Why smart Aussies are dumping credit cards for personal loans
04 Jul 2017
Key Points
Personal loans are now a lot cheaper than credit cards
Personal loans are much easier to pay off than credit cards
Good credit borrowers can now access rates starting below 5%
There's a quiet revolution going on in the otherwise boring world of banking: thousands of smart Aussies are cutting up their credit cards in favour of personal loans. And for very good reason, which we'll get to in a sec.
But first, back to the revolution. Personal loan borrowing is growing twice as fast in Australia as credit card debt, Mozo's analysis of the latest APRA data reveals. In fact, personal loans are fast becoming the borrowing tool of choice, particularly for those with good credit ratings.
So why are thousands of Aussies suddenly driving better borrowing deals?
1. Personal loans rates are the lowest they've been in years
While the average credit card rate is stubbornly stuck above 17%, personal loan rates are falling and have hit a new average low of 11%. Personal loans are now a vastly cheaper alternative to credit cards for big household expenses, holidays and other big ticket purchases.
2. Personal loans come with repayment plans so you can avoid decades of debt
The reason it's so easy to rack up credit card debt is that the minimum repayment is typically so low it can take decades to pay off the average balance if you're only paying the minimum each month. By contrast personal loans are designed to be paid off over a set period of your choice, commonly one to five years.
3. Good credit borrowers are being rewarded with razor sharp rates
There's a new breed of online lenders in town who are taking on the banks with rates starting from under 5% for borrowers with good credit history. The likes of RateSetter, SocietyOne and MoneyPlace offer tailored loans based on your credit record, along with fast online approvals and no nasty exit fees.
Mozo compares 186 personal loans from 43 bank and non-bank lenders. Click here to compare rates and calculate repayments, or view today's Top 10 personal loans below.
Top 10 Personal Loans - September 2017 - rates updated daily
-
Promoted
Australian Military BankAustralian Military Bank
Unsecured Personal Loan (Variable)
7.88% p.a.to 18.82% p.a.
8.72% p.a.to 20.22% p.a.based on $30,000
over 5 years$100.00upfront and $10.00/month
-
Promoted
WisrWisr
Unsecured Personal Loan (Fixed)
8.50% p.a.to 19.95% p.a.
9.36% p.a.to 20.91% p.a.based on $30,000
over 5 years$595.00upfront and $0.00/month
-
Promoted
St.GeorgeSt.George
Unsecured Personal Loan Special Offer (Variable)
11.99% p.a.to 18.99% p.a.
13.07% p.a.to 20.02% p.a.based on $30,000
over 5 years$195.00upfront and $12.00/month
-
Promoted
HSBCHSBC
Unsecured Personal Loan (Fixed)
8.50% p.a.to 16.99% p.a.
9.06% p.a.to 17.53% p.a.based on $30,000
over 5 years$150.00upfront and $5.00/month
-
Promoted
NABNAB
Personal Loan (Variable, Unsecured)
12.69% p.a.to 18.69% p.a.
13.56% p.a.to 19.53% p.a.based on $30,000
over 5 years$150.00upfront and $10.00/month
-
Promoted
ANZANZ
Unsecured Personal Loan (Fixed)
-
Promoted
CUACUA
Discount Unsecured Personal Loan (Variable)
-
Promoted
INGING
Unsecured Personal Loan (Fixed)
-
Promoted
MEME
Personal Loan (Fixed, Unsecured)
-
Promoted
RateSetterRateSetter
Unsecured Personal Loan (Fixed)
^ 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 for the amounts and terms below, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. WARNING: 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. ^ Based on $10,000 over 3 years ^^ Based on $30,000 over 5 years
More top money deals:
Still hooked on the plastic? Compare today's top credit card deals on Mozo >>
Looking to finance a new set of wheels? View our car loan comparisons >>
Saving money more your style? Compare today's top savings account rates >>
Calculate your personal loan repayments
We can show you the monthly repayment amount for a range of loans
Mozo may receive advertising fees from the financial institutions, issuers of financial or credit products and third party advice providers that are shown on this page. These fees are based on a cost per click, cost per acquisition, or a fixed fee.
