that offer cheaper personal loans and BIGGER savings in 2021?
According to Mozo’s 2019 research, in a side-by-side comparison, Big Four banks can cost borrowers up to 20% more in personal loan interest charges than client-owned banks.
But now, in 2021, it seems the big players have caught up and can be real contenders when it comes to low stakes.
For example, in 2019, if you took out an unsecured personal loan of $ 10,000 over 5 years, you could save $ 733 in total interest by simply going from the Big Four average rate of 13.40% per annum to the average rate for banks that are owned by customers at 10.99% per annum
Whereas in 2021, by taking the same loan on the same terms, you could save $ 227 on total interest, going from an average customer-owned bank rate of 10.12% per annum to an average Big Four rate of 9.35% per annum .
Contrary to two years ago, today, when moving away from the average rates, savings in interest costs can be observed after switching from own clients to the Big Four.
It’s also worth noting that the amount of savings has dropped from $ 733 to $ 227, which shows that while the personal loan market has grown in terms of options and providers, there is a greater concentration around rates.
But that doesn’t mean the Big Four definitely offers the best personal loan rates compared to customer-owned banks.
There are over 40 financial institutions in the Mozo database that qualify as customer owned; therefore, there is a broader spectrum of indicators with far more data points to the mean than the Big Four – which only has four.
With that in mind, if we’re talking about greater benefits for your buck, you can still count on customer-owned banks.
If you place an unsecured personal loan with the lowest interest rate from the customer’s bank in the Mozo – Police Bank Variable Unsecured Personal Loan database at 5.79% per annum (comparative ratio 5.92% per annum) – in addition to the lowest Big Four rate – NAB Unsecured Variable Personal Loan at 6.99% per annum (comparative rate 7.91% per annum), you will see an interest cost saving of $ 337.
With all types of lenders entering the market and offering more competitive rates, it’s a matter of shopping and finding the one that suits you best – whether it’s a large bank, a customer-owned bank, or even an online lender .
Make sure you are knowledgeable about the personal loan features that will suit your lifestyle. A great starting point is Mozo’s personal loan center for comparisons from over 70 lenders.
Check out these best low interest personal loans:
* NOTE: The comparative rate combines the lender’s interest rate, fees and commissions into a single rate to show the true cost of a personal loan. The comparative rates displayed are based on a $ 30,000 loan for 5 years or a $ 10,000 loan for 3 years as indicated based on monthly principal and interest payments, based on the secured and unsecured base for unsecured loans. This comparison indicator only applies to the example or examples provided. Different amounts and conditions will result in different comparative factors. Costs such as re-collection or early repayment fees, and cost savings such as fee waivers are not included in the comparative rate but may affect the cost of the loan.
^ See information on Mozo Experts Choice Personal Loan Awards
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