Big banks pricing personal loans much higher than smaller rivals



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A range of customer-owned institutions is significantly undercutting the big four banks, according to a new analysis of personal loan interest rates.

Focusing solely on personal loans, rather than car loans, the big four banks all have double-digit interest rates (see table below).

NAB offers the lowest big four personal loan interest rate, with its Variable Rate Loan starting from 10.69 per cent (comparison rate 11.58 per cent).

Lender Product Advertised rate Comparison rate
NAB Variable Rate Loan 10.69% 11.58%
Commonwealth Bank Fixed Rate Personal Loan (5 years) 11.99% 12.87%
ANZ Fixed Rate Loan 12.45% 13.32%
Westpac Unsecured Personal Loan 12.99% 14.14%

By contrast, there are various mutual banks, credit unions and building societies offering low-rate personal loans (see table below).

For example, G&C Mutual Bank’s Fair Rate Personal Loan Diamond is priced at 5.99 per cent (comparison rate 6.20 per cent).

Credit Union SA’s Special Fixed Rate Personal Loan also goes as low as 5.99 per cent (comparison rate 6.26 per cent).

Cairns Penny Savings & Loans, Community First Credit Union, IMB Bank, Newcastle Permanent Building Society, Police Bank, Queensland Country Credit Union, Regional Australia Bank and Service One all offer personal loans with a ‘6’ in front of them.

There are even lenders that offer personal loans with interest rates under 5 per cent, although these have to be connected to a home loan or a term deposit.

Lender Product Advertised rate Comparison rate
G&C Mutual Bank Fair Rate Personal Loan Diamond 5.99% 6.20%
Credit Union SA Special Fixed Rate Personal Loan 5.99% 6.26%
Community First Credit Union Home Improvement Loan 6.12% 6.39%
Cairns Penny Savings & Loans Secured Loan 6.25% 12.07%
Police Bank Green Loan 6.49% 6.63%
Newcastle Permanent Building Society Personal Loan Secured 6.69% 8.41%
Queensland Country Credit Union Reno Loan 6.79% 7.31%
Service One Eco Personal Loan Secured 6.79% 7.39%
IMB Bank Secured Personal Loan 6.89% 7.24%
Regional Australia Bank Enviro Loan 6.95% 7.83%

Please note that the cheapest home loans aren’t always the best home loans.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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