“Having a car loan works against you when you apply for a home loan”

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Are you considering a car loan? You might want to think again. Africa Melane speaks with financial planner Gerald Mwandiambira.


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South Africa has decent roads but lacks good public transport infrastructure.

Many South Africans therefore choose to buy their own vehicles, usually financed by debt.

The pandemic has resulted in a sharp increase in mortgage loans while car financing is in the doldrums.

Africa Melane asked financial planner Gerald Mwandiambira for advice on valuing a car loan versus a home loan.

If you’re considering buying a home, you might want to consider going without a financed car, advises Mwandiambira.

Image credit: prostooleh (123rf)

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The main reason most people are turned down when they apply for a home loan is because they bought a car… If you took out a car loan… it has a significant impact on affordability…

Gerald Mwandiambira, Certified Financial Planner – Sugar Creek Wealth

A house is a good that appreciates… it is a loan much safer from the point of view of the bank. A car depreciates… Mortgages are easier to apply for if you don’t have a car loan.

Gerald Mwandiambira, Certified Financial Planner – Sugar Creek Wealth

Having an auto loan will be at a disadvantage when you apply for a home loan … If you are wondering whether to buy a house or a car; definitely get a home loan first …

Gerald Mwandiambira, Certified Financial Planner – Sugar Creek Wealth

Listen to the interview in the audio below.


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