Repackaging in Australia: Finance Trends & Impacts for 2025

Repackaging has become a buzzword in Australian finance circles, but what does it actually mean—and why is it so important in 2025? As lenders, fintechs, and even traditional banks search for new ways to manage risk and meet evolving consumer demand, repackaging is transforming how loans and credit products are structured, sold, and serviced.

What is Repackaging in Finance?

In the world of lending, repackaging refers to the process of bundling existing loans or debt instruments into new financial products, often with different risk profiles, interest rates, or terms. These repackaged products are then sold to investors or other lenders. The concept isn’t new—think back to the mortgage-backed securities of the early 2000s—but today’s approach is more sophisticated, heavily regulated, and often powered by technology.

In 2025, repackaging in Australia is largely seen in:

• Personal loan portfolios: Lenders bundle and resell loans to manage balance sheets and unlock liquidity.

• Asset finance: Equipment and vehicle loans are grouped and securitised for institutional investors.

• Buy Now, Pay Later (BNPL): Providers repackage receivables to fund new lending or meet capital requirements.

Why is Repackaging Booming in 2025?

Several forces are driving the growth of repackaging in Australia this year:

• Regulatory updates: The Australian Prudential Regulation Authority (APRA) introduced new capital adequacy standards for lenders in January 2025, increasing the incentive to move loans off the balance sheet and reduce risk exposure.

• Rising interest rates: The RBA’s cash rate remains above 4%, prompting lenders to seek ways to optimise funding costs and maintain profit margins.

• Fintech innovation: Advanced data analytics and automation make it easier to assess risk, bundle loans, and attract institutional investors.

• ESG considerations: Some lenders are repackaging ‘green’ or sustainable loans to tap into the growing market for environmentally responsible investment products.

For example, several major non-bank lenders announced new securitisation programs in early 2025, targeting both traditional mortgage portfolios and novel products like electric vehicle (EV) finance. This allows them to free up capital, offer more competitive rates, and respond quickly to shifts in borrower demand.

What Does Repackaging Mean for Aussie Borrowers?

The rise of repackaging can offer both opportunities and risks for Australian consumers:

• More product choice: As lenders unlock capital, they can roll out new loan products, features, and rate discounts.

• Potentially lower rates: Increased competition and access to cheaper funding sources may drive down interest rates, especially for high-quality borrowers.

• Greater transparency: APRA’s 2025 reforms require clearer disclosure of how loans are packaged, who services them, and what happens if things go wrong.

• Complexity: Borrowers may see their loans sold or serviced by unfamiliar institutions, which could create confusion or service hiccups.

For instance, a small business owner with an equipment loan might receive notice that their loan has been sold as part of a securitisation program. While the terms generally remain the same, customer service may shift to a new provider, and there could be changes in repayment processes or account management.

The Future of Repackaging: What to Watch

Looking ahead, repackaging is set to become even more integral to Australia’s financial ecosystem. Some trends to watch include:

• Expansion beyond traditional loans: Expect to see repackaging in sectors like solar loans, medical finance, and SME working capital.

• AI-driven risk assessment: Lenders are using machine learning to create highly customised loan pools, improving outcomes for both borrowers and investors.

• Focus on responsible lending: Regulators are closely monitoring repackaging activity to ensure consumer protections remain strong, especially as new players enter the space.

Ultimately, repackaging is a tool—one that, when used responsibly, can create efficiencies and improve access to credit across Australia. The key for borrowers is to stay informed, ask questions, and understand exactly how their loans are managed in this new era of finance.