Some of the top-rated personal loans in May 2024

New data shows more Australians may be taking out personal loans, while others are struggling with the cost of living. But what effect could a personal loan have on managing household budgets?

The most recent Lending Indicators from the Australian Bureau of Statistics (ABS) shows that the value of new loan commitments for fixed term personal finance rose 3.9% in March 2024, reversing a fall of 0.5% in February 2024. This rise is partially attributed to a 4.3% increase in loans for road vehicles, which broadly aligns with recent car sales figures, which have broken records each month since 2024 began.

The ABS data also shows personal loans for household goods are on the rise as Australians try to manage cost of living pressures. Loans for household and personal goods rose by 1.2% in the month of March, taking it to the third highest amount on record. 

The ABS Household Spending Indicator shows that household spending in March 2024 was 2.1% higher than a year ago but has slowed since the beginning of the year. Non-discretionary spending rose 4.0%, driven by increased spending on transport services and food, while discretionary spending fell 0.1%. In other words, Australians appear to be spending less on luxuries but more on essentials.

In some cases, a personal loan could help you take control of your finances and relieve some of your financial stress. For example, a debt consolidation personal loan could help you better manage your debts by giving you just one repayment and interest rate to manage. However, lenders will want to know your loan’s purpose before they’ll approve a personal loan application. Your credit score could also affect the loan application’s chance of success. 

Another method to try and better manage your household budget is to invest in energy efficient home features and technologies, from solar panels to EV chargers, which could potentially greatly reduce your power and fuel bills. The upfront costs of going green could potentially be partially offset by state and federal government grants and incentives, as well as with the help of green personal loans, which are often limited to specific purposes but have lower interest rates than many other finance options.

You can quickly compare green personal loans and other options with the help of RateCity’s Real Time Ratings™, which combine the cost and flexibility of different personal loan products into a simple star rating, which is regularly updated for improved accuracy. Some of the top-rated options on the RateCity Personal Loan Leaderboards may also become eligible for a RateCity Gold Award.

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