CASH RATE RISES AGAIN : DOES IT IMPACT CAR AND PERSONAL LOANS TOO ?
Andrew Thompson | National Director , Loan Market Group
The Reserve Bank of Australia ( RBA ) this month announced the cash rate moved up 0.25 basis points to 3.85 per cent . This follows the release of inflationary data that showed annual inflation had cooled slightly in the March quarter ( 7 per cent ) compared to the December quarter ( 7.8 per cent ). While many homeowners across the country have been impacted by the changing cash rate , has it impacted other loans , such as a car loan ? The answer is - it depends .
How does the cash rate impact car and personal loans ?
The cash rate is the rate charged for banks and lenders to borrow and lend cash from one another overnight . This is then used as a benchmark for lenders to charge for interest rates on their own products , including home , personal and car loans as well as savings accounts . This means that as the cash rate increases , often the interest rates set by the banks and lenders also increase across their products .
Will I need to pay more for my car or personal loan ?
If you already have a car or personal loan , you ’ ll only notice a difference if you have a variable rate . When the cash rate increases , it ’ s likely your lender will also increase its interest rates meaning your repayments will increase . If you ’ re on a fixed rate , your repayments will not change until your fixed-rate period ends . If you ’ re considering taking out a personal or car loan , the increased interest rates across the board mean it ’ s important to compare lenders to find the right product that offers a competitive rate . If you have a home loan and have grown your equity , you may be able to refinance to access the funds you need to purchase a new car . A broker can have a look at your situation and recommend a strategy or shortlist of products that are right for you .
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