalties and cost savings such as fee waivers are not included in the benchmark rate but may affect borrowing costs.
^See information on the Mozo Experts Choice Personal Loan Awards
Mozo provides general product information. We do not consider your personal goals, financial situation or needs, and we do not recommend any particular product. You should make your own decision after reviewing the PDS or offering documentation or seeking independent advice.
While we pride ourselves on covering a wide range of products, we do not cover every product on the market. If you choose to apply for a product through our website, you are dealing directly with the supplier of that product and not with Mozo.