Mother-of-two warns against rushing into loans as she struggles to pay off $26,000 in INTEREST for a $40,000 car
- Mother-of-two sounded alarm on high interest rates after taking out car loan
- Gertrude and partner took out a car loan with 13.99 per cent interest rate
- The pair were in desperate need to buy a $40,000 car for their growing family
- Now the Alice Springs resident claimed she will have to pay back $66,000
A mother-of-two has sounded the alarm on exorbitant interest rates as she claims she will have to pay back $66,000 after taking out a car loan for just $40,000.
Gertrude*, who asked for her last name to be withheld, has spent the last two years trying to pay off a car loan with an interest rate of 13.99 per cent.
She currently rents a place with her partner at Alice Springs, in the Northern Territory, and must set aside $370 a fortnight to pay off the mounting debt.
Her partner works full time while Gertrude stays at home to look after their children.
She said living off one salary placed added strain on the family as they tried to pay off the loan they used to buy a Toyota LandCruiser.
A mother-of-two has sounded the alarm on exorbitant interest rates as she claims she will have to pay back $66,000 after taking out a car loan for just $40,000
‘It’s our highest and only real remaining debt,’ she told Daily Mail Australia.
‘It’s massive. After grocery shopping, we really struggle. Most fortnights we have to borrow money from our parents.’
Gertrude took out the loan in 2017 when she was heavily pregnant with her first child and had to leave work because of medical complications.
She said at the time, she and her partner were desperate to buy a reliable family car.
‘You are isolated living in central Australia. The closest family I have are a 20 hour drive away, while my partner’s family live 27 hours away.
‘I didn’t want to drive my newborn baby in a car I didn’t feel was safe.’
Gertrude claimed that the lender sweetened the deal and offered to pay for the couple’s flight to Adelaide so they could pick up their brand new Toyota LandCruiser.
She said the lender was well aware that the couple were only living on one salary, before the couple signed off on the loan.
The loan was taken out under her husband’s name, while Gertrude was a witness.
Two years on and Gertrude said her family have been struggling to pay back the money ever since.
‘I’ve never had credit card debt or consumer debt. But since taking the loan we’ve been late on a few payments on utility because we’ve been struggling.
‘Then there are the debts with our families.’
On top of the debt, Gertrude claimed that the company did not inform her family that they had incurred a late fee.
Gertrude took out the loan in 2017 when she was heavily pregnant with her first child and had to leave work because of medical complications (pictured, an image of the Toyota LandCruiser that the couple bought)
‘There was a period where my husband changed employers, and there was a day where it overlapped into the following fortnight when we had to make our payment.
Gertrude claimed she was charged an extra $20 a fortnight for the next six months, before she realised what was happening.
‘Nobody rang us to tell us what was happening. We only noticed it when we received our statement at the end of the year.’
While Gertrude said she felt the lender was partly to blame, she regretted rushing into the loan and admitted she should’ve taken her time to shop around for other offers.
She warned other families to take their time to compare other deals before they signed off on any loans.
‘Compare the rates with others on the market and don’t take out any loans out of desperation.
‘And also educate your kids so they are financially literate. If I knew what I was doing back then, I never would have signed on the loan.’
* Disclaimer: The real name of the woman has been omitted to protect her identity