The Good, the Bad and the Ugly Debt

When organising finances, it is vital that people sort their good debt from the bad, writes personal finance expert Helena Keers.

In a special report for the Age, she explains that locking yourself into a long-term low interest home loan is a different matter entirely from racking up large bills on personal loans or credit cards.

She added that while credit cards often have a sting in the tail, pay-day loans and bridge loans are by far the ugliest of all debt to get involved with as they typically come attached with exorbitant repayment charges.

“On the other hand, mortgages are probably the best loan you’ll get because the interest will be relatively low. Borrowing against your house is a way of increasing your wealth,” she continued.

And while the financial crisis is likely to weigh down on Aussies, those on the hunt for a new home loan could find there are some excellent bargains to be had in the coming months, with many experts forecasting that rates will fall further.ADNFCR-1761-ID-18994640-ADNFCR