Do banks look at your HECS debt?
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Do banks look at your HECS debt?
What do banks think of HECS debt? Like personal loans, car finance, credit cards or dependent children, a HELP loan is treated the same way as any other liability. The bank runs what is known as a “serviceability” test to calculate your level of income in relation to your current debts and liabilities.
What happens to unpaid HECS debt?
The HECS-HELP scheme is designed to help eligible students to pay for their education with loans and discounts. HECS debt accumulated during this time is different to other types of debt, and repayments are based on your income rather than the amount you have left to pay. Ultimately, the debt is cleared upon death.
How does your HECS debt get paid?
You pay back your HELP debt through the tax system once you earn above the compulsory repayment threshold. The compulsory repayment threshold is different each year. The compulsory repayment threshold for the 2020-21 income year is $46,620.
How much HECS is taken out of my pay?
You will start paying 2% Hecs, which means $21 a week will immediately be deducted from your pay. But adding your wages up for the whole year, you only made $41,250 – which is below the repayment threshold. The $21 a week you were paying in Hecs will be credited back to you.
Does a HECS debt affect a home loan?
Depending on the lender, a HECS debt could be treated the same as a regular debt. In saying that, it shouldn’t stop you from getting a home loan, it’s just something your lender will consider when figuring out your borrowing power. Before applying for a home loan, take a look at how much you still owe.
Why is my HECS debt so high?
Every year Maddie’s HELP debt will increase because of indexation. If Maddie takes out a loan for example, buy a car or a property, she will need to include her HELP debt. If Maddie moves overseas to work, she will still have to make repayments to her HELP debt.
