Finance Q&A - Nov

Our financial guru Cat is once again with us this month. Cat has the ability to help with all those things to do with money, savings, home loans and all the kinds of things most of us wish we were more interested in or knew more about but just don't have the time to look into or quite frankly hate the thought of.

So if you have a question for Cat, go to


Finance Matters Forum

Hi Jess,

The difference between a secured and unsecured loan, is that for a secured loan, the lending institution will hold an asset as collateral for the amount borrowed. For example, a bank placing a mortgage over your home. Generally speaking, the larger the loan, the more likely the lending institution will require security. This is the lenders way of ensuring they aren't left with a large amount owing to them should you default on the loan. If, for example you stopped making home loan repayments, the bank has the right to sell your home in order to be repaid the amount that you borrowed from them.

Usually smaller loans, such as personal loans, have no requirement for security. For example, if you were to borrow $20 000 for a car, the bank would not normally hold the car as security over the loan, and wear the risk of potential default. This is why personal loan rates are much higher than home loan rates, as the lender has a higher risk of losing out if you were to default on the loan.

If you are looking at borrowing, your best port of call is to talk to a lending or mortgage broker who will assess your options and look at the best kind of loan for you.

Hi Bronwyn,

I can understand your apprehension over the security of the internet for investing and banking. When these options over the internet first became available, there were a number of security problems, as it was a new system, and not a lot of places had access to the necessary security, thus being easily "hacked". Now however, it is very much an extensively used way of doing transactions, whether it be banking, paying a bill, doing your shopping or investing. There are numerous and complicated ways the various institutions secure your transactions, with highly complex encryptions etc making ensuring the safety of your transactions.

There are a number of brokers who offer internet services, making buying and selling shares easy. Also, by using the internet, as opposed to going direct through a broker, the brokerage is usually lower, making it cheaper for you.

However, I must point out that the most important thing for any investor, is to make sure they are fully informed about the shares or investments they are looking at going into, and what options are most suited to their needs. There's no point in going into an investment you heard someone talking about, only to find it is completely unsuitable to your needs.

This is why it is vital to get advice on investments, shares included, BEFORE making any decisions and "taking the plunge". Investment advisers are fully trained to look at your total situation, what your objectives are - what is your reason for investing, what are you trying to achieve - and make recommendations on the shares or investments that are best suited to your goals.

If you are wary of using the internet to do the actual buying or selling of your shares, or are nervous about how it works, as a way of introducing yourself to the process, you can (after getting appropriate advice) use a broker to purchase the shares, and then use the internet to keep track of your stock, get print outs of where your portfolio is at, etc.

I hope this has been of help, Bronwyn.


Remember: If you have a question you'd like to ask of our financial consultant and guru Cat, go to


Finance Matters Forum


Cat is a representative of Winchcombe Carson Financial Planning.