Coles rolls out personal loan deals

SUPERMARKET shoppers can now throw personal loans into their grocery baskets. But are the deals worth it?

SUPERMARKET shoppers can now throw personal loans into their grocery baskets.

Coles revealed it has added another financial service to its list of offers available - following on from credit cards and insurance products.

Consumers often sign up to unsecured personal loans for overseas holidays, home renovations or even debt consolidation.

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Latest Reserve Bank of Australia data figures show in July Australians had $150.3 billion in personal loans, up from $107.6 billion in the past year.

But rates on personal loans can vary significantly - ranging from 5.99 per cent to 19.99 per cent - so the cost can hit hard if customers get stung with a higher interest charge.

On Coles’ latest offers they reward flybuys customers with slightly cheaper interest rates when they sign up.

Their personal loan rates range from 12.99 per cent to 19.99 per cent so customers need to check what rate they are being charged before committing to any deal.

Coles has rolled out personal loans adding to their suite of financial products.

Canstar’s group executive of financial services and ratings Steve Mickenbecker said the move by Coles into personal loans is an extension of their strong foothold in the credit card market.

“They have the taste of credit from their credit card experience and can apply this and their powerful customers’ data to personal credit,” he said.

“For anyone looking for a personal loan for a home renovation, holiday, or to consolidate any existing debt, be sure to shop around.

“Compare prices as there’s a wide range in the market with rates starting as low as 5.99 per cent.”

Mr Mickenbecker suspects Coles could eventually push its way further into financial services offerings including home loans.

A Coles spokesman said the new personal loan interest rates are determined on a customer’s personal credit score.

This includes no exit fees for paying out the personal loan early and the ability to reuse available credit up to a customer’s borrowing limit without the need to reapply.

“Coles personal loans also allow you to check how much you can borrow, and your indicative personalised variable interest rate, without affecting your credit rating,” the spokesman said.

Customers signing up to personal loans also need to zoom in on the fees and charges associated with the loan.

But Coles’ deals hit customers with a $199 loan establishment fee and a $10 per monthly fee.

@sophieelsworth