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Loans Fact Sheet
BB Fact Sheets – Money – Loans
Managing your Loan(s)
Borrowing money is sometimes necessary to procure large investments that you can't afford on your own - like your own home, but should be done with caution and with care. You should always make sure that you're going to be able to pay the loan back – and not only if that 'miracle' or ‘Lotto’ win comes through!
If you're going to borrow money, don't borrow every penny that you can – try to save up a deposit first, so that you don't need to borrow as much and you will have some equity to start with.
Get assistance from a financial advisor to draw up a budget and schedule of repayments to see how much you can afford to borrow, and to give you a plan of how to manage your money.
Baby Boomers and Borrowing
Baby boomers have grown up largely in an economy where borrowing money from Banks and using credit cards is common place to finance anything from a new TV, car through to homes and investment properties.
In recent decades, people have taken out lines of credit based on the equity in the own home and used multiple Bank and Store credit cards. The global financial crisis has reduced the capacity for people to borrow money, terms and regulations have ALSO been tightened, affecting everyone.
Top Borrowing Tips
The first step in taking out a loan is to get all the information on borrowing money from various financial institutions – you'll want to be informed not only of what's available, but also what your rights are.
Seek out more than one offer of variable and fixed interest rates– there are some good deals out there for people willing to take some time to find the one that suits them best. Remember to read the fine print, including clauses in paying the loan out early.
Don't borrow the full amount that you are offered if you can help it – borrowing less means repaying less, as the interest will be lower on smaller loans. A loan calculator can be a simple and easy way of finding out what an actual loan now will eventually cost you in repayments.
Check and see if there is an early-exit fee. Some institutions will wave this fee, which means that you can pay back more than they ask, and get out of debt faster.
Don't EVER get a loan to pay back a loan – this is financial suicide. If you are in this situation, seek financial assistance and pay attention to the advice they offer.
Credit Ombudsman Service - 1800 138 422
Financial Ombudsman Service - 1300 780 808
NSW - Consumer Credit Legal Centre - 1800 808 488
QLD - Financial Counselling Service - 07 3321 3192
VIC - Financial & Consumer Rights Council - 03 9663 2000
WA - Consumer Credit Legal Service - 08 9221 7066
SA - Community Legal Service - 08 8362 1199
TAS - Anglicare Financial Counselling Service - 03 6234 3510
NT Anglicare Top End Financial Counselling Service - 08 8985 0000
ACT - Care Financial Counselling Service - 02 6257 1788
Centrelink Financial Information Services - 13 23 00
Disclaimer: The information contained in this section should not be used for individual financial advice. Please seek independent financial advice if you have concerns or specific questions relating to your money.
This article was created by Jennifer Lawrance for babyboomers.com.au - Australia's website for Baby Boomers. Sources include ASIC and the Federal Government. Babyboomers.com.au is an online resource to help people find information and services on health, money, travel and recreation
Copyright 2009 Babyboomers Pty Ltd. All rights Reserved.
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