ANZ raises personal-loan rate

The ANZ Bank has raised the interest rate on its personal loans for the third time within five months, citing recent market changes and the need to remain competitive. The rate was increased 0.5 per cent to 11.67 per cent five days before the Reserve Bank decided to hold rates steady last Wednesday. Many borrowers were unaware of the increase until letters arrived late in the week.

The bank's 75,000 personal loan customers are now paying 1 percentage point more in rates than they did in May this year. None of the other major banks has increased its personal loan rates. The ANZ passed on to its personal loan customers the RBA rate rises in May and June, increasing the personal loan rate by 0.25 per cent in each month.

Personal loan rates for the Big Four banks are now: ANZ 11.67 per cent, Commonwealth 11.25 per cent, Westpac 11.75 per cent and the NAB 8.47 to 13.21 per cent.

The news comes hot on the heels of the results of a survey in New Zealand which found that the ANZ is the most unpopular bank in that country for the second consecutive year. The consumer magazine survey ranked ANZ first, followed by Westpac Trust and the Bank of New Zealand, due to customers disagreements over fees and interest charges.