Loan and Credit Products
Assignment
What are some of the advantages and disadvantages for each of the following credit products?
Download the assignment and think about the advantages and disadvantages of each type of loan and then upload this for your facilitator at the end of the module with your other assignments.
There are many different credit products currently available, these are always changing and new products emerging.
Personal debt is a big problem in New Zealand and has grown significantly over the last few years.
Source: Reserve Bank of New Zealand
New Zealanders owe $35 billion dollars in student loans (blue) and consumer debt (orange), excluding mortgages, which equates to approximately $6,400 per person
Source: Reserve Bank of New Zealand
If we add in housing debt (grey) this increases to about $47,000 per New Zealander.
The data for these graphs is prior to any borrowing people have had to make to get through COVID-19.
No matter how you look at it, or classify it, many of our clients have significant debt in relation to their income level, and if we can help them manage that debt, we may be able to help them reduce their outgoings and balance their budget.
To do this we need to ensure that we as financial mentors understand debt and its components.