VICTORIA TEACHERS MUTUAL BANK
A new car loan with an amazingly low interest rate is just one of a competitive range of products
Victoria Teachers Mutual Bank is the only contender from our top three personal lenders of 2016 to make the list in 2017, rising from second place last year to take out the category. “Victoria Teachers Mutual Bank offers a diverse range of products with competitive features and sharp rates,” says Canstar analyst Jack Smart in explaining the reason for the institution’s success.
Victoria Teachers Mutual Bank’s personal loan has a rate of 11.74%, which Smart says is 1.02% below the market average. Loan terms of up to seven years are available with a minimum borrowing of $5000 and the option to lock into a fixed rate for five years. No monthly or annual service fee is charged, and extra repayments are permitted with fee-free redraw.
If you’re thinking of a personal loan for some eco-friendly home improvements, Victoria Teachers Mutual Bank’s Green Personal Loan (9.35%) has no upper borrowing limit. The loan can be used to fund environmentally positive improvements such as a solar hot water system, energy-efficient (minimum five-star rating) whitegoods and appliances (excluding televisions), grey water treatment systems and solar panels.
According to Smart, the top-performing product for Victoria Teachers Mutual Bank is its New Car Loan (Discounted). It comes with a rate of 5.79%, which Smart says is “an amazing 4.50% below the market average”. To be eligible for this discounted rate, borrowers need to credit a minimum of $250 a fortnight to their Victoria Teachers Mutual Bank account. “In addition to the competitive rate, the New Car Loan offers flexibility and functionality with no early repayment penalty, flexible repayment options including fee-free extra repayments, the ability to redraw, and ease of application through diverse channels,” says Smart.
Victoria Teachers Mutual Bank also offers a Used Car Loan with a rate of 6.79% and a Green Car Loan (5.29%) suitable for new cars with a carbon dioxide value of 180g/km or less, as rated by the Australian government’s Green Vehicle Guide. Liberty Financial’s Personal Best loan has an interest rate of 7.99% and allows extra repayments plus redraw. A second option, the Personal Choice loan, works like an overdraft, allowing borrowers to access cash as they need it with interest (at 10.99%) charged only on the balance drawn down. Liberty Financial also caters for car buyers with its Liberty Drive loan. With a rate of 6.69%, this loan features a “flexible payment arrangement” that allows borrowers who have kept up their loan repayments for the first six months to reduce monthly repayments from time to time by up to two-thirds. It’s a handy option if unexpected bills arise. However, as interest is calculated on the outstanding balance, this feature has the potential to inflate the overall interest cost.
Unlike our other winners, Hume Bank’s personal loans are available for amounts as low as $2000. A rate of 7.95% applies for a five-year loan secured by a car less than three years old, or use a term deposit as security to pay just 5.95%.