Should I take out a personal loan?

Should I take out a personal loan?

Louis: Seem to be having a bit of car trouble.

Liana: Ha, you don't say.

Louis: Well, this leaves me with no other option than to upgrade my new wheels. My savings are going to take a hit, though.

Liana: Well, luckily, you've got options, like taking out a personal loan. But before you make that kind of commitment, I'm here to help you to consider all of the factors involved.

Louis Voiceover: ANZ presents should you take out a personal loan? It's okay. I didn't know either.

Louis: Maybe this really is it. This is the personal loan era of my life.

Liana: I mean, people take out loans for all sorts of reasons. But yes, a new car is actually a really good reason. Other reasons include home renovations, consolidating your debt, a big holiday, a wedding, even furthering your education.

Louis: Liana, that's great and all, but I literally just wrote off my car. You know, there are more pressing things at play here. So let's focus on up. Are there any alternatives to a loan?

Liana: Well you might have some savings that you could use. You may have been making additional payments into your mortgage that you could draw down on, maybe even funds in an offset account? If it's a smaller thing you could put it on a credit card, but I feel like this is not a credit card situation.

Louis: Question though: why choose a loan over a credit card? It seems a lot easier.

Liana: Well, your credit card balance is usually due within a month and can have a higher interest rate. So it's only really good for smaller monthly balances. If you need access to something big right now, like a car and you don't have that money in savings, a loan is one way to go. Or maybe you do have enough savings, But don't want to dip into your rainy day fund.

Louis: Actually, what is the interest rate on a personal loan, out of interest? I walked myself into that. I'm so sorry.

Liana: Well, it depends on who you get it from and the length and size of the loan. And it could be either a fixed rate or a variable rate. If you choose the fixed rate, the rate you start with is locked in and it remains the same for the duration of the loan.

Louis: Love that. Absorbing it all. So what do I get started? Like, how do I go about finding a loan that's right for me?

Liana: Well you can go online and take a look at the different providers. You can compare eligibility criteria, interest rates and product features based on what's most important to you. Or you can go to your bank and find out what they offer.

Louis: That's a really good tip. Thank you. Well, I look forward to getting this show on the road. But seriously, thanks Liana. I could never have done this alone. Why am I doing so many puns? I literally just wrote off my car. What is going on?

Liana: I don't know.

Louis: I should go peruse for some cars. In the meantime, if you found this video helpful, subscribe to our channel and watch me as I upskill on a whole lot of other financial wellbeing topics. And make sure to click the links in the description for some more helpful resources. In what world would this happen? Crazy talk. This is a wild concept.

Liana: Don't go.