How to beat interest rate rises?

All too many people relegate their money affairs to the bottom of their things to do list. As a consequence they end up losing thousands of dollars or find themselves paying more than they should. This is especially relevant to interest rate rises where all that’s needed is some simple ground work which will make a massive difference.

If you don’t have time get someone who does. Click here for help.

If you have the time consider this :

For those with home loans

1. Get a new loan package – Many lenders offer what they call professional packages. These are loans that offer quite significant discounts (up to 0.7%pa off the standard variable interest plus a number of other benefits such as free offset accounts, free loan splits etc. Look into switching now as you could qualify for the discount which by the way lasts for the life of the loan. Saving you many thousands of dollars over the life of the loan. Also note that you can fix all or part of these package loans.

2. Use fixed rates for your loan – If you want some certainty for say 3, 5 or even 10 years you can always “lock it in!” But I do suggest that you set up your loian according to your circumstances. This means for example if someone who needs total certainity like my brother with a set of twins fixing all the loan may suit. Again, it is best to discuss your options with your lender or broker.

For those with personal loans, credit cards and a home loan

1. Consolidate – If you have equity in your home it will definitely be worth your while to consolidate all your debts it all into one loan. You will now only have one repayment and chances are that it will be less than all of the repayments put together. While you are there lock in some of your home loan at a fixed rate to give you some security. Also back off on the credit card spending moving forward.

For those with credit cards

1. Look for a better deal asap – Credit providers will be all to quick to raise rates on credit cards following last weeks rate rise. So do yourself a favour and check out a better deal. www.infochoice.com.au or ask your current card provider for a better deal.

By Greg Smith