Cashback finance: is it as good as it seems?

Thursday 04 February, 2021

Currently, there are multiple instant cashback incentives available when you refinance your loan. But is the offer really as good as it seems?

The thought of instant cash in your account can sometimes cloud your decision-making and end up costing you more money in the long run.

Don’t get us wrong – sometimes these offers can be as good as they sound, but it’s important to do the research to ensure you’re getting bang for your buck.

The first step is to look into the interest rate and to do the math. For example, if a bank is offering $2000 cash back, but the offer includes a slightly higher interest rate than your existing loan, you will end up losing that $2000 over the life of your loan.

Not only that, does the new loan offer everything you need or required previously? For example, does it offer flexibility? Can you make extra repayments? Can you create an offset account (if required)? Is it a fixed or variable rate? Everyone’s financial needs are different, but make sure you’re comparing apples with apples and not missing out on any of your non-negotiables!

The same rules apply with cashback credit card deals. Whether it be instant cashback or cash rewards on purchases, often you will find that it will end up costing you more money (if you’re not careful), as often these cards incur high interest rate charges or annual fees.

Always read the terms and conditions that surround each financial decision, better yet, let us do it for you!

If you’re in need of instant cash, there are many other ways around this – at Finance Brokers Tasmania we will be able to guide you through the solution best tailored to your financial needs.

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