Do You Need to Take More Interest in Your Debt?

Do You Need to Take More Interest in Your Debt?

According to the latest figures from RBNZ, consumer debt has grown by 7.7% since this time last year, revealing that our appetite for personal debt shows no signs of abating. But when it comes to repayments, consumer comparison site Canstar, warns that all loans are not equal and we should pay close attention to how much it costs us to pay them off.

Canstar general manager Jose George says:

“In addition to sizeable mortgage debt, Kiwis currently have nearly $16 billion worth of personal debt. Below this huge headline figure, we can often get complacent about what we consider to be relatively low levels of individual personal debt. This ‘hands-off’ approach can quickly lead to inflated interest payments or extended repayment periods resulting in even more debt.

“If you don’t want to throw money away un-necessarily, it’s critical that you make sure you’re repaying your debt in the most cost-effective way possible. What’s more, it’s a relatively simple and straight forward thing to jump online and checkout your options.”

The calculations below show the difference in paying off a $10,000 debt over three years, either by credit card(s) or unsecured personal loan:

George continues:

“Being smarter about debt can save money on your regular repayments and the time it takes to pay off your balance. The modern environment of mobile and online banking means it’s quick and easy to refinance debt. There’s so much information available at our finger-tips, we no longer have to put things off or put them straight in the ‘too hard’ basket and to help consumers make informed decisions, Canstar recently compared and rated 53 products from 10 providers. ”

Cast your search net wide

Canstar’s research also found it could work in your favour to extend your search for a personal loan beyond your main banking provider.

“Obviously the deal you can negotiate depends heavily on your personal circumstances” continues George. “As an example, when Canstar compared the average advertised car loan rates, we found you could save over $3,000 with a smaller provider. It goes to the message that doing your research, comparing and shopping around could save you money.”

For further information and a full list of Canstar Five Star Ratings for personal loans, 2017, please visit the Canstar website.

ENDS

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