30k personal loan (help)

[merlin]

There is nothing wrong with getting a car loan - I know people are just trying to help, but nowdays cost of living is so high he would be struggling without a loan. He is only 18 and hasnt been saving for 20 years. Everyone says dont waste money on cars and it is great advice, but hey I'm addicted, your addicted, if your on this site your probably addicted.

My advice is to shop very smart for the loan - get one with low interest with no penalty for paying it off sooner. Don't go anywhere near a bank unless you have some perverse desire to pay fees for everything, find a good credit union and stick with it.

I've had 5 car loans since I was 18 (I'm 26 BTW), never had any trouble with them (usually keep the car for 12 months then sell it and pay out the loan, thus the need to have a good loan that lets you do this) and still had/have more than enough salary left to buy and pay off a house in the Sydney market - my only rule of thumb with car loans is $20K is my max limit (roughly $200 a fortnight repayment), anything above that comes out of my own cash.

[robjh80]

Originally Posted by Beetus

im not interested in a house..............

"But you will be"

Perhaps not right now, but probably a couple of years down the track,

It goes something like this

You get a girlfriend, she wants to live together, she then wants or accidently gets pregnant, you are then on a single wage supporting your lovely wife and child and hence get yourself stuck in the rental trap completely at the whim of the landlord who can kick you and your young family out into the gutter whenever he so feels like it, the rent keeps increasing annually at what is now at record rates never before seen in Australia, "oh and you also have a large personal loan on a depreciating asset to pay for, your old car!!"...........my point is you have to plan for your future now, as hard as it seems, it's the harsh reality.

Have you looked at the figures for a 30k loan from the bank, here's a screenshot of what it will cost you, this is based on todays unsecured rate of 11.49% over 5 years from a major bank, they will all be about the same rate.



As you can see the loan will cost you $659.63/month in repayments and over $9500 in interest charges over the 5 years..........your 30k loan has just cost you more like 40k in repayments................."big deal I hear you saying"

But of course it's actually much worse than this when you take into account all the dead rental money you'll be paying out over those 5 years as well, let's say $300/week (which is an extremely conservative amount), that equals a staggering $78,000 in rent over the 5 year period + $40,000 in loan repayments = $118,000.

And what exactly are you left with after 5 years when you'll be 23 years of age?..........."a 5 year old car worth ????"

"Do what others who know better are telling you from experience" and put your money into real estate which is appreciating all the time whilst saving you that dead rent money and slowly trapping you into a life of instability and uncertainty.

Whatever you pay for property today will be cheap in comparison to what it will cost you in the years to come.

I bought my own home at 22 and have never ever looked back, with the equity I now have in that property I can walk into any bank, throw the deeds over the counter and get any loan I want to buy any car I want........"if I so wished to."

Sorry about the long response, I just hate seeing young people making such decisions at an early age knowing that they will live to regret them when they get a little older and wiser, "nobody is going to look after you in this world but yourself."

[Bucket]

Beetus,

I'm 22, Dont earn as much as you but I also borrowed less...I saved 4000 and put it into the Car to reduce my repayments.
In WA from watching the real estate Market the past year, I would say you've missed the boat for Dramatic growth like there has been of recent.
For us to finance a house (the minimum being 200,000) Your looking at repaymets of 1100-1400 a month and I dont think 200,000 will get you into a house in Perth...maybe Mount Barker or somewhere like that.
I say, Get a loan on the car, pump more into the repayments so you pay less interest over the term and earning as much as you do, set up a strict budget to set aside money for the house deposit. If you're living at home, set asside the equiv (over the month) of one weeks pay (you could do more) for the car and the rest to live off and some for the house. Get out of debt with your car sooner rather than later and then you can focus on a house.

[Yellow_Festiva]

^ Spot On! Robjh80 ^

(I have done the same thing btw)

[4.9 EF Futura]

Im one of the people that supports debt in manageable amounts.

Debt is a valuable tool and when USED PROPERLY can do wonders for your standard of living. Same goes for rent. I rent a small place in a fairly affluent suburb... well within my budget to rent, i wouldnt even come close to being able to buy it. Ive had many a 'discussion' with those who tell me rent money is dead money. But that's a discussion for another time.

But here's the thing. 30 grand is a HUGE loan for a young bloke. I mean, absolutely huge.

Look, you've got your heart set on something, i doubt you'll listen to many people here... but for god's sake mate - it's ONLY A CAR. It's really not worth putting your life into hock for the next 7 years.

Ask yourself this question.

"In 5 years time, when the loan is still going.... am i still going to be infatuated with my car?"

And i mean - REALLY ask yourself. Get out of that adolescent frame of mind, look at your life from the outside and ask yourself that question. A lot will change over the next 5 years... including your frame of mind and your take on life.

Where do you see the economy in 5 years time? Your industry?

I really like robjh's post there. Particularly that last line. Yep - the Bank will lend you the money if you can afford it. And so they should, you're an adult. They are there to lend money, not to coach you on life decisions.

The post demonstrates some of the real costs associated with such a loan. I would call personal debt to that extent.... crippling... an extra $600 bucks in your pocket each month goes a LONG way in the real world.

put your money into real estate which is appreciating all the time

Lol.... but that's prob another discussion for another time

[Bucket]

One more thing...
How long do you plan on keeping the car for?

I used to work in a dealership and It hurt me to see people having to trade their pride and Joys in on something more practical when they find out they have a kid on the way or whatever.
One bloke I remember, came in with a nicely modded WRX...but couldnt fit the things needed for a family in the boot. He still owed on it and now wanted to borrow more money on his loan to get a family car...I went something more practical now that i can still enjoy for that reason.

[ED Classic]

He's 19 FFS Not everyone goes and pops a kid out by 25 and if you do you probly shouldnt be commenting on "The best way to build a finnancial future" whether it was an accident or otherwise.

300 a week rent an extremely conserevative amount? Geez are we talking within a 2 km radius to the CBD? Theres endless houses available at $220-$240max within 15km of Melb CBD. Only in Sydney could we expect much more and then your house to buy is probly going to be 500 grand instead 300 grand.

[charles_wif_xf]

Originally Posted by feebs

Honestly... never owe money on ANYTHING unless..

1) it earns you money
2) it is tax deductable
or
3) you live in it.

ANything else. pay cash.

And dont get a credit card

Most of us take a few too many years to learn the above.. if you start now you will do well.

Listen to feebs, he makes a lot of sense. I'm hanging to buy a BA Mk2 XR6T manual, but I'm waiting till I can pay KESH (paraphrasing the Lebanese dude on "The Castle").

I'm even seriously contemplating throwing some heat (and an engine rebuild) the XF's way just so I don't have to pay 25+ for a nice XR6T. About $6 large will beef up the XF and extend it's life another 10 years or so.

[05MkIIFutura]

Why do they even make XR's in utes. Anyone who actually uses the things to do what they are designed to do would'nt go near a worksite with a $45,000 ute.

Originally Posted by gtfpv

iwas 18 i was an apprentince at 16 in 7500, pa at 17 i was on 12000 and 18 25000 19 35000 20 40000
by the time i was 20 id had 3 cars took holidays every year went out drinking every week and had $ 40 000 cash in the bank .


and your on $1100 a week are 18 . havent got a cent and want to borrow money for a car ,!!!!
whats wrong with youngens these days . cant save a cent. if you cant save for something you'll always be in debt .

Originally Posted by Venomous

Lol in a year and a half working afterschool and weekends in fast food i saved up $5500. That was on fairly low wage, i don't think thats too bad!

Exactly.. i work at a supermarket part time (started working when i was 14, finished my VCE)... Paid for my car entirely, plus the $10,000 or more i've spent on mods... Plus mountain bikes worth around $5,000... Still got plenty in the bank. Just depends if you're money minded.

In relation to the thread, loans are bad news dude - save for what you want, it's much more rewarding and you'll enjoy what you buy if you actually own it properly.

[Bucket]

Originally Posted by ED Classic

He's 19 FFS Not everyone goes and pops a kid out by 25 and if you do you probly shouldnt be commenting on "The best way to build a finnancial future" whether it was an accident or otherwise.

300 a week rent an extremely conserevative amount? Geez are we talking within a 2 km radius to the CBD? Theres endless houses available at $220-$240max within 15km of Melb CBD. Only in Sydney could we expect much more and then your house to buy is probly going to be 500 grand instead 300 grand.

Woah, settle down...Im just asking some questions. Thinking a little further than now is smart. It's called covering your bases. Buying a 2 Seater anything can possibly be dicey if its your only car. Especially if you want to buy a house down the track. Refinancing a car Loan can be a pain in the *** especially if you get a car that depreciates at a very rapid rate. Say a Falcon compared to a Beemer.
And by the way...rent thats within 2km radius of the CBD in Perth is more like $400 if you want something thats not a studio and Perth is the 2nd Most Expensive Captial Real Estate wise to buy in.

[Neeek]

Robjh80's post is spot on. Not much else to say, really...

... although I will point out that at the age of 21, I took out a personal loan for GBP10,000, paying it back at 16.2 % APR (long story, no need to go into it now). I finished paying it off SIX years later and had nothing to show for it other than a big sigh of relief.

As far as personal loans go, I would advise against them unless they're small. Put the money towards a house because unlike cars, they're not getting any cheaper.

[atec77]

Originally Posted by Beetus

Hey everyone
IM in a bit of stick
I wanna get rid of my mr2 and get a 30k personal loan........ i got a 21k loan through a finance company im (im 18 btw) for my mr2 and my transit van i owe just over 18k left on it........ if i sell the mr2 and get that loaned payed off....... what is the chance of me a 18 year old gettin a 30k personal loan...... im 18 and a half...... ive had a 2 year 4k loan payed off in 6 months, and had the 21k loan if i sell my car payed of in 6 months 2.... i wanna go through a bank whats my chances........ i wanna get a au xr8 ute, fix my van up a bit and spend a bit on the ute....

DO you have a Pty Ltd ?
find an accountant and discover the advantages , it will cost $1000 if you register a company . why not wait and save , in 6 months saving 1/2 your income you will have a considerable amount , spend a little on the transit and each time you serivice it fix something else , you wont feel it and it's a good way for "fleet" maintenace .

WAIT a couple of months and SAVE..
good luck what ever you do .

[XR06T]

if you were to get the car lease it rather than get a loan for it..

i got a big loan young and it doesnt bother me..
and i wasn't earning what you are!

you would easily get loaned the amount you are after mate.

[Polyal]

Mate an 18yo on 1100 per week is a fair effort, are you a tradey? If so then as others have said, look into leasing etc

Also, while I am not your Dad, have you been oversea's on a holiday? If not, do it, go somewhere you have always wanted to, and see what other cool stuff is out there.

Cars are great, but going OS changed my perspective a bit, unless you are buying a classic etc then I wouldn't be getting something that is going to be near worthless in a few years.

Obviously your call though, do you live at home?

[xurbanx]

All the good stuff has been said but I'll tell you how I went with a loan. I'm 20 and I got my Fiesta when I was 19, knowing next to nothing about how the world works, dad went out and took a loan (Ford Credit) and the fixed monthly repayments were $400 for I think 5 years. That's $24,000 for a car that's now worth about $13,000-16,000 and I've still got roughly $16,000 left to pay.

It really puts things into perspective. If this thread existed before I purchased the Fiesta, I surely would've gotten something I could afford.

It's better to live your life without being in debt (for a 19 year old).

But if you're pretty keen on doing that, then grab a seat and take a long hard look at your situation. Other than that robjh's post is pretty much spot on.

[Escapee]

Personally i had a $25,000k loan for my car at 18, biggest mistake of my life. A car may be top of your priorities now but later on that will change and you will hate it and have lost alot of money. On the other hand if you have the capacity to pay it off quickly and avoid the bulk of interest i would say go ahead.

Why are you all house mad? Your better off saving your money and investing it into a managed account.

The only way your going to make money out of property is through capital gains which requires alot of research to purchase in the correct areas. Negative gearing is alot of crap as the ATO takes capital gains tax from you when you sell. The average return on a house after you take into account the amount of interest you pay, taxes and yearly inflation is roughly 3%. Not to mention the amount of people that buy and then lose their houses.

Investing into a managed fund on average returns 7-15% depending on the risk even going off 10% return. If you invest half what you would pay for buying a house you would still get a 7% return after inflation which is still better than buying a house and you dont have to spend all your time monitoring your money. That and you can always withdraw the cash if needs be and not be tied down.

Well just my 2c worth, id rather save 10 to 20% of my wage and still live a comfortable life.

[PHATXR8]

Mate

You need to find a good accountant. Find someone you know that has a successful business and ask them who their accountant is. A good accountant, preferably with a financial planning division, is essential if you want to:
- borrow money and/or restructure your loans
- advise on the best financing arrangement for your situation (eg: leasing, Hire Purchase, Chattel Mortgage, personal loan)
- advise on GST implications
- take into account the tax implications of your boorrowings, business structure, etc
- advise you on wealth creation plan to utilise your good income stream
- get your superannuation and insurances in place (income protection, workers compensation, life insurance).

Yes, I am an accountant and this is the sort of stuff I do every day. There are a lot of "experts" out there who like to give free advice, but the best advice you will get is that which you pay for from a reputable professional.

[Beetus]

ok geese lol ok ill tell u you exactly what is going on
Im a courier driver earn bout a grand a week after tax ( sub contractor)
im already paying off a 20k loan atm until i sell my car which is a mr2
I want a xr8 ute as is a good balance between something for a backup for work ( 1 week a year max) and something for play.
I dont want a house!!! lol
ill be 25 once i pay it off..............heaps of time for other stuff
btw cheapest house where i live is 220k for a shitbox
i have a kid the misses can use her car for the family (lack of missus tho) lol

I just rang the bank i can afford it easily and shouldnt be a problem to get. there is no penalty for paying it off early and the interest rate is 12%( unsecure loan) with loan insurance , 20k for the ute 10 k for mods and putting money into my work van. So the end result will be ill be paying exactly the same as what im paying on my current loan, ill have a backup car for work, my van will be in top condition, and the insurance on my car will be less, i dont want a house........................doesnt interest me

[Stubba]

I say go for it mate. i got a loan for 30k when i was 19 (im 23 now) and had it paid off in 2 and a bit years and now im looking at buying my house. A loan is not the be all to end all. Your only young once and everyones opinion is to buy a house but when it comes down to it, its your choice. And if it turns out to be a mistake then it does. We learn from these things. Just pay more than the suggested repayments, which on your pay you could do and then you will be fine.

[STK-XR8]

beetus,
contact my brother in-law joe he deals in loans of all types even gives good advice for those wanting info.

click on link below.


den

[MITCHAY]

Well you seem to be earning decent money and I bought my car with cash and I was earning way less than that. Only took about a year and a half.

[poolkeeper]

Originally Posted by 05MkIIFutura

Why do they even make XR's in utes. Anyone who actually uses the things to do what they are designed to do would'nt go near a worksite with a $45,000 ute.

I use my xr as a work ute, so does my dad with his pursuit- soon to be new tornado...

But on topic, dont get the loan..

[DOC]

Beetus, with all of this advice it must be very confusing, buy the house, pay cash, get the loan, darn it was supposed to be simple.

Well good news it is ( i think ) buy a house with wheels ( a mobile home / camper with trailer , pay half cash and half loan, this way you can cover all bases.

Or theres some good advice given by many ( Feebs post is about on the money for me ), good luck with it all.

[XRQTOR]

Originally Posted by 4.9 EF Futura

Im one of the people that supports debt in manageable amounts.

Debt is a valuable tool and when USED PROPERLY can do wonders for your standard of living. Same goes for rent. I rent a small place in a fairly affluent suburb... well within my budget to rent, i wouldnt even come close to being able to buy it. Ive had many a 'discussion' with those who tell me rent money is dead money. But that's a discussion for another time.

But here's the thing. 30 grand is a HUGE loan for a young bloke. I mean, absolutely huge.

Look, you've got your heart set on something, i doubt you'll listen to many people here... but for god's sake mate - it's ONLY A CAR. It's really not worth putting your life into hock for the next 7 years.

Ask yourself this question.

"In 5 years time, when the loan is still going.... am i still going to be infatuated with my car?"

And i mean - REALLY ask yourself. Get out of that adolescent frame of mind, look at your life from the outside and ask yourself that question. A lot will change over the next 5 years... including your frame of mind and your take on life.

Where do you see the economy in 5 years time? Your industry?

I really like robjh's post there. Particularly that last line. Yep - the Bank will lend you the money if you can afford it. And so they should, you're an adult. They are there to lend money, not to coach you on life decisions.

The post demonstrates some of the real costs associated with such a loan. I would call personal debt to that extent.... crippling... an extra $600 bucks in your pocket each month goes a LONG way in the real world.



Lol.... but that's prob another discussion for another time

I borrowed $35,ooo to buy my BA MKII xr8 when i was 19, i had the rest in cash. Since then iv'e spent another $2o,ooo on it between the blower, trim, brakes, wheels and what not. 2 & 1/2 year's later it's nearly paid off, i also now own a BF xr8 ute and as of tomorrow another Ba xr8 sedan. Sold a BF about 2 months ago i had bought and made $12,ooo on it.

A **** house in sydney is still worth $35o,ooo. Intrest only would be $5oo a week, thats half of what i take home each week in intrest only. For now i'll stick with my car's.............

[XRQTOR]

Funny part is ive been paying twice the amount of what im supposed off my original xr8 loan yet a few months back they wouldn't loan me another $2o,ooo so i could buy a BF i wanted, went to the commbank and i got approved on the spot and had the money at 9am the next day. Paid the loan out in 3 months.

If you have the means to pay it back comfortablly do it, your only young once.

[Lukeyson]

my bro got 29k loan at 18 last year to buy a BAXR8 easy, and he didnt have any form of credit rating

[GK]

Originally Posted by b2tf

sell the MR2, use that cash to make a nice payment on your loan for the transit. Fix the transit and keep on working, you'll have your 30k soon enough without even needing to take out a loan.

Some weeks I bring in less than half what you do and I still save minimum $200 every week. Just got to be smart with your money.

Coming from a 20 year old, that is smart (and quite mature) advice!

GK

[Beetus]

as soon as i sell the mr2 i think ill go for it...............i miss my fords.............ahhh the old ed v8 a bit slow that 1 was lol

[poolkeeper]

its only an au xr8 ute.