Personal loans can be a smarter choice for getting out of the debt trap as common alternatives such as credit cards or topping up the mortgage may be more expensive, taking years longer to pay off.

Aussie has introduced a brand new tool for consumers to quickly analyse and compare the total interest cost of various finance types to a personal loan, called the Debt Comparison Calculator.

Aussie founder and executive chairman John Symond said “We have developed the personal loan calculator to help consumers understand what the impact could be of taking on debt but then not paying it off as quickly as possible.”

Mr Symond said, “We want to assist consumers to make informed decisions about what form of debt they take on when buying a car or other “bigger ticket” purchases.
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Lending to consumers and business has slowed to the worst annual pace in 15 years despite the lowest interest rates in more than 40 years, central bank figures show.

Private sector credit rose just 0.1 per cent in March, after a flat result in February, according to figures released by the Reserve Bank of Australia (RBA) on Thursday.

The annual growth rate was 4.9 per cent, the slowest since January 1994 when total credit grew by 5.4 per cent, in seasonally adjusted terms.

The monthly data was barely in positive territory, thanks to ongoing momentum in lending by financial institutions for housing.
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The Reserve Bank of Australia (RBA) says there has been little pass-through of its recent interest rate cuts to personal loans.

“Since the end of July, average variable interest rates on unsecured personal loans and margin loans have decreased by six basis points (0.06 percentage points) and 43 basis points respectively, while rates on standard and low-rate credit cards have risen by eight basis points and 34 basis points respectively,” the RBA said in its quarterly monetary policy statement.
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Consumers are avoiding personal loans and staying with credit cards even though they have higher interest rates because they cannot be bothered with the loan application, a survey says.

A Citibank survey has found consumers prefer to pay for large purchases with their credit card rather than take out a personal loan. Full Story