Everyone loves a bargain. And we like that feeling of having something for nothing. The sort of satisfaction that comes with “take now – pay later” options.
One long-lived example of the don’t-pay-anything-yet initiative is the interest-free payment plan. Frequently offered by the big home goods retailers like Harvey Norman, these purchases require zero deposit. They also give you the flexibility to pay off your invoice over time – without incurring any extra fees. 1000 days interest free sounds like a dream come true!
But there’s a catch. The fine print states that, should you miss a payment, inflated interest rates immediately kick in on your entire outstanding balance. And that currently stands at around a whopping 26%! You may also be up for late payment fees.
Credit card providers hit you with much the same thing. And it’s great for a while. The benefits of up to 26 months of zero interest are clear. Pay off your debt at your leisure, without having to pay the bank anything extra. But beware the hidden costs and escalating interest rates slapped on after your interest-free period.
These days, of course, we have the likes of Afterpay. Their payment plans allow you to access your goods without paying a cent for two weeks. After that, you pay off your purchase in fortnightly instalments.
The one thing the above all have in common is the need for cash flow. You still need to budget and ensure you have the funds to pay for your purchases. It’s easy to get carried away with the rose-tinted notion of owning a fancy new, high-tech 292-inch Samsung TV. But remember – you will eventually have to pay that $16,000.
This brings us to the government’s latest incentive to open up another 10,000 spots for cheap first-time home loans. Rather than having to fork out the usual 20% deposit for a home, first-timers have the opportunity to secure a property with just 5%. While this gives families a shot at the great Aussie dream, what it means is – they essentially need to borrow 95% from the bank.
The thought of owning their own home is extremely appealing for most. And if they can get their hands on one sooner rather than later (without having to cough up the extra 15% deposit), they’ll take it! But again, that’s a huge outstanding loan accruing for the best part of their younger lives. Can they really afford it?
So, whether you’re a first-timer, or you’re still paying off your regular mortgage – it’s worth doing it as quickly as possible. And that’s where GSA can help.
Give us a call, and we’ll walk you through our powerful and rewarding investment strategy. The consultation is not just cheap – it’s free!