There are some important considerations before you leap into a loan
Financial Planner Luke Smith joined 2CC Talking Canberra 1206AM in The Money Show which aired on Friday 18 October 2021. Lockdown begins to ease in the ACT, given our very high vaccination rates. Luke isn’t back in the studio yet, but joins Leon by phone. This week’s topic: Borrowing money and the best way to go about it. With low interest rates, it’s tempting to borrow more. In this episode Luke takes a deep dive into the issues you might consider before you make any borrowing decisions.
Key topics include:
- Although interest rates are low, people are borrowing more which is making property prices rise
- Legislation change means that banks now must consider your ability to repay the loan in a higher interest rate environment
- Rising interest rates might put many existing borrowers under financial pressure
- Where do you start when looking for the right loan?
- Loan timeframe, your borrowing goal(s) and tax position (is the interest tax deductible or not) are important initial considerations
- Be prepared for interest rates rising so you can afford higher repayments
- Think about how the loan will be structured – principle and interest, interest only and an offset account
- Do you fix or not fix your interest rate?
- Also think about in which structure you buy an asset, lenders may differ on their terms
- The benefits of paying down loans, especially when you’re approaching retirement
- Luke shares his top tips for borrowing and the things to consider before you make a loan decision.
Everyone has different goals and financial planning advice can help you achieve them more effectively, especially when you link different strategies.
Listen to the Podcast right now
Also available on Apple Podcasts and Spotify ‘The Strategy Stacker – Luke Talks Money’
Do you need advice around your own financial plan?
Luke as a Financial Planner can help you set up a financial planning strategy to help you achieve your personal financial goals. Luke can also refer you to a broker if you would like to speak to one.
Make an appointment to confidentially explore what you’d like to achieve with your own personal financial plan. Call Envision Financial Services on 6260 4749. You can also use our contact us form to make an appointment for a confidential discussion.
Luke will return to talk about financial planning on 2CC next Friday. You can also catch up with The Strategy Stacker – Luke Talks Money podcast. We look forward to your company again.