Interest - Free deals - Moneysmart - Asic

Hi, I’m Andrew from the MoneySmart team at ASIC. So, you’ve got an interest free deal but are you on track to pay it off within the interest-free period? Let’s say you bought a $2,000 couch 6 months ago on a 24 month interest free deal. The minimum repayment the provider needs is around $60 per month. But there’s the catch. That minimum won't pay off your interest free deal within the 24 month period. So, to avoid paying high interest on your deal you need to repay more than the provider says is the minimum repayment. You need to pay around $90 per month. Only paying the $60 per month means that you'll owe hundreds of dollars at the end of the period and you'll be hit with a high interest rate, often around 29% and that’s much higher than your average credit card. Avoid turning your interest free deal into a high interest loan. Use the MoneySmart calculator to work out how much you need to repay and take advantage of the interest-free period. Basically, make it work in your favour, not the provider's. And if you’ve got multiple interest free deals pay off the one with the highest interest rate first. And for more information go to moneysmart.gov.au