News Information and Media Site: Don't Make This Mistake: How A $16 'Buy Now, Pay Later' Debt Blocked A Woman From Getting A Home Loan Despite $100k Savings

Newsletter Sep 16, 2024

Don't Make This Mistake: How A $16 'Buy Now, Pay Later' Debt Blocked A Woman From Getting A Home Loan Despite $100k Savings

Lou was denied a home loan despite significant savings.

Buy-now-pay-later (BNPL) apps have surged in popularity, especially among younger generations, who are drawn to the ease of access and flexible repayment options. However, as more people use these services, defaults and delinquencies are also rising. Factors such as a slowing job market, wage stagnation, and high inflation are straining household budgets, making it harder for borrowers to manage their financial obligations. For instance, Lou, a 22-year-old student and full-time worker, was surprised when her mortgage application was denied in part due to a $16 debt from an Afterpay BNPL account, despite her excellent savings and credit history.

Lou, who is studying commerce and IT at Macquarie University, had saved $100,000 for a home downpayment and had never missed a loan repayment in her three years of using credit. However, her $38,000 HECS-HELP debt, a student loan managed by the Australian government, significantly reduced her borrowing capacity by up to $90,000. This unexpected shortfall delayed her property purchase plans. After eventually securing a pre-approved loan from an online lender, the lender flagged her small BNPL debt and required its full repayment before approving the mortgage.

Experts like Soren Financial's Mansour Soltani advise borrowers to close BNPL accounts before applying for home loans, as these debts can severely reduce borrowing capacity. He explained that BNPL accounts are scrutinized by lenders, who may view them as risky, particularly when used for essential expenses like utility bills. Soltani also noted that HECS debts are treated similarly to personal loans, with substantial impacts on home loan serviceability. Borrowers must clear their entire HECS debt to improve their chances of securing a loan, as partial repayments are not sufficient. (Full story)

Team Lead Slams HR And Boss After Finding Out She Gets Paid Up To £9K Less Than The People She Manages

Olivia, a team lead, discovered she was earning up to £9,000 less than her subordinates, sparking a heated exchange with her boss, Tom, and HR. Despite her significant contributions, including increasing client spending by 30%, Olivia's concerns were dismissed, with Tom claiming salary structures were complex and tied to industry norms. Frustrated, Olivia confronted HR directly after learning junior employees earned more than her. Her experience underscores broader issues like pay disparity, gender pay gaps, and salary transparency. Career experts advise employees to research market rates, negotiate salary adjustments based on performance, and consider new opportunities if underpaid. (Full story)

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US VP Kamala Harris Outlines Plan To Trim Living Costs As It Remains Americans' Top Concern

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Gen Z, Millenial Women Are Throwing 'Success Showers' To Celebrate Personal And Professional Milestones

Gen Z and millennials are embracing a new trend of celebrating personal and professional milestones with "success showers," akin to bridal or baby showers but focused on achievements beyond traditional life events. Morgan Prouse, a PR executive, popularized this concept by hosting a "success shower" to mark her career advancement. These celebrations, often among ambitious women, highlight professional successes and personal achievements outside of marriage and motherhood. With younger generations prioritizing career and financial independence over traditional milestones, success showers provide a way to honor these accomplishments. Women like Kellie Gerardi and Amy Chan are leading this movement, using these events to celebrate significant career milestones and encourage others to recognize diverse forms of success. (Full story)