Retail giant Coles has announced the addition of another financial service, personal loans. (photo by the Daily Telegraph)
Following the introduction of credit cards and insurance products, retail giant Coles announced another financial service, personal loans, according to the Daily Telegraph.
It is reported that customers can apply to Coles for unsecured personal loans for overseas holidays, residential renovation or debt restructuring.
Personal loans totaled A $150.3 billion in July, up from A $107.6 billion last year, according to the latest figures from the Australian Reserve Bank's (Reserve Bank of Australia). But interest rates vary from one personal loan product to another, ranging from 5.99 percent to 19.99 percent. Therefore, if customers apply for high interest rates of personal loans, there will be a lot of pressure.
Coles personal lending rates range from 12.99% to 19.99%. The company offers relatively low interest rates to flybuys members. As a result, customers need to determine the interest rate before signing a loan contract.
A spokesman for Coles said the new personal loan rate would be determined on the basis of customers' personal credit scores.
It is reported that Coles's personal loan benefits include early repayment of loans do not need to pay a withdrawal fee; do not need to re-apply to obtain a maximum amount of overdraft and so on. In addition, customers can also view their lending quotas, as well as personalized floating rates, which do not affect the customer's credit rating.
However, customers applying for Coles personal loans will have to pay a $199 account opening fee and a monthly fee of A $10 a month.
McKinbeck (Steve Mickenbecker), head of group financial services and ratings at Canstar, a research firm, said Coles's offer of personal loans was a further step for the company to stabilise the credit card market. He believes the Coles will eventually continue to expand into the financial services market, potentially providing services including household loans in the future. He also warned users to apply for personal loans more than three, some with interest rates as low as 5.99 percent.