If you’re thinking about getting a car loan or personal loan in the future, you’ll want to keep reading. Did you know that a good credit score could give you access to lower interest rates from some risk-based pricing lenders? That could mean some pretty decent savings on your repayments!
In fact, if we looked at Australia as a whole, as of March 2015, borrowing on personal loans totaled a whopping $59.7 billion. Borrowers with good credit scores could get a better deal and lower their rates by up to 2% p.a. from risk-based pricing providers – in other words, we Aussies could collectively save hundreds of millions on personal loans.
At Credit Savvy, we want to make sure everyone knows about these potential savings, especially at a time of year where there are end of financial year (EOFY) car deals, home renovations and holidays being booked. On top of offering your Experian credit score for free, we’ve now added the ability to view and compare personal loans and car loans. Some of these loans could reward borrowers who have a good credit history with lower interest rates, however this varies from lender to lender.
If you want more info on personal loans or car loans, check out our Credit Knowledge Centre.
According to APRA, as of March 2015, borrowing on personal loans in Australia totalled $59.7 billion. The average interest rate across 100 typical personal loans is 11% p.a (loans tracked by Credit Savvy). The average interest rate across 3 providers that offer risk-based pricing for a good credit score is 9% – Citibank, SocietyOne, RateSetter. With a difference of 2% p.a. (11%-9%), hundreds of millions in savings on $59.7 billion could theoretically be achieved. This data is correct as on date of publishing.