Personal Loan Providers

By Polly Fleeting ·
young couple on laptop exploring personal loan providers

Gone are the days when Aussies would only borrow through the big banks, as today there are a great range of lenders from credit unions,  peer to peer players and online lenders offering personal loans with competitive rates, fees and features.

So if you want a full rundown on the who’s who of the personal loan world, simply read our roundup below.

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Personal Loan Comparison Table - page last updated October 17, 2020

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  • 6.99% p.a.to 25.69% p.a.

    7.79% p.a.to 26.65% p.a.based on $30,000
    over 5 years

    Terms from 1 to 5 years. Representative example: a 5 year $30,000 loan at 6.99% would cost $36,208.67 including fees.

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    6.95% p.a.to 19.99% p.a.

    6.95% p.a.to 19.99% p.a.based on $30,000
    over 5 years

    Terms from 1 to 5 years. Representative example: a 5 year $30,000 loan at 6.95% would cost $35,599.71 including fees.

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    6.49% p.a.to 8.99% p.a.

    6.84% p.a.to 9.34% p.a.based on $30,000
    over 5 years

    Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 6.49% would cost $35,459.64 including fees.

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  • 6.75% p.a.to 8.48% p.a.

    6.96% p.a.to 8.69% p.a.based on $30,000
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    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 6.75% would cost $35,580.23 including fees.

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  • 6.95% p.a.to 17.95% p.a.

    6.95% p.a.to 17.95% p.a.based on $10,000
    over 3 years

    Terms from 2 to 7 years. Representative example: a 3 year $10,000 loan at 6.95% would cost $11,107.53 including fees.

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Big banks

In Australia there are four major banks that provide personal loans to Australians. Here’s a bit of background info about each:

Commonwealth Bank:

This major player has a history dating back to 1912 and today is Australia’s largest bank. Under its umbrella includes Bankwest, the wealth management service Colonial First State, ASB Bank in New Zealand, online broking service CommSec and insurance provide CommInsure. When it comes to personal loans, CommBank offers both variable and fixed interest rates, as well as a personal loan specifically designed for students dubbed the Student Unsecured Personal Loan.

ANZ:

Launching in Melbourne in the 1830s, another seasoned bank is the Australia and New Zealand Banking Group. Today ANZ provides banking products across home loans, credit cards and savings accounts. With ANZ’s personal loans, you can choose between its Unsecured Personal Loan (Fixed) or Unsecured Personal Loan (Variable).

Westpac:

ANZ might be old, but Westpac takes the cake opening its doors in 1817 under the name of the Bank of New South Wales. Westpac owns a range of companies including St. George, Bank of Melbourne, BankSA and RAMS. If you want to take out a personal loan through Westpac you can choose its fixed rate Personal Loan and there’s also a student friendly loan available.

NAB:

The National Australia Bank has a reach that stretches beyond just Australia, providing financial solutions in New Zealand, Asia, the United Kingdom and the United States. Under its ownership belt include the brands of MLC, Bank of New Zealand, Yorkshire Bank and Great Western Bank. If you decide that NAB is your borrowing match, you can choose between its Personal Loan (Fixed Unsecured) or NAB Personal Loan (Variable, Unsecured).

Apart from the big four players, there are also a range of personal loan providers that also fall under the “major” category, including...

St. George:

As mentioned above, St. George is part of the Westpac group. There’s plenty of choice when it comes to its personal loan options, such as secured or unsecured personal loans that come with either a variable or fixed rate. You can compare St. George’s personal loan products here.

Bank of Melbourne:

Based in Victoria, the Bank of Melbourne has branches across Melbourne Central, Fitzroy, Richmond and Point Cook. It’s also another personal loan provider owned by Westpac. For those looking to borrow a large amount, the Bank of Melbourne has secured and unsecured personal loan options available.

Bankwest:

Another major lender to be owned by one of the big four is Bankwest, falling under the Commonwealth Bank umbrella. Bankwest’s history stretches back 120 years originally named the Agricultural Bank of Western Australia and didn’t become Bankwest until 1994. If you are after a personal loan from Bankwest, check out its Unsecured Personal Loan.

What are the benefits of a big bank?

There are several reasons you may want to take out a personal loan through a major bank.

  • Branch access: Most major banks have a larger number of branches located throughout Australia, which could be an important consideration if you would like to speak to a branch manager face to face about your personal loan options.
  • Bundling: If you’re willing to bring over your other banking products when applying for a personal loan through a big bank - e.g savings account, bank account and or credit card - then the major bank may offer you a better deal in the form of a lower rate and fees.
  • Higher borrowing amounts: Unlike smaller online lenders like credit unions and peer to peer providers, major banks usually offer borrowing limits that extend far beyond the $30,000 threshold, with some even reaching up to $100,000.

What are the cons of taking out a personal loan with a big bank?

There is one major downside of borrowing from a big bank though...

  • Higher rates and fees: Big banks have extremely high overheads, such as the cost of paying dividends to shareholders and paying for brick and mortar branches, as well as face to face staff. So to cover these costs and of course to make a profit, if you take out a loan through a major you are likely to be charged a higher interest rate and fees which could cost you thousands of dollars extra over the life of the loan.

Credit unions, mutuals and building societies

Do you like the thought of a bank owned by its customers? Then a credit union, mutual or building society could be a good borrowing option for you. Let’s start by running through some of the well known customer owned lenders downunder:

People's Choice Credit Union:

 People’s Choice is one of the biggest credit unions down under. You can choose between either a secured or unsecured loan, which both come with a fixed interest rate.

QUDOS Bank:

Another large customer owned bank is QUDOS Bank (formerly Qantas Credit Union). The credit union was originally launched in 1959, by Qantas employees with the aim of passing on better interest rates and lower fees to members. Today, when taking a personal loan out through QUDOS, there’s either the Special Secured Loan (Variable) or Unsecured Personal Loan (Variable) .

Greater Bank:

Dating back 70 years, the Greater Bank provides financial solutions to Aussie across the country. Like most of the other customer owned banks Greater Bank also lets you choose between a secured or an unsecured loan.

What are the benefits of a customer owner bank?

  • Competitive personal loan deals: As credit unions, mutuals and building societies are customer owned, you’re likely to score a far better deal than if you were to take out a personal loan through a big bank. Rather than passing profits to shareholders, customer owned banks return profits to customers in the form of lower rates and fees.

What are the cons of taking out a personal loan with a customer owner bank?

  • Membership fee: Before you’re approved for a loan through a credit union or mutual, you’ll need to pay a membership fee. But thankfully this usually isn’t too dear, sitting at around the $10 mark.

Peer to peer players

A fairly new type of provider to the personal loan scene is peer to peer lenders, or P2P for short. The traditional concept of peer to peer is when an investor lends directly to a borrower, removing the middle man of the banks from the borrowing scenario. Here are the peer to peer players offering competitive personal loan deals:

SocietyOne:

As the first peer to peer player to launch in Australia in 2012, SocietyOne is backed by a range of large businesses including Consolidated Press Holdings and News Corp, plus Westpac is an investor. Its Unsecured Personal Loan, offers one of the lowest interest rates in the personal loan market for those with an AA credit rating (e.g a high credit score).

Wisr:

Another peer to peer provider that is shaking up the personal loan world is Wisr, who launched as DirectMoney back in 2014. It also provides an unsecured personal loan option with a competitive interest rate for borrowers with a good credit rating. Its Personal Loan comes with a fixed interest rate, meaning your rate will be locked in for the life of the loan.

Plenti:

This peer to peer player comes from the UK and was also launched in Australia in 2014. Formerly RateSetter, Plenti is the only P2P lender to offer a secured option to borrowers, which means you can put up an asset such as your car as security for the loan. Plenti also has an unsecured option available.

What are the benefits of a peer to peer provider?

  • Competitive personal loan deals: Peer to peer lenders run their personal loan services entirely online. So without the cost of bricks and mortars branches, they are able to pass on better interest rates and lower fees to customers. Over the life of the loan this could save you hundreds, if not thousands of dollars.
  • Joining the social movement: The idea of “peer to peer” is all about strangers helping strangers e.g house swapping, car sharing (the list goes on!). So if you like the idea of removing the middleman and borrowing directly from investors then taking out a personal loan through a peer to peer lender could be for you.

What are the cons of taking out a personal loan with a P2P lender?

  • No branch access: Peer to peer lenders run their businesses entirely online, so if you take out a personal loan through a P2P provider, you’ll need to be completely comfortable with organising your personal loan online or over the phone.
  • Tier based interest rates: Another thing to be mindful of is P2P lenders use tier based interest rate pricing systems, which means the better your credit rating the better your interest rate and of course the worse your credit rating the higher your rate. So only apply for one of these lenders if you know your credit report is in a good shape. 

Before you decide on a personal loan provider it’s a wise idea to read reviews from customers just like you to get an idea on how they rate on everything from customer service to convenience.

*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 calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, 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.

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Polly Fleeting
Polly Fleeting
Money writer

Polly Fleeting is a personal finance writer here at Mozo, specialising in loans and credit cards. Her work is aimed at helping people find ways to make smart product choices, reduce debt and get more for their hard-earned dollars. Polly has a degree in Journalism from the University of Technology, Sydney.