Join Australia's most dynamic and respected property investment community

Interest Free Sales

Discussion in 'Property Finance' started by Tim86, 11th Mar, 2016.

  1. Tim86

    Tim86 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,086
    Location:
    Brisbane
    Im wondering what sort of impact those harvey norman interest free sales have on your credit rating?

    Im currently in the process of hearing back from Nab about a refinance application. And Im not wanting to impact that application.

    The thing I want from harvey norman is $6500. We have the money to buy it outright but would prefer to have that money in our hands while we build an extension at our house. However if the bank came back to us and said "you cant service the new refinance loan with this harvey norman interest free loan" then I could simply pay out the harvey norman loan.

    Can anyone see a problem doing this?

    Thanks
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    Interest free purchases of consumer goods?

    These are treated like a credit card really. The total limit of the debt will be taken into account.
    Best to avoid in most cases.
     
  3. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,390
    Location:
    Somewhere in the land of Oz
    You don't need a new tele till you have walls and a roof! Back to work!! :D
     
    Johnny Cashflow likes this.
  4. Tim86

    Tim86 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,086
    Location:
    Brisbane
    I want my tv god dammit! Lol

    I put a deposit on it a few weeks back.

    I figure though if its interest free with only a $5 per month account fee then that is pretty damn cheap finance and if I can get away with still having my homeloan application relatively unaffected... then why not. It works out as getting $6500 borrowed for .9% cost per year rather than 4.8% cost with the homeloan refinance.

    And Ive already got a heap of building materials that will keep me busy for the next 3 months. So buying a tv wont hold up any progress :p except for the first week where I am in awe of my new tv and not working on the house.
     
    bob shovel likes this.
  5. Tim86

    Tim86 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,086
    Location:
    Brisbane
    Yeah I just rang harvey norman they say it is actually an interest free credit card setup.

    My main concern was that the bank would red flag these sorts of purchases when assessing your credit rating. As it might indicate to them that you cant afford day to day purchases.

    The other concern I had. Was say for example the bank comes back and says youre short for serviceability because theyve calculated a 20% interest repayment on your $6500 purchase. And you reply that youll just pay off the credit then so it doesnt affect their credit assessment. Im wondering if the bank would actually accept this as a solution. Or if they would just put you in the too hard basket and stop processing your loan?
     
  6. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,722
    Location:
    Sid en e - olympic city
    if you take it up, am pretty sure they will do a credit check, so your bank with then want to know about that, not a good idea if re financing, do it after ......
     
  7. albanga

    albanga Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,118
    Location:
    Melbourne
    My question. What TV are you buying for $6,500!!
     
  8. Tim86

    Tim86 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,086
    Location:
    Brisbane
    Okay thats what I was concerned about.
     
  9. EN710

    EN710 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,162
    Location:
    NSW
    Hmm, that might also limit your ability to negotiate price? I find usually cash transaction (or "give me big discount/ match this provider I buy now") get me better price.
     
  10. Tim86

    Tim86 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,086
    Location:
    Brisbane
    Plus the $500 deposit.

    Its a x94 sony 75inch flagship backlit led tv. Looks sooo good. Last year when it first came out it cost $14 000. I got it on a massive sale. Plus that 7k is with extended warranty and bonus wireless sub included (thats worth another $2500). So full rrp would have been $16500. So 7k is a good price considering. Not that my wife is convinced by that argument :p

    Im holding back watching new house of cards because I want to watch it in 4k on the new tv. Very hard to practise self control right now haha.
     
    albanga and Perthguy like this.
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    Your crazy!

    That TV will be worth $500 in 2 years.

    My Big TV cost me about $400.
    If you bought a cheapy and invested $7000 at 5% pa you would be making $350 income per year for the next 30 plus years.
     
    York, joel, JohnPropChat and 2 others like this.
  12. Tim86

    Tim86 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,086
    Location:
    Brisbane
    Haha penny pincher. This and my $25000 swim spa is my reward for 5 years of working my butt off. Got to reward yourself at some point. My wife is getting herself a fancy couch lol.

    The tv is only 1 months worth of savings so its not putting me back too far.
     
  13. EN710

    EN710 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,162
    Location:
    NSW
    Does the swim spa work? I'm considering
     
  14. Tim86

    Tim86 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,086
    Location:
    Brisbane
    Ive tested thr oasis swim spa. I found that its really not great for actual swimming unless you have the harness on also. I found the jets werent enough to keep my back half up. But I just want it mainly as a massive spa bath that isnt too awkward to share with mates.
     
    EN710 likes this.
  15. JohnPropChat

    JohnPropChat Well-Known Member

    Joined:
    10th Sep, 2015
    Posts:
    567
    Location:
    Perth
    If $6.5k is only a month savings then negotiate the price down, pay cash and move on. Best to have a clean credit file.
     
    Terry_w likes this.
  16. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    4,954
    Location:
    Sydney
    I've bought the TVs for my Airbnbs from Gumtree. People need to get rid of their stuff when they leave Australia.... so you can pick up good second hand fairly new tvs for a bargain...
    They are way better than the tv at my home....
     
  17. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,173
    Location:
    Adelaide, SA
    It'll be a hit on your credit file and be treated as a credit card. If servicing is an issue, it can be cleared and the bank will just ask for an account closure letter from the credit company.

    The real issue is if you have a very active credit file, then adding an unsecured credit hit onto an already hot file might be the straw which breaks the camels back.
     
    Terry_w, Tim86 and Perthguy like this.
  18. Perthguy

    Perthguy Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    4,798
    Location:
    Perth
    You should really check with your broker (or other good broker) but as far as I can see it should be treated the same as any other credit card? You would have to find out how much the credit card affects your ability to borrow.

    EDIT: Corey beat me to it :p
     
    Tim86 likes this.
  19. Tim86

    Tim86 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,086
    Location:
    Brisbane
    Already got the price down. This is the tv and its normal price. Keep in mind it started off at 14k 75 inch X Series BRAVIA 4K LED backlight / 3D TV

    The equivalent samsung flagship tv is still 16k i think.
     
    Perthguy likes this.
  20. Tim86

    Tim86 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,086
    Location:
    Brisbane
    I dont think it would affect serviceability too much. At least not with nab. But Ive had lots of credit hits with lots of refinances lately so probably thats the biggest concern.