Canstar’s Best Value Personal Loans

Canstar has released the latest Personal Loans Star Ratings research, which included ratings for 171 personal loans. See which 16 of them received a 5-Star rating.

5-Star Personal loans

The tables below list all of Canstar’s 5-Star rated personal loans from its latest Personal Loans Star Ratings (released November 2017). We will also breakdown what makes up a 5-Star personal loan and how they differ from the average product in the market.

The products with links displayed in these tables are based on a loan amount of $20,000 in New South Wales to be repaid over three years.

Secured personal loans

Secured personal loans are taken out against an asset you own, and if you do not repay the loan, the lender can sell this asset to recoup their money. The following five secured personal loans were awarded a 5-Star rating by Canstar in November 2017.

5-Star Secured Personal Loans
Company Product
First Option Credit Union Secured Personal Loan
Heritage Bank Low Rate Secured Loan
Holiday Coast Credit Union FTD Secured Loan
Hume Bank Secured – Term Deposit
Select Encompass Credit Union Personal Loan Sec by TD
Source: Personal Loan Star Ratings. November 2017

Unsecured personal loans

Unsecured loans, on the other hand, involve the lender agreeing to lend you money without taking a form of security, meaning they take on a higher degree of risk. The following 11 unsecured personal loans were awarded a 5-Star rating by Canstar in November 2017.

5-Star Unsecured Personal Loans
Company Product
Bank Australia Personal Loan – Property Owners
Gateway Credit Union Personal Loan
Liberty Financial Personal Best
MoneyPlace Unsecured Loan A – Excellent Credit
My Credit Union Special Offer Personal Loan
Newcastle Permanent Personal Loan – Unsecured
QBank All Purpose Loan – Special
RateSetter Unsecured Personal Loan – Fixed
Regional Australia Bank Personal Touch Loan
Select Encompass Credit Union Personal Loan Var Rate
Summerland Credit Union  Equity Plus Unsecured
Source: Personal Loan Star Ratings. November 2017

Interest rates on personal loans

The table below displays the minimum, maximum and average interest rates for secured and unsecured personal loans on Canstar’s database (as at 3/11/2017).

To give you an idea of the difference between 5-Star personal loans and other personal loan products, the table also displays the average interest rates of 5-Star rated products and how this differs from the market average (as at 3/11/2017).

Personal Loan Interest Rates

Unsecured Personal Loan

Secured Personal Loan

Loans rated 112 59
Min 7.22% 4.24%
Max 22.99% 20.87%
Average 12.34% 9.39%
5-Star average 9.23% 5.00%
5-Star Difference 3.11% 4.39%
Rates as per conditions outlined in Personal Loans Star Rating Methodology for relevant profile and are correct as at 3/11/2017

Source: www.canstar.com.au

Fees on personal loans

Fees are another important thing to consider when taking out a personal loan, and there is a significant difference between the fees for 5-Star products and the market average.

Personal Loan Fees

Unsecured

Secured

Upfront fees*

Ongoing fees Upfront fees*

Ongoing fees

Min

$0.00 $0.00 $0.00 $0.00
Max $750.00 $156.00 $380.00 $156.00
Market average $194.57 $43.39 $183.25 $58.98
5-Star average $158.09 $5.45 $135.00 $24.00
Difference $36.48 $37.94 $48.25 $34.98
*Fees are the ongoing fees that would be incurred on an annual basis and are correct as at 3/11/2017. Source: www.canstar.com.au

How much could you save on a 5-Star loan?

When you combine the lower fees and interest rates on our 5-Star rated products, you can save a whole lot of money over the course of your loan. For example, if you plugged the numbers from the table below into Canstar’s loan comparison calculator, you’ll see how a 5-Star personal loan could save you thousands compared to one with market average fees and interest rates.

Secured personal loan – 5-Star vs market average
Average 5-Star loan Market average loan
Loan amount $20,000 $20,000
Loan term 5 years 5 years
Upfront fees $135.00 $183.25
Ongoing fees $24.00 $58.98
Interest rate 5.00% 9.39%
Repayments Monthly Monthly

Using these figures, an average 5-Star personal loan would cost you $24,185 ($4,185 in interest) over the term of the loan, with monthly repayments of $401. Comparatively, a loan at market average interest rates and fees would cost a total of $28,878. So compared to the market average loan, the average 5-Star personal loan would be $4,963 cheaper over a five year loan term. This is an average figure and will vary depending on your circumstances and criteria.

Compare personal loans with Canstar today:

Compare Personal Loans with Canstar

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