Could Westpac’s new personal loan offer help Aussies blast debt in 2018?
Article by Ceyda Erem
It’s day three of 2018 and for many Aussies, the ‘new year, new me’ high it still going strong. We’re chomping down on salads, lacing up our trainers and dusting off our piggy banks.
But if one of your goals for 2018 is to finally get that mountain of debt off your back, Westpac’s new unsecured personal loan offer may be the sign you’ve been looking for.
If you consolidate your debt with Westpac’s unsecured personal loan, you’ll receive a 1% p.a discount on their annual interest rate, which currently sits at 12.99%.
However, while there isn’t an Aussies alive who doesn’t love a discount in any form, it’s still worth questioning the value of this new offer.
Once the discount has been applied, the interest rate will drop to 11.99% - a rate that is still considerably higher than some bank personal loans, for instance, ANZ’s Unsecured Personal Loan at 10.99%.
And according to Mozo’s personal loan repayments calculator, a $30,000 loan with the original interest rate at 12.99% over 5 years would see a borrower pay $10,946 in interest. The same loan with the discounted 11.99% rate then brings the interest down to $10,031 - a total saving of $915.
“It’s great to see a bank sharpening their prices and encouraging Aussies to clear their debt. However, you can still get a better deal by doing your homework and shopping around on personal loans from other providers,” encouraged Mozo Data Manager, Peter Marshall.
And before you take the first step towards becoming debt-free in 2018, it’s best to understand all aspects of a personal loan before submitting an application. Here is a quick look at the pros and cons of using a personal loan for debt consolidation:
- Unlike a credit card, a personal loan offers lower interest rates
- You won’t be overwhelmed with multiple bills, as all debt is compressed into one loan
- An unsecured loan won’t demand any security, like your car
- The minimum loan term means you are unable to pay off the loan early
- Large upfront cost to take out the loan
Looking for a personal loan to get you debt-free in 2018? Check out our personal loan comparison tool.