Two family members both on the disability pension thats their only income, combined pension income $53,000, own their own home, no mortgage, no debts or credit card debts, no dependents, good credit rating.
Would they be able to get a joint unsecured personal loan from a bank for approx. $15,000 over 7 years for a used car, would they be likely or unlikely to be successful?
situation is totally different from that, health problems and not an intellectual disabilty, have savings and own their own home and could easily afford repayments on $15,000 loan
I think @geekcohen's point was more that if you have a pulse you could get a loan for anything.
Don't even need to have a job apparently.
Use the savings to buy the car?
Have they spoken to any potential lenders about their situation? As usual, credit decisions come down to income and servicing requirements. Whether or not this situation is acceptable to any of your preferred lenders will be pretty quickly ascertained by speaking to them.
I'd have thought they'd be better off trying to re-mortgage the house.
(provided they can be disciplined with the money of course)
It'd be easier to access and Interest rate would be lower.
theres no mortgage on the house
then go get one
Mortgaging the house would be easy to do and would free up $15,000 cash to spend on the car.
As a bonus, the Interest rate will be far lower than a Personal Loan.
(of course the lower rate only works for you if you repay the mortgage within the same time as you would have repaid a Personal loan)
thanks, l think l read with a personal loan you have more freedom to spend the money on what you want to but with a mortage you have to give tell the bank exactly what you spend the money on such as for example if you say you want the money for house repaires you have to provide reciepts from builders to prove you spent the money on what you said you would, is the correct
@cranswick: With a personal loan usually the Bank draws the cheque for the seller of the car so you don't have any freedom with that however for an equity loan using the house they could borrow for a number of uses ie. holiday, renovations etc and due to the equity in the property would not be asked for receipts.
@cranswick: I think you only are asked the purpose of loan to put on application, never heard of lender asking for receipts after loan is made. Lenders don't care what you spend funds on, only if you can repay.
the Interest rate will be far lower than a Personal Loan
For now.
@Sleeqb7: For ever, there is far more security to the lender in Property than for a Personal loan.
It all falls over of course if you only pay back the minimum repayment over 30 years, but over the same term, the Interest Rate on a Mortgage will always be far lower than for any other loan type and therefore repayments will be lower across the same term.
Perhaps a loan/s from family members would be a better alternative.
thats not possible
Because they don't like the look of the weak financial position?
own a home worth $850,000 with no mortgage and have no debts, not that weak
@Typical16-bitEnjoyer: much easier and cheaper to borrow $15,000 then to sell your house and move to a cheaper one you dont like as much
Why can't/don't you approach a bank and ask them??
Ozb first
On a "disability pension" and want to borrow money on a depreciating asset. Yeah, that can't possibly go wrong.
why not just use the house as security,
get a 15k mortgage over 10/20 years
yes lm thinking thats the best way to go. but didnt really want to morgage a $800,000 house for $15,000 loan, is getting a mortage harder then a personal loan in terms of paperwork and things
no idea regarding paper work, id just try get a 50k line of credit sort of thing and be prudent with the money
The repayments are about $250 / month.
How does that impact their finances? That is a key determinant and not up to the bank.
quite easy afford that, combined income is $53,000, no other debts
That would represent a fair chunk of their income. Not insignificant. And potentially for 7 years.
$53k is for TWO people.
Its not as much as you think especially when there are extra costs that come with car ownership.
And the extra costs that come with home ownership!
Couples raise kids with only 1 parent working on 1k a week…
https://moneysmart.gov.au/retirement-income/reverse-mortgage… for information on reverse mortgages.
Seems perfect for this situation.
you have to be over 60 to get a reverse mortage
They're under 60 and sitting on a 850k house - which they don't want to sell?
Guess they better start saving.
it would cost $60,000 to sell and buy a cheaper house with stamp duty realestate fees and have to rent a house for a year while looking for another house that would cost $30,000 so thats a total cost of $90,000 to sell and move house , and all the trouble and stress
@cranswick: It would cost nothing to save some of that $53k income that "quite easily affords" their lifestyle - in your words.
@Typical16-bitEnjoyer: It would take a few years to save $15,000 but might need a car right away for transport and cannot wait that long
@cranswick: They can't save more than 5k a year? Haven't saved anything in previous years? Guess they can't quite easily afford their lifestyle then. Not sure why you're forcing these family members to take out finance for something they probably can't afford, especially if something like unforseen medical expenses unexpectedly pop up.
@Typical16-bitEnjoyer: 'Not sure why you're forcing these family members to take out finance for something they probably can't afford,'
when did l say l was forcing anyone do anything, your talking total rubbish
But you did not tell us that.
Like everyone here, just trying to help.
Most lenders won't even look at a 7 year loan on a declining asset, especially unsecured. The loan could last longer than the car.
people get personal loans for holidays and weddings what does it matter if its a declining assett
Age alone can inhibit one’s ability to get a loan from a bank. Not sure if other lenders are available besides bank but would expect interest to be very high.
What about a mortage on the house of $30,000 over 25 years for a car and home repairs that will improve the value of the home , l think the repayments are about $80 a fortnight at 5% ,is that correct, easily affordable on joint income of $53,000 .They have no current mortage or any other debts and excellent credit rating. Do you think that could be successful. Theres no risk to the bank like a personal loan as the loan is secured by the house worth around $800,000
Would the home equity access scheme be useful?
have to be over 65 for that
I assume that the house had a mortgage on it at some stage in the past. If so, has the mortgage document been formally discharged? If there is still an existing mortgage document (but no current debt repayments ) then the financial institution that holds the mortgage would likely be happy to advance $15000, using the house as security. Good luck
no never been mortgaged
Hi we are two pensioners, only income in pension combined income $54,000. We own our own home outright, no mortgage or debts or credit card debts, and both have excellent credit rating. We are interested in buying a used car for $25,000. we can put in $5,000 and borrow $20,000 using the car as security, IT would be a 7 year loan ? would the payments be approx $300 a month? ALso how old would the car need to be? Do you think we would be eligable for a joint secure loan ?
Fortnightly upgrade cycle …
Their income has since gone up…
3-Feb : "combined pension income $53,000"
15-Feb: "only income in pension combined income $54,000"
The government must have increased the pension.
does it matter if its 53 or 54 its around that l dont remember the exact amount
Would We Be Eligable
Do you mean Eligible ?
thankyou english teacher
Do you think we would be
eligableeligible for a joint secure loan ?
No, I don't think so.
why not the bank has the car as security
https://www.boomerhomeloans.com.au/
BOOMER LITE - Low-interest rate Reverse Mortgage loan for those requiring an income top up or small lump sum.
In most parts of the country an 850k house = at least 2 empty bedrooms. Rent $100/week x2 rooms x 18 months =$15,000. 70% of rent is assessed on the income test, drops to 50% if you feed them once a day, only 20% if all 3 meals.
Hi l am thinking of buying a used car approx $25,000. l would put in $10,000 and borrow $15,000 using the car as security.
Would l be better off getting the car loan from my bank or the dealer l buy the car from, would the dealer be easier? Also if the loan is 7 years does that mean the car can be no older then 5 years?
Buy a car for under $10k and don't borrow money on a depreciating asset.
Would l be better off getting the car loan from my bank or the dealer
How would we know, have you compared the rates, fees etc?
Also, check which option you can negotiate better?
Perhaps try this https://www.canstar.com.au/car-loans/
I wouldn't worry about easier, which is cheaper? Also I'd look at a much, much shorter loan term. If you can't pay off a $15k loan in less than 7 years you really shouldn't be spending $25k on a car.
And yes, generally banks limit the car being 12 years old at the end of the lease. Which raises a second question, why are you buying a >5 year old car for $25k?
Because you can get decent, reliable cars for 25k that are around 5 years old.
The dealer isn't the one loaning you the money, they're getting a commission to refer you to a lender who is willing to pay for exclusive access to people who don't have the energy to shop around. /lazy tax
Neither… dont get loans on depreciating assets.
Also, NEVER use dealer finance. If it sounds better than the banks finance, the extra is baked in somewhere else. NEVER fall for the 0%, 1% or "Guaranteed future buy back" claims, ALL if these have it built into the price you are paying. No one is giving you a 0% loan.
Just paying off my 4 year lease balloon today.
I'm not sure how/why but it was 1.9% fixed with Macquarie Leasing (back in 2019).
Was cheaper than my home loan, so took up the lease instead.
1.9% finance was a promo at the time. I negotiated the car price first so dealer didn't care if I paid cash or finance.
Paid $62k including 3 years service package. Just paid the insurance, agreed value suggested by the insurer was $51,700. Last year's agreed value was $51,000. Crazy times.
Is it a Euro?
OP probably wants to get a high interest loan type to build a credit rating, instead of losing to a another payday vendor, or some dirty finsto pedalling consumer credit and flogging customer PII to Equifax+dog.
You already know the answer to this… it's always "until I get the confirmation bias I was looking for…"
And if they dont get it here, it's over to Whingepool or Reddit for their fix.
I haven't seen anything on Reddit by them, but they are definitely on Whirlpool
@kerfuffle: you must have lots of spare time on your hands and nothing much to do if you go searching internet forums for me
@cranswick: At least unlike you, I can actually do research.
Tip: Don't post the same question with the exact same text across multiple forums, and people won't call you out on it. That is laziness.
Use Canstar or other comparison sites to find the best deal, make sure you read all the details of the fine print and fees table.
I really get over the whole 'don't buy a car on finance comments etc…'. OP is asking for advice on dealer vs bank, not advice on buying a car using cash or a loan.
The answer is whoever gives the best rate including taking into account the fees. My guess is loans.com.au have a better deal than what the dealer and definitely what a bank can give you but still best to check finder.com.au or canstar etc.
In the OP's case, they only can service the loan using their disability pension. Not sure whether they'd even be able to take out any loan with no income apart from Centrelink
Depends on the lender. Some will consider pension as income given it is technically stable.
@Pelicannn: OP's chances are very low under any kind of pension other than a loan shark. OP should check with a lender first before asking us questions.
RateCity says yes, but you need to apply and find out https://www.ratecity.com.au/car-loans/pensioners
OP is asking for advice on dealer vs bank
Why can't the answer be neither of these two options? Some people are not financially savvy and think that borrowing $15k over 7 years when on a disability pension is a good idea. Should we only answer from the two options that people provide or offer another solution that they may not have thought about?
Yeah, but OP should go to a bank/lender and ask first and get some numbers to work with.
Needs a poll.
Personally, I'd probably say no. But then again, I saw this on ACA.