Clever use of stimulus package can help clear credit card and home loan debt quickly
Those wanting to improve their money management situation may find that the government’s financial stimulus package could be of particular benefit.
In a Business Day article, Bina Brown suggests that putting the $900 payment towards a home loan can significantly reduce people’s length of repayments.
As an example, she points out that putting this sum towards a $350,000 home loan on a standard variable interest rate of 5.96 per cent over a 30-year period could generate total savings of $4,435, reducing the term of the loan by two months.
Meanwhile, Louise Biti, director of financial planning consultants Strategy Steps, claims that those using the $900 to reduce debts on a $2,000 credit card bill where only the minimum payments are being made could not only see the term of payments be cut by almost 11 years but also save them somewhere in the region of $3,036 in interest and fees.
Aussies wanting to sort out their finances may also want to search for low interest home loans and compare credit card deals.
Writing in the Brisbane Times, financial expert Ross Gittins recently claimed that people should not feel guilty about taking steps to pay off their credit cards and prepare themselves for the future by putting cash into savings accounts.
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