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5 ways to spend your tax refund this year

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Five things you could consider spending your tax refund

It’s tax time again, and that means it's time to think about how you’re going to spend your tax return.

The influx of money into your bank account is always exciting, but it can often be difficult to decide how to best spend it.

Here are five things you could consider spending your tax refund on this year if you’re a homeowner, are looking to purchase a home, or are in the market for a new car.

1. Put it towards your home loan repayments

If COVID-19 has taught us anything, it's how your day-to-day routine could change in an instant. If you’re a homeowner, particularly during the midst of the pandemic, reducing debt could be a wise way to direct your funds. Paying off your home loan faster has the potential to deter from any future stress in the current unpredictable work climate, and more importantly, you could save thousands of dollars in interest and significantly reduce the term of your loan.

When you purchase your home, you’ll usually agree to a mortgage payment frequency that works best for you. But, that doesn’t mean you can’t get ahead of the repayments and deposit your tax return straight into your home loan, reducing the principal amount you owe.

Have a look at our repayments calculator to see how much you could save.

2. Buy a new green car

Kermit may not think it’s easy being green but our green car loan says otherwise. So if you’re in the market for a new car, it may be worth considering putting your tax return towards the purchase of a green car and take advantage of our low rates.

Not only will you save money when taking advantage of our green car loan rates, but you will also save a significant amount of money on fuel, tax and rego all while making a conscious environmental decision! Depending on the make and model of your green machine, you could save around $1,000 annually on fuel.

Plus here’s something you may not have thought about - hybrid cars can go farther between filling up, and with an electric car you can skip the petrol station all together, reducing the temptation of overpriced servo snacks and avoiding the unpredictable fuel price cycles in major capital cities.

In most Australian states and territories, you can also save on stamp duty, rego and other costs when you purchase a green car.

To find out if the car you want to buy is on our approved list of green cars eligible for the discount, you can call us on 13 10 90 and speak with one of our friendly car lending experts.

3. Put it towards your house deposit

If you’re thinking about buying a home or investment property, your tax refund could be the extra boost your deposit needs. Even a modest tax refund can make a big difference when saving for a house deposit - every penny helps.

While the surge of cash at tax time is often used for short-term splurges, you could consider putting it aside to save for a house deposit if buying a home is your ultimate goal. Even if you’re working part time, starting to save now can make a big difference in the long run.

While you’re at it, find out if you qualify for a home loan with loans.com.au

4. Upgrade your home

With frequent lockdowns, we are seeing more an more Australians choosing to work from home. Renovating can add some serious value to your property, but also transform your house into a nicer place to live and work in. If your home is in need of a little lovin', your tax refund could be used to cover some of the reno costs.

Maybe you want to extend and build a home office, upgrade your garage to include a home gym, or just knock it down and start again. With our range of construction home loans, you’ll be able to use your tax refund to turn your house into your dream home!

5. Pop it in your offset sub-account

Depositing your tax return straight into your offset sub-account could be a very wise move as it will save you interest on your mortgage.

Similar to increasing your home loan repayments, an offset sub-account is attached to your home loan and for the amount that is in your offset sub-account, you will only be charged interest on the amount in your home loan account, potentially saving you thousands over the term of the mortgage.

Plus, you can access that money in your offset sub-account via ATM, EFTPOS or online using your attached VISA debit card. Win-win!

To apply for our offset sub-account, book an appointment with one of our friendly lending specialists today.

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About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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