Monthly Lending Indicator data released by the ABS last Friday revealed fixed personal loan commitments rose 6.5% from January and 28.9% from the same period a year ago to reach almost $2.3 billion.
This increase was largely driven by a 10.8% rise month-on-month in lending for the purchase of road vehicles, given new car sales continue to remain strong.
Not since April 2016 have new personal loan commitments been this high, back then recording a total purpose of $2.318 billion.
Oliver Bladek, chief operating officer at digital non-bank lender Wisr, said currently we’re seeing people take out loans in less traditional and more tailored ways.
"In the past, personal loans were primarily used to consolidate debt however, there’s been an increase in customers accessing credit for a broader range of reasons than ever before," Mr Bladek told Savings.com.au.
"With borders reopening and society adjusting to a new way of life, consumers are feeling more confident to proceed with the purchases they put off during the pandemic, contributing to personal loan growth."
Plenti CEO Daniel Foggo echoed this sentiment noting we're seeing Australians increasingly use personal loans to help them get on with their lives, now we're moving freely.
"Also, with higher mortgage rates, consumers are realising that taking out a personal loan can save them a lot of money versus adding to their mortgage and paying higher levels of interest over a 20 or 30 year period," Mr Foggo told Savings.com.au.
ING lifts fixed interest rate to 10.99% p.a.
ING increased its fixed personal loan interest rates by up to 400 basis points across several offerings for ‘Satisfactory’, ‘Solid’, ‘Super’ and ‘Brilliant’ credit ratings.
Just over a month ago, ING took personal loan rates to the sword, decreasing rates across all offerings to advertised rates of 6.99% p.a.
Increases for personal loans from two to five years with a minimum loan value of $5,000 and a maximum of $30,000 included:
- Personal Loan - Satisfactory Credit: 400 basis point increase to 10.99% p.a. (11.14% p.a. comparison rate*)
- Personal Loan - Solid Credit: 300 basis point increase to 9.99% p.a. (10.13% p.a. comparison rate*)
- Personal Loan - Super Credit: 200 basis point increase to 8.99% p.a. (9.13% p.a. comparison rate*)
- Personal Loan - Brilliant Credit: 100 basis point increase to 7.99% p.a. (8.13% p.a. comparison rate*)
Similar increases were applied to fixed personal loan interest rates for six to seven-year loans with a minimum loan amount of $30,000 and a maximum of $60,000.
BankVic lifts variable interest rate to 9.95% p.a.
The Victorian based mutual bank tailored to first responders increased its variable personal loan interest rates by 200 basis points.
BankVic’s personal loan offering is tailored from one month to five years, with a minimum loan amount of $500 and a maximum of $60,000.
With an increase of 200 basis points the sole offering now sits at an interest rate of 9.95% (10.08% comparison rate*).
Queensland Country Bank decreases interest rate to 5.99% p.a.
Offering a personal loan for renovations, the mutual bank’s ‘Reno’ loan was slashed by 80 basis points earlier this week to 5.99% p.a. (6.87% p.a. comparison rate*).
Queensland Country Bank’s ‘Reno’ personal loan offering is tailored from one to seven years, with a minimum loan amount of $3,000 and a maximum of $50,000.
Read more: Compare renovation loan options
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In the market for a personal loan? The table below features unsecured personal loans with some of the lowest interest rates on the market.
Image by James Barker via Unsplash