U-Bank Versus Loans.com - Which Is Better

• 

  rambutann on 22/07/2017 - 14:26

  +1

  I've recently refinanced to Loans from Aussie. Super low rate, no real complaints here. Their customer service is quite good and I found that I didn't have to do an awful lot to complete the process. If you do go for Loans then don't forget to get a referral to get $150 off.

  I managed to reduce my loan from 30 years to 25 years on the same repayments so I'm stoked.

  Ubank is 'backed by NAB' so if either company is going to be affected it'd be them. But that might not be affected.

• 

  chumlee on 22/07/2017 - 14:34

  +2

  Ubank being part of NAB is a deposit taking institution which means they can get funds cheaper by using the deposits they have. Loans.com.au borrows wholesale so should another GFC come they could be forced to pay more for their funds and therefore will pass the cost on

  Obviously there are nore factors to consider. Just don't look at the rate they offer today but how they will treat you over the longer term

• 

  naritas on 22/07/2017 - 14:51

  +3

  At Naritas we are accredited with Firstmac (the funder of loans.com.au) and Advantedge (the NAB business unit that funds uBank via AFSH).

  In our experience the major difference between these two lenders are:

  1. Only uBank brings the safety of being part of the NAB group (a pillar bank) and comes with the Commonwealth Financial Claims Scheme protection by virtue of NAB being an ADI. All other things being equal, having this kind of dependability will carry a price premium.
  2. Functionality. uBank products that are not designed to be sophisticated (NAB has its red star products for that space). As such, you will find that uBank loans loans don't offer 100% offset accounts. That being said, Firstmac (loans.com.au) loans do not have highly sophisticated offset functionality like you see on offer with most ADIs.
  3. Susceptibility to regulation & funding costs. As Chumlee has pointed out, ceteris paribus, Advantedge (uBank/AFSH) should be in a position to fund its loan more cheaply (as an APRA accredited ADI) than a non-bank lender. That being said, each lender has influence by regulators - recently this regulation has caused cost of funds increases to bank lenders (hence why people at uBank/Advantedge got stung), but it is likely that these pressures will extend to non-banks in the near future.

  It is worth noting that depending on the specifics of your scenario and your needs/wants, you may find that there are superior alternatives to the products issued by these two lenders at present. Examples of lenders with popular/high value owner occupied products oriented towards refinancing borrowers include Bank of Sydney, Auswide Bank & Bank Australia.

  Hope this helps.

  • 

    Islund on 22/07/2017 - 16:34

    My repayments are 30% more than the minimum per fortnight, I pay per fortnight and will most probably will die wondering why banks charge interest monthly :$

    • 

      Cheapskate Paul on 22/07/2017 - 20:27

      +1

      I think your interest is probably charged daily, but debited monthly. Your additional payments are reducing you interest from the day they are credited.

• 

  Peck on 23/07/2017 - 10:31

  Slightly off topic. Generally speaking do banks etc charge a higher rate to have an offset account? I assumed that these days of strong competition they would offer it as a bonus benefit and not skim from it with a higher interest rate.

  • 

    dcep on 23/07/2017 - 10:43

    usually lower rate with $399 annual fees.
    you get discounted rates + offset account + credit card with annual fee waived

  • 

    Gunther on 23/07/2017 - 22:34

    some banks charge a 0.1% more for an offset.

  • 

    samprofs on 24/07/2017 - 15:46

    I would say the key reason would be that off-set = lower margin/profit for the lender. A re-draw product relies on the customer manually transferring funds into the loan to save on interest, which most people would do once a month. As interest is calculated daily and then debited weekly/fornightly/monthly it means that the off-set benefits don't rely on a savvy or proactive customer.

    Hope that helps.

• 

  ElitePropertyFinance on 26/07/2017 - 09:52

  I would personally take loans.com.au over uBank due to their overall lending policy - for example, uBank doesn't allow for equity release/cash outs whereas Loans.com.au does. So if the value of your property has increased and you want to withdraw the equity for renovations, deposit for the purchase of another property - well you can't and may be forced to refinance to another lender that can which in turn you would pay refinance costs.

  Loans.com.au also accept a more varied range of properties than uBank does so you need to be wary of this.

  Both are no frills lender and the only big downside with both lenders is their borrowing capacity calculator - depending on your income they will generally lend less than other lenders.