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Author Archives: Graeme Bray

How-The-New-Westpac-CEO-Lined-Himself-For-A-Top-Job-FastAccessFinance -- Unemployed Loans
How The New Westpac CEO Lined Himself For A Top Job

We’ve heard a lot of success stories of ordinary people who became successful in business by hard work, sheer luck or a combination of both. But there are also stories about people who seemed destined to becoming successful since they were born.

Brian Hartzer, the new CEO of the oldest bank and company in Australia, is one of the few whose future may have been shaped since he was born. Hartzer is taking over the job of Gail Kelly, who at 58 decided to retire from her enviable post as CEO of Westpac, with a package of $12.8 million a year. She is currently the highest paid bank CEO in Australia. Tangas Calvin Klein Baratos Now, that’s a pretty big shoe to fill in, for Hartzer.

When Kelly and Hartzer stood next to each other on November 13 to announce to the group executive team that Hartzer will become the new CEO of Westpac, the announcement was received with an approving gesture of standing ovation from everyone present.

Viewed from where they are, both Kelly and Hartzer looked every inch different from each other, based on whispers from banking industry insiders. Kelly is a natural people-person who started as a teller – the bottom of banking hierarchy, after working as a Latin teacher. She, like Hartzer is also incredibly good with numbers.

Those who have worked with Hartzer say he is a great banker, very commercial and hard-nosed. Bragas Calvin Klein Baratas His banking roots can be traced from consulting and got his line management experience in the United Kingdom. He was never a teller. But banking insiders agree that Hartzer is just “what you need in a bank.”

Gail Kelly is loved by everyone at Westpac and that can be attributed to her touchy natural ways. Brian Hartzer is nothing like that. Hartzer has his eye on leading a major bank for some years and as a retail banker, he understands how the industry will be transformed by digital technology.

Hartzer has been nominated for similar posts before. Comprar Bragas Calvin Klein ANZ appointed him as senior executive and was considered in the running for the top post which eventually went to current ANZ CEO Mike Smith. Calzoncillos Boxer Calvin Klein At ANZ, he covered the bank’s commercial banking, domestic retail and wealth management businesses.

Hartzer was CEO of Royal Bank of Scotland, UK Retail, Wealth and Ulster Bank, before he joined Westpac in 2012. His career move was driven by the opportunity presented to work with Gail Kelly. Comprar Calzoncillos Calvin Klein His move to Westpac earned him $8.6 million sign-on bonus. And since 2012, Hartzer had the benefit of seeing Kelly up close, as an incredible leader. He is currently on a package of $3.4 million a year comprised of $2.25 million in base pay plus short term incentives.

At present, Hartzer looks after a large part of Westpac’s businesses responsible for delivering about two-thirds of the bank’s $7.6 billion profit. He is responsible as Chief Executive of Australian Financial Services (AFS), for retail, wealth businesses and business banking, including Westpac’s, St George Bank’s and BT Financial’s business banking. He supports Westpac’s strategy of maintaining separate identities for St George, RAMS, Bank of Melbourne, and BankSA businesses.

Hartzer’s name surfaced after Westpac hired international search firms when Gail Kelly told the board of directors she wanted to retire. Through the international search firms, the bank wants to see what talent was available to take Kelly’s prestigious post which she held for the last seven years.

The search process also included internal review of potential candidates and that search came back with the 47-year old Hartzer, an Australian born in the United States, with 25 years of banking experience up his sleeves. His American twang was tempered by 15 years stay in Australia.

His resume is one that shows that he was born to lead, as his training for leadership would attest. Hartzer spent his learning years at the Choate Rosemary Hall School in Connecticut. It’s one of the 8 best schools in the United States, the equivalent of UK’s Eton, or Australia’s The King’s School or Sydney Church of England Grammar School.

Hartzer then went to Princeton University, a popular Ivy League college where he pursued European history. Boxer Calvin Klein Hombre He got his first job at First Manhattan, a consulting company. It’s in Princeton where he developed his passion for history, and he considers the opportunity to lead the oldest bank and oldest company in Australia an amazing honor, especially as the bank enters its third century.

His stint at Westpac saw him aligning with Kelly’s strategy. He took the lead role in driving the vision of CEO Kelly through the business.

His new post becomes effectively his in February 2015 but he isn’t expected to make any major changes to the executive team at Westpac. Gail Kelly, for her part, at the time she took the post, had spilled half the senior executives at Westpac. And since then, Kelly has built an amazingly strong leadership team with a very strong one team culture.

Hartzer said his priority will be to keep the strength of the bank in its financial performance and engagement with customers. Comprar Boxer Calvin Klein Calzoncillos Calvin Klein Baratos He will focus on developing people and the digital revolution in banking. He said that he wants Westpac to continue to invest in its people and its leadership quality in order to have world-class leaders who continue to develop other world-class leaders.

It is also in Hartzer’s agenda to ensure that Westpac becomes one of the world’s great service companies as it pushes the boundaries as it adapts to digital technology. In the banking world, digital payment services using new technologies are considered as threats to traditional banking practices.

And Westpac, like all the other banks in the world, envisions its customer base to be increasingly hooked to using digital channels. Tangas Calvin Klein Baratos Westpac, this year has launched a revamped platform for online banking, including new apps for Apple and Android platforms.

And in all these, Hartzer has a clear sense of vision of the customer needs and how technology is shaping the changes in banking.

Lindsay Maxsted, Chairman of Westpac along with Gail Kelly could be nothing but pleased with their choice. Kelly said, “I think we have made the perfect choice, the right person for the right role, at this time.” And what made it even more special is that the person was one of the key members of her own team.

And while Hartzer is not about to get paid as much as Gail Kelly, Hartzer will get a long term incentive in the form of shares but it will take longer for Hartzer to get the benefit of any share plan because of the new Westpac policy on equity awards which is now on a four-year plan instead of the previous 3-year plan. Details of Hartzer’s equity package are not yet known but to get an idea, other bank CEOs in Australia get packages around $10 million.

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Getting-The-Best-Personal-Loan-Deal-FastAccessFinance -- Quick Loans
Getting The Best Personal Loan Deal

By this time you already know that personal loans offer better benefits than credit cards so when you are faced with a circumstance when you need to borrow money, you can easily make a decision to apply for a personal loan.

But how do you know you’re getting the best personal loan deal with the different Aussie-owned and operated banks? Let’s check out what you should look for in a personal loan offered by any bank or financial / lending institution:

Unsecured Personal Loan

As much as possible, choose a bank or lender that offers personal loan without requiring any form of collateral or security. This will eliminate the danger of losing your property in the event that you find it difficult to fulfill the monthly or weekly loan repayment schedules. Tangas Calvin Klein Baratos Taking out an unsecured personal loan does not mean that you can easily default on your payment and the lender has no hold on you because there’s no collateral pledged. Calvin Klein Bañadores Hombre The lender has other legal means to recoup their money but it would take a longer time to resolve the matter.

Flexible Repayment Terms

If you have a good credit rating or history, the bank or lender will not have any issue in allowing you a longer repayment period for your personal loan. You should also check their restrictions on early repayment of loan. Some allow it but with corresponding penalty or service charges.

Competitive Interest Rates

You should check the interest rates offered by different banks and lending firms. Bragas Calvin Klein Baratas If you have high income and good credit score, you will be able to negotiate for a much lower interest rate. Banks and lending firms have different interest rates. It might help to survey your target banks or lending firms on their interest rate, loan tenure, etc. before approaching any of them.

Calculate And Do the Math

Once you have the pertinent information from each bank, you can now do some calculations to check which terms are essentially translating to better deal. Some banks may impose a lower interest rate but add on a recurring fee, which if calculated may result to a higher total amount than a bank that offers a higher interest rate but with rebates for early repayment. Comparing each of them based on calculations can be the best way to select the bank or lender that offers the best personal loan deal. Calvin Klein Ropa Interior Mujer

Your Financial Situation

This is the last element in your selection consideration. Slip Calvin Klein Outlet Choose a bank or a lender that gives high importance to a borrower’s financial situation and credit history. Most banks will prefer to approve borrowers who have good control of their spending and who personally and closely monitor their budget and spendings. If the lender looks at your financial capability and credit history, you can expect to receive better terms and conditions from the lending firm or the bank.

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Getting The Best Deal On Your Car Loan

The fact remains that car ownership is an expensive process. However, it need not be that burdensome if you just know the simple steps which can help avoid paying more than what you should. Calzoncillos Calvin Klein Baratos It’s an exciting idea – buying a new car. Calvin Klein Ropa Interior Mujer You can easily play in your mind the unmistakable smell of a new car, or the new tech-based advanced features.

According to Commsec data, car affordability is at a 38-year high, thanks in great part to the strong Australian dollar and price competition between car manufacturers. Despite the record low prices of cars, a lot of people in Australia still opt for finance packages to fund their acquisition.

How do you get the best finance deal offered by the market?

Set a Budget

Like any other purchase you want to make, you always need to set a budget. Car purchase is no exemption. You need to work out your financial capability – what you can afford to borrow without overextending yourself. Calvin Klein Bañadores Hombre You should include all costs such as insurance, registration fees, roadside assistance, repairs and maintenance. You also need to keep in mind that vehicles are assets that depreciate. You should check and make sure that you don’t owe more than what the car is really worth.

Study the Terms and Conditions of the Loan

In essence, car loans are personal loans intended for buying a car. Calzoncillos Boxer Calvin Klein This type of loan has a fixed interest rate and a loan term from 1 year to five years. If you can offer security against the loan, you’re likely to get the best rates. You should also review your credit record so you can settle any unpaid debts prior to approaching a lender. It is also important to read the fine print and be aware of the common loan traps car buyers end up with including lump sum balloon payments at the end of loan term or termination fees for early repayment.

This article about rules in getting a car loan could also enlighten you.

Shop Around

Car dealers usually offer finance facilities for the purchase. This can be very convenient for the buyer but it may not be the best loan term you can get from the market. Make inquiries with banks, building societies, credit unions or lending companies to check which one offers the best terms and deal. In many cases, you can secure better loan terms if you offer a security against the loan. Comprar Calzoncillos Calvin Klein Without a security, the new car itself will serve as the loan security when you avail of a personal loan.

Purchase Timing

It’s always the best time to buy a new car towards the end of the financial year and calendar year. Traditionally, the end of financial year is a big sales period as businesses are pushing for sales before closing the books for the year. Car dealers often clear stock towards the end of calendar year through to January before arrival of new models so they also offer attractive promotions. Other than these times, you can also buy at the end of the month. This is when car sales representatives are required to hit their sales target for the month.

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Usual Problems Encountered When Not Making Informed Personal Loan Decisions

There’s no denying that some people find themselves in trouble when they applied for a personal loan with any bank or nonbank lending firm in Australia simply because they rushed into the application process without due diligence. Comprar Ropa Interior Calvin Klein Chances are their application gets rejected because they did not check the necessary requirements that would help increase the approval of their loan application. Slip Calvin Klein Baratos Or, if they get approved by some stroke of luck, they would later on find themselves scratching their heads because of the “unknown” penalties or fees they are charged by the lender or the bank for non-fulfillment of their repayment obligations.

While taking out a personal loan is a common and not out-of-the-ordinary undertaking in Australia or even in other countries around the globe, some people sometimes forget that along with a loan decision is the awareness and consciousness of the responsibilities required of the borrower to fulfill to the lender.

Hence, due diligence is important so that when they apply for a personal loan, they know the restrictions, inclusions and other important terms and conditions that come along with the approved loan.

Some of the usual problems faced by borrowers who did not take enough time to study or research about personal loans include:

The Difference Between Fixed Interest and Variable Interest Rate

A borrower may agree to a fixed interest rate without fully understanding the principle behind it Therefore, because they didn’t really know what a fixed interest rate means, they may end up confronting their loan officer demanding for a lower interest rate same as the prevailing rate in the market.

On the other hand, if he opted to have a loan with a variable interest rate, he may be surprised when his next repayment amount becomes higher than the previous because the interest rate in the market has gone up.

The Chargeable Fees When Repaying Loan Early

A borrower may also not know that in the event that he decides to repay the remaining loan balance earlier than the agreed loan term, a corresponding ERA (early repayment adjustment), break or economic costs and administration fees will be charged to the borrower. You can refer to this article for additional information about early loan repayments.

They may not also know that there are certain limits on the lump sum payments they can make in a year that will not be charged with ERA or break or economic costs. Calvin Klein Underwear Mujer If you exceed the specified limit on the lump sum payment amount, you will be charged for the loss incurred by the lender when you repay the loan earlier than schedule.

The Chargeable Fees When Repayment Due Dates Are Missed Out

If a borrower misses out on a repayment due date, there’s a corresponding penalty or default fee alongside some arrears management fees that the borrower has to shoulder for non-payment. Boxer Calvin Klein Baratos They may not also know that by notifying the bank or the lender that they are in financial difficulty, the bank or lender may offer assistance to help fix the situation and get back on track in the repayment path.

Losing Collateral When in Default

Some borrowers may not understand the risk of losing the collateral they have pledged as security to the loan, if and when they fail to fulfill their obligation to repay the borrowed money. The bank or lender may have explained this but the borrower can choose to ignore it because they didn’t seriously think it can happen.

Having approval for the loan is one thing. Fulfilling the obligations that go with an approved loan is another.

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The-Difference-Between-Good-and-Bad-Debt-FastAccessFinance -- Unsecured Personal Loan
The Difference Between Good and Bad Debt

It is not uncommon to hear about stories of people who have gone deep in debt but were able to recover and be debt-free after months of years of sacrifices and hard work. Many Australians have gone down this road but thankfully, the lower interest rates have allowed them to pay off their debts at record rates. Adidas Yeezy Boost 350 V2 Acheter Ropa Interior Masculina Calvin Klein Baratos Debt has fallen out of favor in Australia since the global financial crisis.

According to the Reserve Bank of Australia, three million home loan customers in Australia were 14% ahead of their home loans in March 2013. This means the homeowners have a buffer of around 20 months in repayments. While such a report is encouraging, many continue to struggle with paying off other types of debts, i.e. credit card debts, car loans, and personal loans. These types of debts – the wrong kind, can be an enormous drag on your ability to build and grow wealth as such debts eat up spare cash which could have been saved or invested.

The importance of managing your debts can spell the difference in your goal to become debt-free. A good understanding that used well, debt intended for investment can help you multiply your returns and grow your wealth in shorter time.

But first you need to be able to identify the differences between good and bad debt.

What is Good Debt?

Generally considered as good or positive debt is if the borrowed money helps you purchase wealth-building assets. These assets are those which are likely to provide you with income or those which can grow in value over time. An example of this is borrowing money to facilitate the purchase of a home or an investment property. Tanga Calvin Klein After a few years, your home’s value will significantly appreciate. Adidas Ultra Boost Femme Pas Cher While it may take you longer years to pay off your home loan debt, the appreciated value of the property makes for good collateral you can use to fund your other financial requirements.

On the other hand, your investment property will provide you with rental income which can help pay off the money you borrowed to buy the investment property. Financial milestones such as home ownership or property investments are often achieved by availing good debt. Yeezy Boost 750 Acheter Other than home or investment property acquisition, another example of good debt is investing in yield shares – these are assets that generate extra cash flow which will enable you to pay off your non-investment debts like home loan while paying only the interests on your investment loan. This will also allow you to pay off your personal loans faster as you maximise tax benefits from your investment borrowings. But this option should be dealt with enough caution because of the risks that go with this type of investment.

If your investment falls in value, your losses are multiplied. Calzoncillos Calvin Klein Baratos In the same light, if your investment increases in value, your gains are obviously multiplied as well. Borrowing money to invest in a number’s game require due diligence and good background in investments of this nature.

What is Bad Debt?

A bad debt is that type of debt which you should avoid. If you borrow money and spend that money in something that will not appreciate in value is considered a bad debt. Bad debts’ are often unsecured and not backed by something of value which makes it more risky. Bad debts also often come with higher interest rates. Debt becomes bad for your wealth building if they fall in value, are not tax deductible and won’t earn you money.

Two good examples of bad debt are:

  • Credit Card Debt – If you use credit card to fund things like holidays and luxury goods, you are taking on bad debt. Calvin Klein Ropa Interior Mujer Without the discipline to pay off your credit card debts at the end of the month, your credit card debt is likely to incur high monthly interest rates that will accrue over time, making the debt to be increasingly difficult to settle.
  • Car Loan – Unlike homes or investment properties, vehicles tend to devalue extremely quickly. Adidas Yeezy Boost 350 Homme Bragas Calvin Klein Baratas Your car would have lost a large deal of its initial value by the time you have paid off your loan and interests when you purchased the car.

The Difference Between Good and Bad Debt

A good understanding of how good and bad debt can or cannot help you achieve your financial goals is required to make better financial decisions. Calvin Klein Bañadores Hombre Knowing the basic difference between good and bad debt is important in building a successful financial portfolio. Slip Calvin Klein Outlet Remember that bad debt will limit, if not obstruct your chances of being in a positive financial situation as the money you have will be eaten up by paying high interest rates, leaving you with no extra cash to be used for investment.

On the other hand, good debt will facilitate your opportunity to invest in assets that appreciate in value, putting you in a better position in terms of financial success.

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If You Were A Bank, Would You Lend Yourself Money?

It’s a silly thing to ask – would you lend yourself money, if you were a bank?

Would you?

How would you rate yourself in terms of creditworthiness? What criteria would you be using to determine the risk level of lending money to yourself?

While you may not be a bank, and that you are in fact, contemplating on applying for a loan for whatever purpose – investment, home or investment property, or business, it would help you to understand what criteria lenders take into consideration when evaluating loan applications from people like you. With such understanding, you can improve your chances of getting the approval for the loan you want to obtain from the bank or the non-bank lenders.

Universally, banks and lenders use a standard measure known as the 4 C’s of Credit in the Finance industry. What are these Cs?

  • Character
  • Collateral
  • Capability
  • Capital


How does your character impact the bank’s decision on your loan application?

Banks look at your “character” in a different way. Tangas Calvin Klein Baratos The bank wants to know how serious you take your financial obligations and commitments. They want to know if you can repay the loan which they get to make judgment by looking at your credit history. Boxer Calvin Klein Mujer Your credit history should answer their questions like:

  • Can you repay the loan on time?
  • Do you have the commitment to fulfill monthly obligations in full?
  • How much, if you have used credit before, and what was the money used for?
  • Do you have your financial facilities organized and in order?
  • Does your credit history show that you pay your bills on time?
  • Have you been labeled as a bad debtor? Or have you filed for bankruptcy before?
  • Do you have a stable job?
  • Do you have stable living arrangements?
  • Have you made credit inquiries in the pats, and how many?

Answers to these questions will give the lender a solid picture about your “character” as provided by your credit file.

You may not be aware of it, but everyone who has applied for any type of finance – mobile phone account, credit card, personal or other loans, has a credit file under his / her name. Lenders obtain your credit file to evaluate and determine if you have a good or bad rating. Bikinis Calvin Klein Baratos In other words, your credit file will tell the lender if your “character” satisfies their requirements and that you are worth taking the risk against. The banks and lenders just want to make sure that you are able to repay the money they have allowed you to borrow for a certain period of time.

Veda Advantage is the company that runs your and everyone else’s credit file. By going to their website, you can request a copy of your own credit file which should contain pertinent information such as loans you have availed in the past, any bad credit references, judgments or bankruptcies, history of directorship in companies, if any, past addresses, employment history, etc.

Lenders, mortgage insurance companies have access to your credit file. Hence, it would help if you are able to view your own credit file in order to assess your chances of being adjudged with good or bad credit rating.


Banks and lenders are always interested to know what you can offer to them as security over the loan you are applying for. Loans are usually secured with collateral. Investors and homeowners usually offer property as collateral against the loan.

And depending on the offered collateral, lenders will assess its value and what would be the corresponding loan amount for the collateral offered. If you offer a small property, assessment would be different than if you offer a sizeable property.

Most banks and lenders in Australia don’t prefer specialized properties such as a serviced apartment, student accommodation or a small one-bed apartment offered as security against the loan. If they did, there might be restrictions or limitations on the loan amount they can approve or grant.

Banks and lenders may just be interested to look at the maximum LVR (Loan to value ratio) between 65% and 70%. Otherwise the loan could be packaged with a higher interest rate or a shorter loan term.

Location is another consideration. If the offered collateral is a property located in an upscale community in one of the major metropolitan cities, you’re likely to have better loan terms. Calvin Klein Bañadores Hombre Lenders prefer good city locations than properties in the regional or rural areas in Australia. For the banks, it’s important that they know what they are getting from the collateral you offered in the event of loan repayment default or failure. They need to be able to get their investment back plus all the other expenses they have incurred from the proceeds of the property if they have to sell it.


Are you capable to repay the loan? Among banks, this is known as serviceability. The bank or lender checks your income, if you are self-employed or PAYG, if you have rental income and any other assets or liabilities.

Banks will check how much income you make per month and how much you spend for general living expenses including rent or mortgage, utilities, groceries and food, credit card debts and personal loans. By having all the required numbers, the banks can determine if you have more than enough to spare and allocate for repayment of loan if you are approved for one. The banks need to see that without cutting on some of the regular obligations, you can still pay the loan without creating a hole in your pocket.

Banks are likely to favor those who have more than one source of income because that is some kind of assurance that your loan repayment is coming from somewhere fixed and determined and not dependent on any excess from regular employment income.


This is the last C – your capital or deposit.

This is gauged in terms of LVR. If you have bigger deposit, your LVR is lower. So if you want an 80% LVR, you should have 20% or more deposit. With this, you can easily land a credit facility. On the contrary, if your target LVR exceeds 80%, your loan application will have to go through a mortgage insurer for coverage of the bank’s risks.


This is not part of the 4 Cs but in summary, if you have a good understanding of these set of criteria, you know which areas you can improve before you even approach the bank or lender for a loan. If you have bad credit rating, you can rectify that by updating your payments to your outstanding debts.

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How-Quick-Can-A-Person-Get-Approved-For-A-Personal-Loan-FastAccessFinance -- Quick Loans
How Quick Can A Person Get Approved For A Personal Loan?

When you reach a situation where you need extra cash to fund something which can no longer be accommodated by your income or budget, you turn to the banks or financial institutions in Australia to take out a personal loan. Calzoncillos Boxer Calvin Klein Each bank and lending firm has its own set of requirements and policies on personal loans.

Some banks offer personal loans that are secured with collateral. Adidas Yeezy Boost 750 Pas Cher Slip Calvin Klein Outlet Borrowers who can pledge a security against the loan will have a higher chance of getting loan approval faster than those without collateral.

There are banks that offer personal loans without any security or collateral. Adidas Yeezy 350 Boost Pas Cher Calvin Klein Bragas Borrowers are assessed based on their financial circumstances or their financial capability to repay the borrowed money. This might take longer as the bank may require documentary proof of the borrower’s financial capacity.

But there are other non-bank lending firms that are more flexible with their application process and offer online loan application submission. Bragas Calvin Klein Baratas Borrowers spend 15 minutes or so to fill out an online application form, providing the lending firm of their personal information and financial details. Bragas Calvin Klein Baratas They even have an online loan calculator so that the borrower can determine how much he can borrow, what the repayment amount will be and how long he/she needs to repay the loan.

Compared to traditional banks, non-bank lending firms offer a quicker application process. They inform the borrower of the criteria for qualifying for a personal loan, such as:

  • Must be over 18 years of age
  • Must be a permanent Australian resident
  • Must be currently working and receiving a yearly gross income of over $24,000
  • Must not have had any defaults on loans or credit cards in the last 5 years
  • Must not have filed for bankruptcy in the last 7 years

They also specify the different documents and information they have to provide in order for their application to be processed, including:

  • Your email address
  • Your Australian driver’s license (if you have one)
  • Your details of employment
  • Any outstanding loan or credit card balance (including limits and repayments)
  • Details of living expenses such as mortgage repayment, rent, monthly recurring bills, car loan repayment, etc.

Additionally, non-bank lending firms may require submission of the following evidentiary documents:

  • Proof of residency
  • Proof of income
  • Proof of employment

When all of these are complied with and submitted electronically to the lending firm, processing can be as quick as one day. Adidas Yeezy Boost 350 V2 Acheter Calvin Klein Ropa Interior Hombre If all requirements are in order, loan approval may be granted within the day (depending on when the requirements have been completed). Calvin Klein Underwear España Otherwise, loan approval may be received the next day.

Upon approval of loan application, funds will be transferred to the borrower’s account on the same day or the following day at the latest.

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There is a Magic Formula That Turns Bad Debt into Good

It’s common sense – one that has been taught to everyone, that you should aim to pay off your debts as much as you can and reduce your debt level. Unfortunately, not everyone is good at aiming for this, and being successful at it.

Reducing debt takes a lot of discipline and hard work. Boxer Calvin Klein There are also some strategies that can effectively help you achieve that goal. However, there are also cases where holding debt can make sense as a strategy for getting richer and wealthier. Really?

There are in essence, three types of debt: good, bad, and very bad debt. How are they different from each other?

Good Debt

This is any debt that results to a tax deduction because the money borrowed was used for a purpose that is tax deductible, which could include, generating an income from rental property or shares. Tax deduction will essentially halve the interest rate, if you happen to be on the upper marginal tax rate bracket. Such tax deduction may not look a lot but over the longer term, you would feel its dramatic, positive effect on your finances.

Bad Debt

This is any debt or other form of borrowing that does not lend itself to any tax deduction or tax relief. Not included in this category is a type of very bad debt, which is the credit card where the interest rates can be anywhere from 15% to 20%. These high interest rates are 3 to 4 times more than a typical home loan rate.

And while it’s difficult to justify prioritizing settlement of personal loans or credit card balance used to fund lifestyle choices, it just is a necessary action. Calvin Klein Bañadores Hombre With a 15% interest rate spent on personal loans or credit card balances, such amount of money could have been used in other activities that could generate higher return.

One way to deal with this is to move very bad debt to bad debt. You can do this if you have equity in your home which you could borrow against at a much lower interest rate which you can use to repay the very bad debt.

Another way is to convert very bad debt to good debt. This can be done using existing assets. Slip Calvin Klein Outlet Say, you have acquired shares from various floats such as Telstra. Boxer Calvin Klein Baratos You can sell those shares to repay your bad and/or very bad debt. You can then obtain a loan classified as good debt to purchase assets with equivalent value to the sold shares. This now means that you have the same value of investable assets but your debt categories have changed. In this type of strategy, you have to consider capital gains tax and transaction costs just to make sure you are making the right move and decision.

A lot of people are able to establish good debt line of credit using their home as security or collateral but they should stay away from bad debt mortgage to facilitate the credit line. Your overall cash flow tends to improve due to the lower after-tax costs of the good debt. Comprar Boxer Calvin Klein Comprar Calzoncillos Calvin Klein You can then channel your funds into reducing your bad debt home loan.

Bottom line – with careful management of your borrowings, you can end up having significant savings that will compound over a long period of time.

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Saving-Thousands-On-Your-Home-Loan-FastAccessFinance -- Quick Loans
Saving Thousands On Your Home Loan

Is this a good time to renegotiate your home loan plan – when the economy is sluggish?

In Australia, home buyers have never had a better time since time immemorial. Today, lenders offer variable home loans under 5% – a staggering low rate not seen since the 60s and the 70s.

For instance, a low rate of 4.39% is offered by Heritage Bank, said to be the lowest of 62 lenders with under 5% rates. Adidas Yeezy 350 Homme Boxer Calvin Klein Baratos Since last year, average home loan rates have been hanging in the 5% mark. Per data from Reserve Bank, the industry has not done this since 1970. Calvin Klein Ropa Interior Mujer The 5.95% average standard variable rate in October is said to be the lowest in five years.

According to Kirsty Lamont, director of Mozo.com.au, borrowers will have an early Christmas rates bonanza due to the fierce interest rate competition. Yeezy Boost 350 Pas Cher Boxer Calvin Klein Mujer Ms Lamont said that the industry has not seen lenders in stiff competition against the big four major banks and each other since before the financial crisis that hit the world. Adidas Yeezy Boost 350 France

The average variable home loan rate is 5.22% crunched from 551 loans from 79 lenders while the big four’s average standard variable rate is 5.38%. Calvin Klein Bañadores Hombre This kind of indicates that the big banks can’t seem to be picking up. Slip Calvin Klein Outlet Mozo.com.au calculates that a $300,000 loan could result to a yearly savings of $2,064 if the loan is switched from a big four bank to the lowest rate available from the lenders.

You can also read things to consider when taking a home loan here.

That could be enough for borrowers to consider the switch. But real estate experts warn that the dropping home loan rates indicate a weak economy and low demand. And as such, second-tier lenders are searching high and low to find borrowers.

For property investors, low rates are interpreted as an alarm bell that sounds a warning that rates are bound to increase in the future at a faster rate than property values. Calvin Klein Bañadores Hombre Hence, consumers are not advised to borrow more that they can afford to repay at a much higher rate. Adidas Yeezy 350 Femme

While the current situation presents a terrific opportunity, purchasers should remember that it’s a temporary thing and will not last forever. Property prices are not likely to grow always. And as rates are expected to increase in the long term, negotiating a fixed rate can provide certainty.

Some lenders advertise very low rates and borrowers should not take such rates at face value. Slip Calvin Klein Outlet With very low rates come terms and conditions that could potentially inflate the cost over the long term. Calvin Klein Ropa Interior Mujer Hence, borrowers should read the fine print in order to make sure that there are no costs hidden somewhere in the provisions.

It may be tempting to jump at the opportunity of having low rates from second-tier lenders but there is a chance you can negotiate for a revamped loan rate with your existing loan provider.

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Grasping-Compounded-Interest-Rate-FastAccessFinance -- Unsecured Personal Loan
Grasping Compounded Interest Rate

There’s a reason why banks and lending firms in Australia offer various financial instruments and facilities to individuals and businesses. By offering loan facilities, they (banks and lending firms) make their earnings from the interest rates they charge to borrowers.

The most common type of loan availed by many Australians is the personal loan. This can be secured or non-secured personal loan. Secured personal loan requires collateral while non-secured personal loan has no such requirement.

Personal loans may also be charged with different types of interest rates: fixed rate, variable rate or compounded interest rate.

Interest rates are set by the Reserve Bank of Australia (RBA) – the nation’s central bank. The set rate of RBA determines the interest rates for the different types of loan facilities as well as for bank deposits. Members of the RBA board meet once a month to examine the latest inflation rate, employment, economic growth, home loans, expenditure on consumer goods and building activity. Higher interest rates discourage people from borrowing which will slow economic activity as well as inflation.

What is Compounded Interest Rate

By definition, compound interest is the interest earned on previously accumulated interest plus the principal amount. This can be best understood in two stand points: the borrower and the lender (investors).


If you take out a personal loan and the bank charges you for the borrowed money with compounded interest rate, it means that if you are not able to fulfill your loan repayments on the due date, the interest is added to the unpaid amount which already included the interest. In the end, you are compelled to pay interest on the interest. The best example of how compounded interest rate works on loans is the credit card debt. If you are unable to pay your credit card balance in full every month, the interest, calculated daily is added to the amount you owe. This is disadvantageous to the borrower because the owed amount rises.

Lender (Investor)

From the standpoint of the lender, compounded interest provides them with a quick way to grow their investment. If they invest $100 expecting to earn on 10% interest per annum, after a year, their investment will have become $110. If the investor does not take the money out, the total amount of $110 will earn 10% interest for another year, which is $11, making the total money invested after the second year to be $121. The next year, the 10% interest rate will be applied to $121 making the interest amount to be $12.10 and the total investment amount will be $133.10, after three years. This continues until the end of the investment term or until the money is withdrawn.


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