Rate rise rollercoaster doesn’t seem to faze Aussies applying for personal and car loans 

It's no secret that rising rates typically mean higher loan repayments, reduced borrowing power and additional pressure on household budgets.

Despite this, Jacaranda Finance’s Money Talks Survey has revealed interest rate hikes aren’t having a huge bearing on Australians’ decision to apply for a personal loan now or in the future. 

Almost 500 people across the country participated in the survey which posed a series of questions about interest rates, personal and car loans, and credit scores. 

Key findings around attitudes to interest rates and loans included:  

• Most survey respondents in the market for a personal loan aren’t fazed by rising interest rates. Of the homeowners surveyed, 68.67% said interest rates had no impact and only 9.64% delayed or cancelled their personal loan application. The results were somewhat similar for non-homeowners – 63.08% said rising rates did not impact their decision, while only 13.94% delayed or cancelled their loan application.  
• If rates aren’t lowered or keep rising, most Australians would still apply for a personal loan. Nearly half (44.5%) of homeowners surveyed said they would seek a loan if they needed it urgently and a further 27.71% said they would shop around for the best rate. The results were nearly the same for non-homeowners with 41.56% saying they’d still apply to meet an urgent need and 26.41% saying they’d shop around. 
• Around one in five said rising interest rates have resulted in no changes to their financial habits.  
• In response to rising interest rates, only 14.46% of homeowners had delayed loan applications or major purchases, while this figure was 11% for non-homeowners. 
• Amid rising rates, 37.16% of non-homeowners had focused on paying down debt, a focus that was less prominent among homeowners at 30.12%. For both cohorts, around a third said they had cut back on discretionary spending.  

Understanding the impact of rate changes on approvals 

While most Australians in the market for a car or home loan don’t seem to be fazed by higher interest rates, most say they understand how changes to the cash rate can impact approvals.  

In fact, two-thirds of both homeowners and non-homeowners said they fully understood how rates impact their borrowing power. The remainder either said they found loan approvals and interest rates confusing or would like more guidance in this area. 

When interest rates rise, lenders keep a closer eye on the buffer they apply to each application and examine your spending habits, income stability, and existing debts more closely.  

When interest rates drop, serviceability for personal and car loans improve as repayments become lower and homeowners are likely to save on their home loan. This frees up more money to pay for other loans or debt serviceability. 

At Jacaranda Finance, we believe it is important for people to understand the full impact of the rate rise rollercoaster and the impact that credit scores and spending habits have on loan applications. Our tools and resources, such as our educational blogs and Better Credit app, aim to help our customers enhance their financial literacy and build a better financial future.  

Money Talks: As part of Jacaranda Finance’s ongoing commitment to guide people towards a better financial future, we recently ran the Money Talks survey to get a stronger understanding of the spending and lending habits of everyday Australians.

From an unwillingness to cut back on subscription services to how people opt to fund their upcoming home renovations, the survey results provide key insights. So, does removing your Netflix subscription get you closer to obtaining a loan? 

Discover these insights and more through our Money Talks survey results!