How much could you save with a 5-Star Rated personal or car loan?

Are you thinking about getting a personal loan to help fund home renovations or buy a car? Find out how much you could save with a 5-Star Rated personal or car loan.

Many Australians have been keen to spruce up their homes during the coronavirus pandemic. While some people have been making small changes around the house, others have launched into full-blown renovations. According to data from the Australian Bureau of Statistics (ABS), the value of home alterations and additions rose by 7% in August from the previous month to $784.3 million, the highest level it’s been since April 2016.

The pandemic has also presented an unique conundrum for those looking to buy a car. Due to global trade disruptions, there are currently fewer imported new cars available in Australia. This has driven up the price of used cars, with CommSec data showing a roughly 30% increase in used car prices since September last year. Higher prices may mean some buyers need to reassess their finance options.

If you are looking to take out a personal or car loan, Canstar’s 2020 Personal and Car Loan Star Ratings could help. Our Research team has analysed 293 products from 72 providers on our database. Loans were assessed based on their price and features. Price was the main driver of the overall score. As part of this, the Research team looked at the total cost of each loan it rated, including the interest rates, upfront fees and ongoing fees involved. For the features score, the team considered a range of factors including the application process and management of the loan.

How much could you save with a 5-Star Rated loan?

To give you an idea of the difference a top-rated loan could make, Canstar Research looked at the cost of a 5-Star Rated unsecured personal loan versus the average unsecured personal loan on our database. In this example, the Research team compared the average total cost of a $15,000 loan with a three-year term.

As you can see, the average interest rate was significantly lower on a 5-Star Rated product. Where lenders charged upfront and ongoing fees, these were also lower on average.

So, how much could you save over the life of a personal loan? According to Canstar’s research, in this scenario, you could save over $1,200 by going with a 5-Star Rated product.

Which loans received a 5-Star Rating?

In total, 55 personal and car loans on Canstar’s database received a 5-Star Rating across the consumer profiles considered. The winning loans in each profile are listed in the tables below, sorted in alphabetical order by provider name, then by product name.

New car loans

To fall into the new car loan profile, a loan must be available to buy a motor vehicle of at least $25,000 in value, with a loan term of up to five years.

Used car loans

For used car loans, the loan must be available to buy a motor vehicle of at least $15,000 in value, with a loan term of up to five years.

Unsecured personal loans

For unsecured personal loans, the loan must be available for either debt consolidation or to fund a holiday. It must be at least $15,000 in value over a loan term of three years. With an unsecured loan, you do not have to provide an asset (such as a car) as security.

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Secured personal loans

To be considered in the secured personal loan profile, the loan must be available for either debt consolidation or to fund a holiday. It must be at least $20,000 in value over a five-year term. Secured personal loans require you to provide an asset as security for your loan (meaning that if you don’t repay the loan, the lender can repossess your asset).

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For more information about how our Canstar’s Personal and Car Loan Star Ratings were calculated, you can read the methodology. If you’re considering taking out a car loan, you might also like to check out our 2020 Car Insurance Star Ratings and Awards.

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