Evaluate personal loan eligibility based on income and credit. Explore lenders and consider alternatives like creditor negotiation, delaying purchases, and cost-effective dental care. Be cautious about relying on uncertain inheritances; seek financial advice for informed decisions.
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“I’m looking for some advice about getting a personal loan to get my life back on track and consolidate my debt.
I currently only work casually at 2 different employers, hoping one turns into full-time over the summer, so I don’t have much income at the moment, earning about $300-500 a week with expenses usually around the same per week. I currently owe around $2000 for a Gem Visa account and around another couple hundred for other overdue bills. I also am needing to pay around $900 for a car accident I caused ( I don’t own a car, so no insurance was borrowing it to move and back into an expensive BMW). I also have 3 impacted wisdom teeth that need removing as I can barely open my jaw.
I am thinking of trying to get a personal loan ( most likely through ANZ if they would accept one for me) of around 10k to clear my other debts and only have the one. I would also use it to buy a car so I could work more hours more easily and fix my teeth. From what I’ve researched, I could get a 7-year loan of 10k, which would be about $40 per week. But I would pay the debt off in full in January 2025 as I am getting a large inheritance then. My questions are: Is this an okay plan? Would I likely be approved for a loan? Any other options or advice?”
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First, it’s essential to assess your eligibility for a personal loan. Your income, credit score, and employment status significantly influence loan approval. Securing a personal loan might be more challenging with casual employment and possible credit challenges. Consider shopping around for lenders, as different institutions have varying requirements, and some may be more accommodating to your situation.
As a next step, explore alternatives to a personal loan. Negotiating with current creditors for manageable repayment plans or seeking financial counselling can help with debt management. Delaying the car purchase until your finances stabilise can reduce your financial burden. It’s also advisable to investigate low-cost dental care options for your wisdom teeth issue.
Lastly, be cautious about relying solely on expected inheritances. There can be uncertainties around inheritances, and it’s essential to have a backup plan. Relying on inheritance can be risky for several reasons. First, the timing and amount of an inheritance can be uncertain. There might be delays in the distribution of assets due to legal processes, and the final amount you receive could be less than expected after settling any outstanding debts or taxes. Consulting a financial advisor or credit counsellor for personalised guidance is wise for making informed financial decisions. Remember that more debt should only be considered after careful evaluation, ensuring it will improve your financial situation without adding to your financial stress.
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.
