More Australians are now taking advantage of lower interest rates by consolidating or transferring their personal debts into a personal loan, new data from a major mortgage franchise has shown.
Research by Aussie Home Loans
has found that 58% of its customers are using personal loans to consolidate their debts built up in credit cards and other loans, with the average loan size being $20,000.
Aussie’s customers are also using personal loans for car purchases or travel, with the average age of the customer being 43 years.
According to Aussie’s executive chairman, John Symond
personal loans are regaining their popularity as consumers begin to understand that common alternatives – credit cards or adding to the mortgage – can be more expensive in the long term and take longer to pay off.
“The personal loan is coming back into fashion as it is a vehicle to consolidate multiple debts for ease of management and earlier repayment than many alternatives,” he said.
“It doesn’t make financial sense to be paying the minimum repayments on a handful of credit cards and not making any headway in paying off the principal, when personal loan interest rates are generally lower than credit card interest rates.”