Sometimes, we like to think we have everything under control, but then life happens: your car breaks down, your dog gets sick and you have to fly cross country at the last minute to comfort your sister through a bad breakup.
And according to SocietyOne’s ‘When ‘It’ Happens Report’, life’s little speed bumps are costing Aussies across the nation big time.
The report revealed that 65% of Aussies have experienced large and unexpected costs in their life, totalling to over $52.44 billion.
Car repairs or replacements, holiday and travel costs and medical bills were the top three most common unexpected costs, hitting 36%, 29% and 25% of Aussies, respectively.
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Looking at how Aussies dealt with unplanned financial costs that aren’t covered by savings or insurance, the report found that four in five Aussies believe that a credit card is an easy source of funds, and that they were more convenient than taking out a personal loan.
Over a quarter (28%) of Aussies were even willing to take on the extra credit card debt when an unexpected cost arises.
“When ‘it’ happens, and you need a loan, you should reflect on whether you’re getting the best deal and if a quick fix high interest credit card is the best option,” said Mark Jones, SocietyOne CEO.
“With one in five (20%) Australians facing unexpected costs having expenses worth more than $5,000, and a national credit card debt of $45 billion, there may be a better alternative to dealing with ‘it’ than putting it on plastic.”
To put things into perspective, we took our credit card debt payment calculator for a spin. Say you had a $5,000 credit card balance on the average interest rate in our database of 17.1%, if you made monthly repayments of only around $150, you’d accrue $2,031 in interest.
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A personal loan miscommunication
One issue the report highlighted was the misconceptions surrounding personal loans, which could be the reason more Aussies are turning to their plastic in troubled times.
Getting specific, 55% of Aussies felt that applying for a personal loan was difficult and would take up to 4.5 days to be approved.
But according to SocietyOne that’s not the case - in fact, it said 50% of it’s personal loan applications are approved in the same day.
“When you need money fast, the last thing you want to do is spend hours filling out an application form and waiting a week for the money to appear,” said Jones.
So for the Aussies currently stuck in a sticky situation, you do have a few options when it comes to getting your hands on some quick cash. Luckily, our Mozo editors have handpicked some great personal loan options with speedy application processes below.