RateCity.com.au
powering smart financial decisions

5 money issues that could ruin your marriage

5 money issues that could ruin your marriage

A great marriage may be based on rock-solid principles of love and respect, but money has a way of shaking the foundations of even the most secure relationships.

Here are five money issues to watch out for, whether you’re starting a new relationship or if yours is already well-established:

Starting off with a debt

Weddings don’t have to be expensive, but when you’re throwing a big party for two families, plus assorted friends and hangers-on, the cost can quickly add up.

To afford their dream wedding’s hefty price tag, some couples go deeply into debt, maxing out their credit cards or taking out personal loans. This can lead to more money problems further down the line as they struggle to manage the repayments on these debts.

While the wedding of your dreams doesn’t have to be impossible, it’s important to be realistic about the costs involved, and to be open to making compromises where necessary. If you decide that your wedding is worth going into debt for, make sure you’re confident that you can manage the repayments without risking your financial future together.  

Getting joint accounts before you’re ready

A whirlwind romance can be wonderful, but comes with its share of risks. While you may want to share everything with your partner, from your home to your name, it’s often worth taking a moment before combining bank accounts or credit cards.

If the relationship breaks down for any reason, it can be difficult to disentangle your individual finances from your shared accounts, and disputes over who owns what can be hard to resolve fairly. In a worst-case scenario, your spouse could run up a huge debt on a shared credit card, or drain your shared savings account, before leaving you with no savings and a damaged credit rating.

Keeping money secrets

It should be obvious that secrets and lies can lead to relationship problems. And when it comes to money-related secrets, you not only risk  personal problems such as trust issues, but serious financial problems that can affect both of your finances.

Financial secrets in a relationship can include concealing spending, hiding past debts, or maintaining a personal bank account or credit card without a partner’s knowledge. For keeping your finances and your relationship equally strong, honesty should be a priority.

Incompatible money values

There is no “right” way to manage your household finances – it all depends on your individual circumstances. If two partners have two different opinions on what’s best for their shared financial future, it can lead to disagreements, which can lead to problems.

For example, some people firmly believe in the Shakespearean wisdom of “neither a borrower nor a lender be” and are against going into any kind of debt. This principled attitude can be problematic if their partner is a believer in “spend money to make money”, and is in favour of using a manageable level of debt to reach their financial goals, such as taking out a mortgage to buy a home or investment property.  

In cases like these, a degree of compromise may be required, along with plenty of communication. Which leads us to our final money issue that could ruin your marriage:

Not making plans together

While joint finances come with its share of risks, so does keeping your finances completely separated. Unless a couple co-ordinates their efforts, reaching their financial goals, either individually or as a team, could take much more time, effort, or expense.

It may not be fun, but working out a household budget can be a big help when it comes to making money decisions as a couple. As well as counting on one another, couples can find additional support from a qualified financial planner or broker, who can take their individual circumstances into account when offering money advice.

Did you find this helpful? Why not share this article?

Advertisement

RateCity
ratecity-newsletter

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.

Advertisement

Learn more about personal loans

Does refinancing a personal loan hurt your credit score?

Personal loan refinancing means taking out a new loan with more desirable terms in order to access a more competitive interest rate, longer loan term, better features, or even to consolidate debts.

In some situations, refinancing a personal loan can improve your credit score, while in others, it may have a negative impact. If you refinance multiple loans by consolidating these into one loan, it could improve your credit score as you’ll have only one outstanding debt liability. Your credit may also improve if you consistently pay the instalments on time.

However, applying to refinance with multiple lenders could negatively affect your credit if your applications are rejected. Also, if you delay or default the repayment, your credit score reduces.

Can I include my spouse’s income on a personal loan?

If you apply for a joint personal loan with your spouse, you can include their income on the application. If approved, they then become jointly liable for the loan.

Both you and your spouse need to meet the eligibility criteria, such as income, age, and residency requirements, as stipulated by the lender. A joint loan could increase your chance of approval for a higher amount, as both borrowers’ incomes are assessed when determining borrowing capacity. 

What are the Westpac personal loan eligibility criteria?

The process to apply for a personal loan from Westpac is simple and can be done online. To be eligible for a Westpac Bank personal loan, you must meet the eligibility criteria. These include:

  • You should be over 18 years old
  • You must be a permanent resident or hold a valid visa with confirmed employment in Australia
  • You should earn a regular and permanent income of at least $35,000 before taxes

If you feel you meet these eligibility criteria, you can apply for a personal loan with Westpac. With your application form, you’ll also have to submit the following documents:

  • Personal details including name, contact information, and residential address 
  • Proof of identity such as drivers licence or passport details
  • If you’re self-employed, you’ll need a list of assets, savings, investments, and liabilities as well as your most recent tax return information
  • If you’re an employee you’ll need to submit information related to your employment and finances like bank statements and payslips

Westpac Australia personal loans are available for amounts from $4,000 up to $50,000 and loan terms of up to seven years.

What is a credit rating/score?

Your credit rating or credit score is a number that summarises how credit-worthy you are based on your credit history.

The lower your score, the more likely you are to be denied a loan or forced to pay a higher interest rate.

What do credit scores have to do with personal loan interest rates?

There is a strong link between credit scores and personal loan interest rates because many lenders use credit scores to help decide what interest rates to offer to potential borrowers.

If you have a higher credit score, lenders will probably classify you as a lower-risk borrower. That means they’ll be keen to win your business, so they may offer you a lower interest rate if you apply for a personal loan.

If you have a lower credit score, lenders will probably classify you as a higher-risk borrower. That means they might be concerned about you defaulting on the loan and costing them money. As a result, they might protect themselves by charging you a higher interest rate.

Do student personal loans require security?

While some personal loans can be secured by the value of an asset, such as a car or equity in a property, student personal loans are often unsecured, which typically have higher interest rates.

Some lenders also offer guarantor personal loans to students. These loans have lower interest rates, as a guarantor (usually a relative of the borrower with good credit) will fully or partially guarantee the loan, taking on the financial responsibility if the borrower defaults.

Can I apply for a quick loan online?

While some lenders will require you to provide paperwork in person, many lenders will allow you to make an application for quick personal loan online. You’ll still need to provide information on your identity, income, and loan purpose in most cases.

Can I get a fast loan if I’m unemployed or on Centrelink?

Even if a lender has no credit checks, they will usually still need to confirm you can afford to repay a fast loan on your income before they’ll approve your application.

If 50% or more of your income comes from Centrelink payments, you may find it more difficult to have a fast loan application approved. Consider checking with the lender before applying to confirm if they lend to people on Centrelink.

Can I get a $4000 personal loan if I’m unemployed or on Centrelink?

Before most providers of personal loans or medium amount loans will approve an application, they’ll want to know you can afford the loan’s repayments on your current income without ending up in financial stress. Several lenders don’t count Centrelink benefits when assessing a borrower’s income for this purpose, so these borrowers may find it more difficult to be approved for a loan.

If you’re unemployed, self-employed, or if more than 50% of your income come from Centrelink, consider contacting a potential lender before applying to find out whether they accept borrowers on Centrelink.

How long does it take to get a student personal loan?

Completing an online personal loan application can often take anywhere from 10 minutes to 1 hour. Depending on your lender, processing your personal loan application may take anywhere between 1 and 24 hours. If your personal loan application is approved, you may receive the money in your bank account the following business day, or, in some cases, the same day.

Can I repay a $3000 personal loan early?

If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.

Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.

Are there $2000 emergency loans?

If you’re having trouble being approved for a loan of less than $2000 and urgently need to purchase household essentials, there may be emergency loan options available to you.

For example, the No Interest Loans Scheme (NILS) allows low-income borrowers to take out interest-free loans of up to $1500 for essential goods and services.

For further assistance, consider contacting a financial counsellor, or calling the National Debt Helpline on 1300 007 007

Are there low doc personal loans?

Self-employed borrowers may be eligible for low doc personal loans, which require less documentation in their application process than many other personal loan options.

It’s important to remember that though low doc personal loans may require less paperwork, you may need to provide additional security, or pay a higher interest rate.

Can unemployed single parents get personal loans?

It can be more difficult for unemployed borrowers to successfully apply for a personal loan. Most lenders require borrowers to have a regular income available to cover the cost of loan repayments.

If you’re self-employed, or if less than half of your income comes from Centrelink, you may not be eligible for some personal loan options. Consider contacting the lender before applying.