Variable rate personal loans 'inconsistent with the market'

Consumers researching variable rate personal loans between August 2008 and October this year might have found they were not consistent with other monetary packages on the market.

The Australian cited figures from Infochoice that showed while interest rates on home loans fell by more that four per cent during this time, the levels for personal loans actually increased.

Variable rates on a secured personal loan grew by an average of 0.77 per cent, while the increase for unsecured personal loans was 0.16 per cent.

However, the news provider noted that rates were cheaper outside the banks – especially among building societies and credit unions.

Shaun Cornelius, chief executive at Infochoice, was quoted by the website as saying: "The reduced access to funding during the global financial crisis has had a marked impact on the personal loan market."

He added that a number of organisations are no longer providing such products for the public.

Established over 15 years ago, Infochoice aims to help consumers find the best financial services for their needs.

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