I am 30 and graduated last year. I have a student debt of around $30,000 from an overseas bank at an interest rate of 11% p.a. How do I get the loan transferred to Australia at a lower interest rate and shorter term ideally 3 years to avoid the currency risk?
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Firstly, a small disclaimer that financial advisers (generally speaking), are not licensed to provide loan advice under AFSL.
We are a little different here at AA Tax and Finance, as we also have an integrated mortgage broking department who holds a credit license.
You can transfer (or “refinance”) your student loan to Australia by taking an unsecured personal loan. You will be looking at similar interest rate though, if not higher. So this is quite likely not the answer.
With a “secured” loan, you should be able to receive a lower interest rate. However, you do have to provide additional “security”, or asset guarantee to your lender.
You can offer your property, such as cars, or the lenders’ favourite assets, real estate, as the security.
With vehicle you’d probably looking at around 8-9% p.a. interest rate, but with real estate security you can expect around the 5% p.a. mark.
Knowing that you are a recent graduate, I suspect you may have little assets.
Hence taking up a secured loan may not be a practical solution.
And 11% is a lot of interest, no matter what currency you are paying it in.
So the main issue here might be about how to repay this debt as fast as possible.
For one, I would advise that you re-examine your budget, and replace any unnecessary expenses (such as coffee, cigarettes, alcohol, gym, etc) to repay this debt as much as you can instead.
If you are still single (and have lots of spare time), it may pay to take up a second job, and dedicate all income from your second job towards paying this debt.
Any business interest that could increase your cash flow would be handy too. Check out AirTasker or similar outsourcing websites for those odd jobs in demand that your odd skills may fill.
Good luck Sam!
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