Rate VS Repayment

When you go shopping for your latest outfit or car part you generally have a budget in mind – an amount of money you have tucked away for the sole purpose of buying the item. You do this because you know that’s what will come out of your pocket so why are we so focussed on the ‘interest rate’ when it comes to finance?

 You may be swayed by an incredibly low rate that is being advertised, however when it all comes down to it what is it actually costing you? Some finance companies advertise “base rates” but that may not be the rate that your repayment actually equates to after all the relevant fees and charges are added in. It’s important to read the small print too, to find out what the conditions of this “fantastic” rate are.

We always remind our clients to focus on the repayment not the rate.   The repayment is what you will need to have in your bank account every fortnight or month to pay for your loan. Did you know the difference of 0.75% between rates can be as minor as $2.50 per week?

This is when we suggest to our clients who are comparing financier offers to compare all aspects of the loan being offered. For example:

• the applicable fees and charges, when they are to be paid
• the term of the loan
• if the first repayment is at settlement or a fortnight or month later
• early termination conditions
• if a deposit is required
• the "after loan settlement" service available

All these factors can effect your repayments. If you have been offered a finance deal and are not sure if it is right for you, call us for a no obligation chat about your individual needs on 1300 306 694. It won’t cost you anything and might save you $$$.