What the banks don’t want you to know about debt.

What the banks don’t want you to know about debt.

Posted 5 April 2016. Categories: Personal Finance.

We all need to borrow money sometimes. Whether it’s for some home renovations, a new car, a much-needed holiday or you desperately need a boat (fish won’t catch themselves right?) Banks can be more than happy to lend you the money, but when it comes to repaying them here’s a few things they may not have told you.

The credit card hangover

Credit cards are fun when you’re spending, not so great when you’re stuck with their interest rate.  Turns out, paying back the minimum on a standard $2,000 credit card bill could take you up to 16 years ‘til it’s gone*. Takes the shine off that online shopping binge you had eh? If you can’t pay off your credit card all in one go, there are ways around the bank’s high interest rates (see point 2, conveniently coming up next).

Not all interest is created equal

So you’ve bought what you’ve always wanted… yay! You’ve put it on HP, the credit card or took  out a personal loan from the bank. A quick look at interest.co.nz will show you that the interest you’re paying on that loan might be way more than at other places.  So, there’s no harm in shopping around and taking advantage of companies that will tailor a rate to suit your needs.

You don’t owe them anything

Ok. So you might owe them money, but you don’t owe them your loyalty. If their interest rate is too high, or they get a bit judgemental, you can take your loan elsewhere. Doubt you’ll be shedding a tear at that break up.

Banks aren’t the only option

So, in the past you either had the big banks or worse, the loan sharks. Thanks to the wonder of the Internet, things have changed for the better. Now Kiwis can borrow from each other, without needing the big guys. It’s called a Peer-to-Peer Money Marketplace. Basically, you apply for a loan and other Kiwis fund it. The interest is tailored to your situation so it can be much more competitive. You can borrow money online from other Kiwis at places like Harmoney. People love it because they’re finally in control of their debt.

What now?

So, if you’ve got credit card bills, HP and loan repayments sending you up the wall, why not put them all together with Harmoney? Become part of the community today and you’ll see what your personalised rate is, and how easy it is to set up. Then, if you are approved,  we’ll help make that dream of stress-free debt a reality.

Consolidate your debt now

* For more on why credit card minimum payments keep you in debt for longer, take a look here: http://www.interest.co.nz/calculators/credit-card-minimum-payments