Credit Concern: Australians taking out personal loans at Christmas more likely to default
Announcement posted by Credit Savvy 13 Dec 2016
13 December 2016, Sydney, Australia: Credit reputation website, Credit Savvy has released findings that show Australians are 1.5 times more likely to default on personal loans taken out before Christmas than at any other time.
The research, performed by credit reporting agency, Experian - on credit trends over the last two years, also notes that there is a 10% spike in Australians applying for personal loans in the December quarter.
Credit cards are not exempt from this concerning trend, with a 10% increase in defaults for credit cards taken out at this time of year.
Dirk Hofman, Managing Director of Credit Savvy encouraged Australians to consider the potential effects on their credit score as a default would remain on their credit file for five years, and any missed repayments leading up to the default can also be recorded for two years.
“We can certainly appreciate the need for credit at this time of year, but we’re hoping Australians go about it in a way that minimises the impact to their credit reputation,” he said.
“It’s important to work out how much you can afford to borrow and realistically pay back each month so that you don’t overextend yourself financially.”
Mr Hofman suggested that a good course of action for consumers was to do their homework first using free online resources.
“Make sure you’re getting a competitive interest rate – there are even personal loans available which reward higher credit scores with better interest rates. You can use a free resource like Credit Savvy to check your credit score and compare credit products side by side.”
About Credit Savvy
Credit Savvy.com.au is an online credit reputation service that provides Australians with free and ongoing access to their credit score and credit report summary, resources to understand credit reporting, and the ability to compare hundreds of credit products in one place.