Personal loans still popular

Reporter: Rodney Lohse
Broadcast Date: July 02, 2009

If video was supposed to have killed the radio star, then it was the credit card that was supposed to have killed off the personal loan.

Canstar Cannex Head of Research Steve Mickenbecker said personal loans have been making a comeback for some time.

While credit cards are easy and convenient for some they are too easy not to pay off and have lead to the spiralling national debt level of $43 billion.

Personal loans have been, for many, their salvation.

According to Steve, not every personal loan is as good as the next.

"Price is always important, so it's got to be a low price loan," he said.

"Don't just look for the interest rate, look to see whether there's an ongoing fee, look to see whether there's an application fee, because they all add to the cost of your loan."

Unsecured personal loan
A good interest rate at present on an unsecured personal loan is around 11 per cent.

Here is Canstar Cannex's top five:
The Wagga Mutual Credit Union Gold Personal Loan,
The Service One Members Bank Personal Loan,
The My State Financial Personal Loan,
The First Option Credit Union Personal Loan and,
The Heritage Building Society Personal Loan.

Generally the best personal loans are from credit unions and the like, as the big banks steer their customers towards credit cards.

Secured personal loan/car loan
As for car loans, these are simply personal loans secured against the car which usually means borrowers can secure a much lower interest rate of around 5 or 6 per cent.

These are Canstar Cannex's top five car loans:
The Member First Credit Union Special Car Loan,
The Community First Credit Union Green Loan,
The Heritage Building Society Cake and Eat it Loan,
The RTA Staff Credit Union Sweet Deal Car Loan and,
The Macquarie Credit Union Secured Personal Loan.

"The other thing with car loans is that there's a bit of a trap that people fall into," steve said.