December 14, 2020
Money Management Tips by Director of The-Negotiators team
If you want to be Financially Savvy, please read this as there is a lot of hype currently with lower than ever cash rates, banks trying to lure their customers for borrowing more by any means possible.
Get a new car, even if you don’t need it and in a way, you will max out your credit or borrowing capacity but the monetarily practical people will forego instant gratification and instead save and invest for a better future, so look beyond the media hype, the asset bubbles and pay attention to conflicting information and certainly do your own due diligence.
Do you know your current interest rate? Do you have a fixed or a variable rate loan?
You can always refinance your existing loan at a better rate but do your homework, also try to negotiate for a better rate with your existing lender, most banks will match the rate you have been offered to retain your business.
You are also better off staying with your bank since refinancing means lots of paperwork involved and it also affects your credit score since it will be a brand new loan application.
Ask yourself, is it worth refinancing?
Most banks will try to offer you more money but evaluate your situation, do you need more debt?
Supplementary loans or Top-ups
Do not simply apply to borrow more just because you have equity in your property unless you have a plan to invest in the future. Do not simply borrow to buy a new luxury car as a car value depreciates as soon as you drive that out of the dealership.
If you are in a need of a new car, the best is to negotiate the price with the dealer before telling them how you will pay. Most dealerships make money from finance through them as banks pay them a percentage which is a very high amount.
Always negotiate to the bottom and get a loan from outside as that will benefit you more in the long run.
Do not borrow on your home loan as that will initially be a temptation lower rate 3% and a lower repayment since the loan is for a long term generally 30 years but in reality, you would not keep the car for over 5 years but you will keep paying interest of the borrowed amount for 30 years!
Credit cards are great if you spend them wisely, earn points on every dollar spent but repaying it before the due date so you don’t pay any interest.
Refrain from doing a cash advance on your credit card as your interest is charged at a cash advance for the entire amount until you pay off the full balance owed to the bank.
A lot of people do not understand the trap by the banks as credit cards are unsecured loans hence a very high interest which can be up to 36% by some credit providers.
Facts: If you are simply just making a minimum repayment on your card every month and you owe $2000, you can take up to 20 years to clear the balance! The reason, your minimum repayment is 2% which is just an interest on your card paid monthly. If you have a credit card debt try to make some extra amount on top of minimum payment to pay off sooner and save on interest!!
Who we are?
If you are already having debt stress and do not know how to get back your financial freedom. Do not worry!
Contact The Negotiators team– We will analyse your situation and give you options to help you come out of debt by negotiating with banks on your behalf.