Q. I have a black spot against my name because of a problem with my department store card. I have a personal loan and I purchased a car last year on hire-purchase. My total repayments are $920 a month. Should I try to get a loan now, or wait another 12 months? My personal debt should be cleared by this time.
 
A. While you are likely to be able to obtain finance with one of the so-called non-conforming lenders, the chances are that they will charge you a higher rate of interest than your typical financial institution.
 
My advice would be to pay off the personal loan as these rates are usually quite high. Ditto with your hire-purchase agreement. Unless the home of your dreams appears on the horizon, I’d strongly advise waiting until your credit record is clear before thinking about a home loan. Not only are you likely to save by paying a lower interest rate, you won’t be placing such a high demand on your income. The less debt you have to pay off at the one time, the better!
 
You can check your credit history for free by visiting www.mycreditfile.com.au

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