This story is a helpful extension to the recent surge in personal lending. The earlier focus was on Australians borrowing more as cost-of-living pressure bites. This newer angle is about where lenders are earning fees, how loan products are changing, and why borrowers should look beyond the advertised interest rate.

A key reason for the fall in personal loan fee revenue was a shift in vehicle finance. Some lenders stopped offering new personal vehicle finance or sold loan books to non-bank entities, meaning those fees no longer show up in the same bank reporting. In plain English, a lower fee figure does not automatically mean personal loans have become cheaper for every borrower. It may also mean more activity is moving outside traditional banks, where pricing, eligibility rules and fee structures can vary widely.

For consumers, the practical lesson is straightforward: compare the full cost of the loan, not just the headline rate. Establishment fees, monthly account fees, early repayment charges and missed payment fees can all affect whether a loan is genuinely affordable. The comparison rate can help, but it still needs to be read alongside the loan term, repayment frequency and any optional add-ons.

• Check whether the rate is fixed or variable, and how that could affect repayments.
• Review upfront and ongoing fees before submitting an application.
• Consider whether a shorter loan term saves interest, even if repayments are higher.
• Avoid applying with multiple lenders at once, as this may affect your credit file.

The RBA update also shows credit cards remain a major source of household banking fees, making up around 40 per cent of household bank fee revenue. Credit card fee revenue also increased, partly linked to overseas spending and foreign currency charges. For households carrying card balances, this is a timely reminder that convenience can become expensive when interest and fees compound.

Debt consolidation through a personal loan may help some borrowers simplify repayments, but only when the new loan is cheaper, manageable and used with discipline. Before applying, borrowers should check their income, current commitments and credit file, model repayments with a personal loan calculator, and compare personal loan options across participating lenders.

The bigger message is that Australia’s lending market is becoming more fragmented. Banks, fintechs and non-bank lenders may each price risk differently. Responsible borrowers should look beyond approval speed and ask whether the loan fits their budget after fees, interest and life’s unexpected expenses are factored in.