Linda and Grant
As a couple, Linda and Grant receive $1,270 in super payments every fortnight. They’ve paid off their house and have a small source of additional income from a rented-out investment property. While their payments are enough to support their lifestyle, they don’t have the means to make additional larger purchases. When their car stops working, they want to take out a personal loan to buy a replacement.
Option 1: They are currently with the CommBank and want to take out a loan with them. They look and see that they can borrow $5,000 at an interest rate of 9.49% p.a* for 4 years. While the repayments of $125.59* are manageable, CommBank requires the car to be less than 5 years old. Linda and Grant can only afford an older car.
Option 2: An unsecured loan option, the Citibank Ready Credit, will let them borrow $75,000 for a fixed rate of 3.99% p.a.* for a term of 3 years. They like the fixed rate because it will let them plan for their repayments and the competitive rate on offer seals the deal for them. All they have to do is prove they have a taxable income of $40,000 per annum and they can buy the car they had in mind.
*Rates correct at time of writing