Personal Loans: epidemic or clever option?

Australians are spending increasing amounts and many believe we are being seduced to spend at epidemic proportions. The pressure to enjoy a certain lifestyle and convey a certain level of wealth, reflected in our assets may be leading to a shallow nation. With our sense of pride in home ownership, we have indeed one of the highest rates of home ownership in the world, leading to a nation investing in their community, considerate of their surroundings. But can it be pride before the great fall?

It is easy to be cynical but options are few when rental prices are continuing to soar. Renter rights unlike our European counterparts are not strong, landlords can choose to make tenants move due to renovations, seeking to move in themselves and many more reasons are given and the tenant has little chance of creating a home in this rental climate.

Market value in the housing market shows a clear increase between 8% and 12% this year and this is on top of an increase of 13.6% in 2009. A sense of urgency has resulted in borrowers not only seeking high mortgages but personal loans to fulfil a desire to acquire a home. Can this be a sound investment? Reports are mixed, Rudd governmental investment has happened and the industry is growing but interest rates are also rising. Financial institutions are indeed cautious about lending but borrowers need to take a breath, assess this great investment and limit borrowings. Fujitsu Australia reported there were 218,700 households in Australia at risk of selling, attempting to refinance or lose their homes which is 2% up on last month due to excessive borrowing.

Caution and online financial tools should be used to support and advise. A personal loan may be the answer to a dream, just ensure that you have all the facts and assess the need before borrowing!