According to David Lennon, founder of ‘You’re Welcome Finance, also known as the ‘Personal Loan Guy’, “the latest statistics out of the Australian Bureau of Statistics show that Australians are switching off the big banks and instead moving to smaller non bank lenders and opting for personal loans rather than adding to their existing home loans.
“The Royal Commission has really brought to light some concerning behaviour across the big banks,” David said today.
“I am not surprised that Australians are choosing to avoid dealing with them.
“This month especially we have seen a rise in the number of people taking out personal loans with non bank lenders. People don’t want to deal with the big banks and they don’t want to use equity in their home to access money.
“Once upon a time, the big banks dominated the market with nearly 90 percent of the market. Today it is now closer to 70 percent.
“There are a few reasons for this. Lending requirements have definitely tightened across the banks. Households used to use equity in their home to increase their home loan to purchase things like cars, holidays, weddings, etc. Now they are avoiding dealing with the big banks and the increased scrutiny and paperwork and are instead opting to take out a personal loan through a non bank lender.
“Non bank lenders are generally more nimble, and customer oriented and have increased their market share to nearly 30 percent in the last few years.
“Taking out a personal loan these days can be a much easier process thank in the past. A good Broker can turn around an approval in a matter of hours with funds deposited into the customer’s bank account the same or next day.”
The number of personal loan products on the market has increased with interest rates ranging from seven percent to over 10 percent.
“Whether you get a personal loan through a bank or a smaller non bank lender, the best way to consider all the personal loan options on the market is to speak to your Broker,” David added.
“A good Broker will always know the full range of products available and which ones best suit your circumstances.
“A good credit score, permanent employment and fixed address will nearly always ensure you are able to access the best rate.
“I think we are going to see a lot applications for personal loans as the fall out from the Royal Commission and its impact continues.
“I believe we are also going to see growth in the number of Brokers across the market space. Brokers create competition, a level playing field for lenders and provide access for the community to all the products available – which is what consumers need – and banks don’t want.”
You’re Welcome Finance is a national finance company which provides personal loans, car loans and home loans.