According to Mozo’s 2019 research, in a side-by-side comparison, the Big 4 banks may have cost borrowers up to 20% more in interest charges on personal loans than customer-owned banks.
But now, in 2021, it looks like the big players have caught up and could be real low rate contenders.
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 just by going from the average Big 4 rate of 13.40% per annum to the average rate. of banks owned by customers by 10.99% pa
While in 2021, on the same loan with the same terms, you can save $ 227 in total interest by going from the average customer-owned bank rate of 10.12% per annum to the average Big 4 rate of 9.35. % per year.
Unlike two years ago, today by going out of the average rates, you can see a savings on interest charges by moving from the client’s property to the Big 4.
It is also noteworthy that the amount of savings increased from $ 733 to $ 227, which shows that although the personal loan market has increased in number of options and providers, there is a greater concentration. around rates.
But that doesn’t mean the Big 4 definitely offer the best personal loan rates compared to customer-owned banks.
There are over 40 financial institutions in the Mozo database that are considered to be client owned; therefore, there is a wider range of rates with a lot more data points on average than the Big 4 – which only has four.
With that in mind, if we are talking about better value for money, you can always count on customer-owned banks.
If you place the lowest rate unsecured personal loan of a bank owned by a customer in Mozo’s database – Police Bank Variable Unsecured Personal Loan at 5.79% pa (comparison rate of 5 , 92% pa) – in addition to the lowest rate of the Big 4 – NAB unsecured variable personal loan at 6.99% pa (compare rate of 7.91% pa), you will see an interest saving of 337% pa) $.
So, as all types of lenders enter the market and offer more competitive rates, it’s all about shopping around and finding the one that’s right for you, whether it’s a big bank, a bank owned by a customer or even an online lender.
Make sure you know the features of personal loans that will suit your lifestyle. A great place to start is the Mozo Personal Loan Center for comparisons of over 70 lenders.
Check Out These Best Low Interest Personal Loans:
^ See information on the Mozo Experts Choice Personal Loan Awards
Mozo provides general product information. We do not consider your personal goals, your financial situation or your needs, and we do not recommend any specific product to you. You should make your own decision after reading the PDS or offering literature, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we do not cover all products on the market. If you decide to request a product through our website, you will be dealing directly with the supplier of that product and not with Mozo.