If you’ve been searching for that extra bit of cash to fund your dream wedding or your next holiday overseas, chances are you’ve come across a whole range of personal loans. But with so many lenders out there, which one should you choose?
While it’s no easy feat to find your perfect match, getting cosy with one of the Big 4 Banks isn’t the way to go, according to Mozo data which shows that opting for a customer-owned bank instead could cut down 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 just by switching from the Big 4’s average rate of 13.40% p.a. to the average rate for customer-owned banks of 10.99% p.a..**
And if we’re talking about an even bigger bang for your buck, just place the lowest-rate unsecured personal loan from a customer-owned bank in Mozo’s database - 5.99% p.a. (6.20% p.a. comparison rate^^) - beside the Big 4’s average rate, and watch the total interest drop almost twofold from $3,042 to $1,597.***
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Customer-owned banks, including credit unions and mutual banks, generally offer more competitive interest rates than the Big 4 for a simple reason: since they’re are funded by members for members, any profits they make are funnelled back into the organisation instead of ending up in the hands of the investors.
The People’s Choice Credit Union’s spokesperson Stuart Symons said customers making the switch aren’t just getting a better deal - they’re also providing fuel for other banks to do better.
“More measures are being introduced by the Government to improve standards and provide fairer competition in the banking industry, but if more people switch, if more people vote with their feet, that will be the biggest catalyst for better service and better value,” Symons said.
“So if you are going to switch, let your new bank or credit union know why you have chosen them. Likewise, let the old one know why you’ve walked so they can improve as well.”
People's Choice Credit Union themselves were recognised by their members as an Aussie favourite when they won our Mozo People’s Choice Awards for Excellent Customer Service this year, alongside other customer-owned options like Bank Australia, CUA, and Heritage Bank.
So if you’re digging around for extra funds to finance your wedding, Japan trip or home renovation project, check out these personal loans from customer-owned banks offering big-bank beating interest rates.