Defined Terms and Documents       

Unsecured Variable Rate Term Personal Loans

 

 

The below recent exchange of emails with the RBA's 'Communications Division' evidences that the interest rate for Unsecured Variable Rate Term Personal Loans was 14.4% p.a. as at Nov 2022.

From: RBAInfo [mailto:RBAInfo@rba.gov.au]
Sent: Tuesday, November 22, 2022 5:36 PM
To: 'Philip Johnston' <scribepj@bigpond.com>
Subject:
RE: Would you email to me the RBA Excel file that lists the ave monthly unsecured variable interest rate for personal loans and also RBA's methodology to determine the ave interest rate from a welter of different loan interest rates? [SEC=OFFICIAL]

Hi Philip,

Thank you for your email.

The data the below article is referring to is published in Statistical Table F5, column V (Lending rates; Personal loans; Term loans (unsecured); Variable). The respective interest rate (cash rate) is published on our website under Cash Rate Target or in Statistical Table F1.

Regarding the methodology, Statistical Table F5 publishes averages of advertised interest rates collected from banks’ websites on the last working day of the month. Note that due to the nature of these data sources, these rates are indicative only and are likely to be regularly revised. The RBA continuously reviews a variety of sources for lending rate data and may make changes to the series provided here as a result. For further information, please refer to the Notes of Statistical Table F5.

Kind Regards,

Anna
Communications Division

RESERVE BANK OF AUSTRALIA | 65 Martin Place, Sydney NSW 2000
ph: +61 2 9551 9830 | e: rbainfo@rba.gov.au | w: www.rba.gov.au

From: Philip Johnston [mailto:scribepj@bigpond.com]
Sent: Monday, 21 November 2022 5:29 PM
To: RBAInfo <RBAInfo@rba.gov.au>
Subject:
Would you email to me the RBA Excel file that lists the ave monthly unsecured variable interest rate for personal loans and also RBA's methodology to determine the ave interest rate from a welter of different loan interest rates?

Below is an extract from my 1st Attachment (an article by John Collett – SMH- Sept. 8, 2019) - "Personal loan interest rates remain static despite plunging cash rate":

            “Figures from comparison site RateCity, using RBA data, show the typical rate on unsecured variable-rate personal loans is about 14.4 per cent, while the cash rate is at a record low of just 1 per cent.

 In January 2006, the average personal loan rate was 12.2 per cent, with a cash rate at 5.5 per cent.” 

My 2nd Attachment is RBA Excel file f08hist.xls.  Column H ‘Lending rates; Personal credit; Outstanding; Fixed-term loans; Variable-rate’ lists an interest rate of 6.35% for Aug 2019 which is well below the above quoted 14.4 per cent.

Would you email to me the RBA Excel file, and an embedded thread to it, that John Collettt relied upon?

Would you also provide any methodology information that the RBA employs to arrive at average interest rates when so many lenders have different loan interest rates?

CBA’s Variable Rate Personal Loans range from 7.50% p.a. to 19.50% p.a.  Its ‘Representative rate’ is 13.50% p.a.

Phil Johnston aka Bank Teller
0434 715.861