Struggling with debt and considering a personal loan? Get expert advice on managing your finances and repaying debts in this informative article. Learn how to assess your financial situation, prioritize debts, and communicate with creditors. Presented by Clive Fernandes, a financial adviser.
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“Turning to reddit for some advice as I’ve found myself in a bit of a jam at the moment.
I’ll keep it short and sweet. I’ve got about $7k in debt for a vehicle I no longer have ( crashed and had no insurance) and another $3k to pay off to family as soon as possible as I’m being pressured.
I only have a $3k emergency fund as I had some family emergencies last year which drained most of my savings.
Is it worth applying for a personal load via a bank? (ANZ has a 12.99% interest and ASB is 13.99%) If so, what’s the best reasoning? I don’t even know what to say when applying for a loan. I’ve never applied for a loan or a finance and an I have a credit card with a $1500 limit that is currently maxed out (said breathing room)
I’m 27 years old, have a decent job, making about $900 a week.
My weekly expenses are Rent $300 Food$250 Misc. $100
I have NO fuel, vehicle or phone bills as my work pays for all its.
I thought about the loan as I though it would give me some breathing room and settle my affairs with the bank instead of having to deal with my creditors as it is stressing me out to owe money.“
(Original question on Reddit)
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I’m sorry to hear that you’re going through a tough time financially. However, It’s great that you’re looking for ways to manage your finances and pay off your debts. Here are some steps you can consider:
Assess Your Finances:
You mentioned that you have a $3,000 emergency fund. Before taking on additional debt, evaluating your overall financial situation is crucial. Make a detailed budget to understand your income and expenses. This will help you see where you can make cuts and allocate more funds towards your debts.
Prioritize Your Debts:
Identify which debts are more urgent. In this case, it seems like paying off the family loan may be your top priority since you’re being pressured. Try to negotiate a reasonable repayment plan with your family.
Talk to Creditors:
If you’re unable to make payments on your $7,000 vehicle debt, it’s essential to communicate with your creditor and explain your situation. They might offer some flexibility in terms of repayment or interest rates.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
