Bad debt
Credit cards
• Usually have an interest rate of around 18% if you do not pay the full balance due each month.
• Usually have a minimum monthly payment, and when you look at your credit card statement, you may be surprised by how long it would take to pay off the balance.
Buy Now Pay Later
• Payments are structured over a short period, and any missed payments attract excessive fees and interest.
• These are recorded on your Equifax Credit Report. (Often borrowers forget to disclose these accounts when applying for a loan, whether they are dormant or active).
Good debt
Personal Loan
• Usually has a much lower interest rate than credit cards.
• Has a set monthly repayment to ensure the loan is fully repaid within the approved loan term.
• Some have no fees attached.
Mortgage Loan
• Lower interest rate than credit cards and personal loans.
• Longer loan term.
• Can be consolidated with an existing mortgage loan, or a separate loan can be taken out.
You should carefully consider your current liabilities. If you have “bad debt” facilities, contact Paul on 0417 567 747, who will conduct a full analysis and review to provide options to improve your cash flow.