Discounted rate of 10.49%... really?

I've got an unsecured LOC at 11.39% which is a pretty good rate, so 10.49% sounds like a good discount if its unsecured.

I had 100K in it at the February mark - that hurt on a weekly basis until I was able to refinance

How much are you borrowing? I can give you another 1% off if you like

 

Haha fair question - its likely unsecured lending so that makes its competitors other personal loans. Banks work by saying everything is discounted, it helps 'sell' to consumers. I.e. with the majors you may get a 1.3% discount of the SVR - and end up paying more than someone with no discount from an alternative lender. Also the same reason why supermarkets put those yellow stickers on tim tams, etc (it works on me, or maybe i'm subconsciously looking for reasons to justify the the tim tams!).

 

I had one of these, it was at 13.69% so I'd be happy with 10.49

 

10.49% is really good for unsecured lending - I probably wouldn't use it to buy a house though

 

Exactly - for an unsecured debt that's fairly competitive, only marginally more expensive than second tier secured debts (car loans, business etc)

 

It's a good rate, I regularly and happily pay similar or higher for unsecured loans.

 

I've got one of those loans. As discussed above it's a unsecured personal loan rate not a mortgage rate. It helped pay deposit on an IP.

 

How does unsecured lending hurt the credit score?

 

But it is half the cost of most credit cards and gives you the opportunity to consolidate alot of these smaller debts which are at exorbitant rates.

 

My broker pointed me in the direction of a Citibank personal loan - 5.99% if you pay it off in 2 yrs. pretty good. Haven't really looked into it too much but I think you can only borrow up to 30k or thereabouts?

K

 

Rolf, but does it hurt credit score if the payment is prompt and stuffs? I'm thinking to use this to build my position further. Say I have a few of these revolving ones and build them up in a ladder system, suppose you can do it with a few banks and get cheap loans that way and clear them every 6 months and get into a position 6-12 months faster. Only thing is, does it hurt credit score such that getting a loan would be difficult?

 

Refinancing personal loans on a 6-12 month basis to extend maturities/interest free periods will definitely hurt credit scoring - the increased activity alone won't help as well as personal debt doing more damage than secured lending. Having a series of them on your file may raise questions from the assessors if it gets that far too (pass credit scoring).

 

It can be a good idea unless it's going to impact your serviceability for other loans.
As you said there are no charges if you have it at $0 and it can help with SANF especially during a development when some extra charge may spring up at the end/middle and you have a wtf moment.
When applying for it you have a choice to nominate an amount or let the computer determine an amount for you. The computer generally gives you more. Also there is an option to have insurance on it - say yes even if you don't want it - as the amount the computer will give you is then more. You then have 1-2 weeks cooling off on the insurance to turn it off and it won't affect the amount that the loan was approved for.
It's not a cheap cheap tool but if used effectively and with regard to your future serviceability it can be used powerfully.

 

@wylie
City bank let you borrow upto 60k unsecured. But to get the 5.9% you must not spend more than 48k which is 80%. Anything over the 80% will be charged at just over 19%. Over 2 years, if it goes past 2 years you start paying 19%. Pretty good deal I reckon.
I believe it's $130 to start up the account. Enquired about it last week.

 

Having multiples would hurt but if it's like the flexi loan and it's taken down to $0 it still exists and can be reused again and again without a new credit hit.

 

Bloody hell that's a great deal. Might look into it myself. Thanks.