No B.S. Real Estate Podcast: How to Get Approved for a Personal or Business Loan With Donovan Roberts

Jo Agresta: Welcome back everyone to the No B.S. Real Estate podcast, your listening to the how to guide to the Aussie finance and real estate market. I'm your host, Jo Agresta. 

This is a bit of a different episode, everyone, but it's important because a lot of you are business owners out there. So if we're looking at trucks, yes. Boats, yes. Rock crushers, also, yes. And more importantly, he helps everyday Aussies use asset finance and debt consolidation to move towards home ownership without the BS. 

And that's exactly why he's here. So Donovan, welcome to the show. 

Donovan Roberts: Morning. Thank you for having me. 

Jo Agresta: Of course. I've been looking forward to this and a funny story for those who don't know yesterday, we had another guest pull out at the last minute and I called Donovan in a panic and I said, would you want to like come on early? I know this is like maybe less than 10 hours notice, but how do you feel? And you just jumped right in- were like a hundred percent. I wanted to do this straight away last time. 

Donovan Roberts: Yeah. I've been super excited. I've been looking forward to this. 

Jo Agresta: Now I'm so glad you came on because this conversation is different to like our typical flavour. We're going to take for our listeners, we're going to take this a step back. This is before you actually get on the homeownership journey pathway. Debt consolidation is a big thing to talk about asset finance as a vehicle to funding is also important. So we're going to take it back a step that if you're in the position of thinking about buying maybe in the next year to two years or even less. 

This is a really good episode for you to tune into because we're going to go through some of these things that Donovan on today's episode. So yeah, let's get into it. All right. So like all good places to start, let's go through your journey because you know, I want to understand and help our listeners understand how did you get into the finance world and how did Better Broker Co start? 

Donovan Roberts: Great question. When I finished school, I didn't necessarily know what I wanted to do. I was always good at math and I knew I was going to be in some sort of financial industry. I went and traveled for a little bit, still never found my passion and decided to do a degree in accounting. And then I realised accounting is really boring- No offence to any accountants out there. It just wasn't the industry for me. I wanted to be more, uh, people facing, in a more sales kind of thing. That was my strength. And luckily through family who also in the throws of working as a Business Manager.

I slowly got into the idea of becoming a finance broker. It was more of a job at the beginning to pay the bills. And as I did it more and more and more, I fell in love with it. And yeah, that's been the last nine and a half years. So I've been doing that for a while. Absolutely loving it. 

About 12 months ago, myself and two other partners- we'd all worked together for a number of years at our previous employer. And we decided, you know what, we can do this better. Basically, you know, we've taken the standardised finance brokerage, what they do and what their values are, and thought this isn't what our values are. And we wanted to bring our values into our own business. And that's essentially where we. We created Better Broker Co because we wanted to be better. 

Not thinking we're better in regards to better people or better service, even though that's what we did- but better values, Better customer outcomes - that kind of stuff. So that was the idea behind the business. 

Jo Agresta: Your branding actually really stood out to me. I really love that name, Better Broker Co, because automatically it kind of builds that trust of like, 'Oh, why are you better brokers?' And that's why I kind of like to ask the question. 

My next question is: what's the reason behind Better Broker Co? Why did you name it in such a way? 

Donovan Roberts: Yeah, purely just from working at multiple different brokerages and even dealerships. In those last few years the three of us got together and said, we can do this better. And that's kind of where the name came from. 

Jo Agresta: Love it. I like that your tagline is so on brand, by the way, with this podcast title, right? Your tagline is finance without the BS. I love that. Talk me through that. 

Donovan Roberts: I guess the hardest part of starting a business is coming up with your branding and all that kind of stuff. And I think that was where my first thought went is, you know, we're going to be different. We wanted to be very upfront and honest and work in the customer's best interest. You know, there's so many, I don't want to say dodgy brokers out there, but there's so many people out there that don't have the customer's best interest at heart or don't have the transparency that they should legally and ethically. 

So, again, one of those open conversations about what are we going to do? And I said, well, I just want to cut out all the BS basically, and just be straightforward. If the customer wants to proceed, they're going to proceed without us having to try and hide anything. 

Buying a car is generally the second biggest commitment somebody would make in their life financially besides buying a home. Trying to hide fees, charges, rates, that kind of stuff is just immoral. So we came up here with the tagline 'finance without the BS', we plastered it over everything. After a fair while, we decided that maybe we should drop that tagline off the website, but still with the same mentality of we're just going to cut it out and get straight to the details that people want to know. 

Jo Agresta: And I love that because that's so on brand for why we have this podcast and why our listeners tune in because we like to deliver the no BS. And I think when you're dealing in finances, because it's so sensitive, right? Like we spend our lives either saving or we want to access certain things. And as much as we say money isn't important, money can give you options and having a business that you can deal with and an individual like yourself that has that motto and that, you know, internal radar that says, 'oh, I'm not going to give you the bullshit behind it'. If you can't do this, we can do this, and work with people within their limits. 

Donovan Roberts: Yeah. I understand. We just spoke earlier, before we actually went live about patience, and I said I'm not a very patient person. But I think when it comes to people's objectives, it's actually finding out what they need, not necessarily what they want. And if it's a process of the best deal today not being the best deal overall, we can work through stuff over the next period of time and get you into a better position. That is my primary goal. It's not about turning a quick dollar. It's about, creating repeat business through happy customers. 

Basically, that's our slogan, we're not here for the one loan, we're here for the many (creating repeat business). You're not going to do that by being dodgy. 

Jo Agresta: And you know, what I like is that there's a personal story behind this because you and your wife had your own home buying struggles when you went through it. How did that shape how you now help your clients? 

Donovan Roberts: Yeah, it's, it's an interesting one. So I was sort of new into the finance game when my wife and I bought our first property. You think you know a lot about finance and you don't. When we had taken out two car loans and we had credit cards and stuff. And then when we went to the bank to say we want a home loan when we had all our savings and everything that we had built up. And it was the broker at the time that said, well, we can't give you the amount that you're after, but what you can do is pay out your current debts and use some of your house deposit to buy and then work through the scenarios with us of paying out our liabilities. That was able to give us a larger lend and maybe delayed our buying journey by a little bit because we had to resave some money. Having a lot of debt won't necessarily impact your ability to be approved for a mortgage, but what it can do is it impact the capacity that you want. 

Now, if you're only looking at a smaller borrower, then it may not matter. If you're wanting to go for your dream house, it may matter. So minimising liabilities for when you're going for a mortgage or consolidating unnecessary debt into one, reducing that amount of your payment is important. 

Jo Agresta: Yeah. And I like that you've got that personal experience because I was very similar to you with my journey. Like I had a car debt at the time and other liabilities- Afterpay was mine. My issue was to pay that out as it was considered a liability. 

Donovan Roberts: Interesting. I've got some stuff to tell you about Afterpay. I'll keep that for a little bit later. 

Jo Agresta: I cannot wait to get into that because I think that's something that people in our age group definitely, we jump on every bit of tech or new app thing and then we end up in stupid situations. So it's so important. We're going to definitely unpack it because we need to. 

And then this is like the perfect time to kind of lead into the myth busting part of our episode. Let's talk real finance. And I like to do this for a number of reasons. So we have some of our listeners that submit questions to us or submit scenarios. And then we go on Reddit and we go on the Facebook groups to have a look at like, what are the real buyers and real struggles that these people are going through? And because we've got a professional in the room, who better to ask and do myth busting with me than you. 

So we pulled these real comments from Reddit, Facebook, and some of our listeners and we want to get your take. So let's get into it. Now each of these questions gives you a chance to explain the truth and talk about how it's going to help solve the exact issue and what Better Broker Co does. This is one on Reddit said, can I use a personal loan for a house deposit? Can you explain how that actually works and when it makes sense? 

Donovan Roberts: Yeah, great question. 

The answer to that will have differing, or there'll be differing opinions depending on who's answering it. If you're asking the bank, can I use a personal loan to put it as a home deposit? I probably wouldn't ask the bank. However, if you're applying for a personal loan through a broker or through a bank, one of the questions as to why you're lending the money can be a home deposit. Banks will lend you money for the purpose of a home deposit. Now, when you're actually applying through a lender for the mortgage, they're probably not going to be too excited about the fact that you're lending money for the home deposit, which is where I guess you've got to be careful. 

So yes, you come to me and say, I need $40,000 for a home deposit. Great, we can set up that loan. We can tell the bank you're borrowing 40 grand for a home deposit. What you'll probably need to do is have that money sitting in your account for at least three months, you know, or put it into a savings account, potentially separate to a liability account so that when in three months time you actually apply for that home loan you've got that genuine savings. If they see that I applied for a $40,000 loan last week and now I'm applying for a home loan with a $40,000 deposit it doesn't show genuine savings. So you definitely can borrow money for a home deposit but you've just got to be patient with it is all I can say. 

Jo Agresta: Gotcha. You know, that is a, that's such an interesting option because when I talk to a lot of buyers, like they think, I'm going to spend two years saving this deposit, five years saving this deposit. I think this would make a big difference to know that that option even exists, especially when we talk about the current economical situation where everyone says, you're never going to be able to buy a home. And this goes back to what I spoke about before, which was if you can afford the property, if you're not going for your dream house, like a $1.2 million property, you going for something that's starter home that's well within your budget. And I think everyone should buy a house within their budget. 

Donovan Roberts: It's a trap. Especially when you borrow at 3% and now rates are at seven. Like, it's put people in some difficult situations. But if you've got the capacity there and you've got the ability to afford a home loan and a personal loan, there's nothing stopping you from borrowing that 10% deposit, the remaining 10% deposit and putting it down onto a property. If you can afford both loans comfortably, and that's obviously the key is can you afford them comfortably. You're not stretching yourself and save yourself the LMI or whatever other fees and stuff that become involved or being able to put down that first home deposit. Nothing stopping you from doing that. 

This kind of feeds into what Better Broker Co is, even brokers in general. They're to be able to give you your affordability or your feasibility of servicing that loan. So it's like, before you borrow, just get the realistic picture of, what are your financial instruments? And there's nothing to say that you can't ever, you know, refinance at a later date and incorporate that money back into your home loan and pay out that personal loan. I think being smart with how you borrow is important. 

So again, you can obviously borrow money for lots of things and how you use that money is up to you, but if you're smart about it, there's some really good ways to be able to leverage the bank's money and be able to invest it in a property and be able to grow and pay it back over time. And you don't have to pay the loan out of a five or seven years. You can pay it out a lot quicker. So just being smarter and even having a chat to a financial analyst and it's always handy. 

Jo Agresta: No, I love that answer. So that's a good one. And I like this. get this a lot. So this has come in from one of our listeners that debt consolidation ruins your credit score. That statement alone, what really happens? Like what should people know before doing it? 

Donovan Roberts: Great question. The first thing people do when they want debt consolidation is they need to apply for a personal loan, right? So first of all, they need to, you know, they need to see if they can afford it and what's their interest rate. And you go on Google, most of the time you Google, 'personal loans' and it comes up with a whole bunch of lenders that are going to offer personal loans rates from 6%, right? When it says rates from, that's not the rate you're going to get, unfortunately. 

But what happens is, customers will apply to Bank A and Bank A will come back, 'congratulations, you're approved', but you're at 14%. And you go, oh, that's too high. I'm going to try Bank B. Bank B comes back and they decline you for whatever reason. And you got a Bank C and they come back and now they're 16%. And then you go, well. And this isn't necessarily even applying. This is just going onto their website and saying I want a quote. 

When you go direct to a bank and you inquire for a quote, that bank's going to hit your credit file. And with every inquiry it also compounds. The first inquiry may take up 40 points of your credit file. The next one might take 50. And then another 60 and then it compounds and then it gets worse and worse and worse. So applying for a personal loan or for debt consolidation can affect your credit file if you're making multiple inquiries. That's the key with that. 

Debt consolidation is a great way to consolidate your debt, save your money on a monthly basis, and it can ultimately improve your credit file if you pay out some bad debts, credit cards and stuff. What we sort of encourage is to go through a broker because the broker will have access to 10 personal loan lenders and we can do quotes with every single lender without affecting your credit file. 

So I can go and get quotes from all tenants. I can give you every single lender, what their fees are, what their interest rates are, what their payments are without a single inquiry on your credit file. We also do like eligibility with each lender, like a pre-qualification. So we can say you've got to be approved with these guys. This is their rate fees and everything without affecting your file. The other thing to note with debt consolidation, which I think we also may get into is, debt consolidation can actually save you money. 

I've done a lot of debt consolidation. I think about 80% of all personal loans in Australia is for debt consolidation. Now, if you look at it, you have two car loans, a credit card and a personal loan, you want to consolidate it all together. What you're generally doing is consolidating it all into one big loan. Now that loan you generally extend over another period of time. So you may have three years left on your personal loan and four years left on your car loan, and a certain amount of term or money left on your credit card. You're going to take that whole thing and extend it over seven years. Your liabilities might be going from $1,600 a month to $1,000 a month saving you $600 a month, is really exciting. However, if you pay that loan out over the next seven years, you may end up paying $10,000 more in interest over the time alone. 

That side of it doesn't necessarily affect your credit file, which was the question. It's more around the multiple inquiries. 

Jo Agresta: So I actually didn't know that that was the way it was pinged. I think you've answered that really well. For our listeners, it was a good warning for you. If you're calling around banks and submitting multiple applications, just be very weary. 

Donovan Roberts: And part of the reason why you do talk to a broker is you're going to get that guidance and you're not going to pay an arm and a leg to get the guidance. 

Brokers charge fees, right? Nothing in this world is for free, unfortunately. Like we do charge a fee for our service because we have the ability to do this. Not only can we save your credit file and impact, we can potentially, now you might go to bank A and bank A might give you 9% and you think, wow, I'm really happy with that. However, you come through a broker, we might be able to go to a different lender and get you 6%. Right? So there is always potentially a better option out there. 

We do charge a fee for that service, but paying for service is important. Like you need to have that. I always have this methodology, right? It's like, so you tell me, you're going to do all these things for me, but it's free. Right. Sounds great. The problem I always have with that is whenever I've accepted something as a free service, they've got no obligation to uphold anything that I need them to do because I'm not paying for them for their time. It's a freebie for me. And all of a sudden, all these things that I wanted as a priority and I wanted the urgency on, I don't get an urgency on at all because I'm not in comparison to their paying customers. They need to go and help those people first. It's like they're paying for a service. So for those of you who think this is going to be some long dragged out service, especially debt, debt's a sensitive subject. You're like, 'why would I pay for this when I already have debt?' Like I'm already in the weeds. 

But if you're going to take out $40,000 to potentially consolidate debt and save interest- good debt. You're going to put it in a home- good debt. You're going to borrow money at 6% and put it into the S &P or some sort of stocks that's gaining 10% per year- good debt. So again, I'm not here to tell you what you should and shouldn't borrow for. There's a lot of flexibility when it comes to personal loans and people generally think taking out debt is bad, but it depends on what it's for. 

Jo Agresta: That's a very clear message. And this one here is interesting. So it says, this is someone from Reddit who said, I was told I'm too old to borrow at 43 years old. How do lenders look at age and what can older borrowers do? 

Donovan Roberts: Another great question. And I love this one because I get it a lot as well. People think they're too old. And probably five years ago, there was a limit. Now, 43 is probably not that old. 10 years ago, I used to think 43 was old. And the closer I'm getting to 43, it's like, no, that's young. That's super young, 

But I've had, you know, 60 year olds that have still got five years of work and want to borrow money. And previously the banks had said no, we don't lend to over 60s. People started to sort of question that because there's non-discrimination laws here in Australia, right? You can't discriminate. But now age discrimination is massive. You can't discriminate on someone's age. You can't not hire somebody for a job because they're too old, right? Banks have taken that on board now and they won't not lend to someone due to their age. 

You could be 80 years old, if you've got the money and you can repay the debt, banks cannot say no to you because you're 80 years old. So it's more about the servicing of that debt. You could be 25 years old and you're not working- the bank's not going to you money. If you're 40 years old and not working- the bank's not going to lend you money. 

On the flip side is if you've got a stable job or you've got stable income, for instance, I've just done one for a veteran affairs, so a return soldier. He's not working, but he's on the Department of Veterans Affairs, so he can get a loan. The first thing that we do when we apply for a loan is ask can you afford it? Everything else is subsequent to that. So if you can afford a loan and you can pay it for the life of the loan - like self-funded retirees, they've got enough money in their super or they're generating enough from investments, we can do it. It's like, yep, go for it. 

So there's no age limit. So I think the myth of I'm too old to borrow is silly. If you've got a stable income and you can afford the loan on paper, not just tell the bank I can afford it. Trust me, I can do it, don't stress. Don't even look at that way, just, I got you, handshake. 

I think the other interesting thing is if you're a commercial customer, you're a director of a company, right? You're the sole director of company, you've got your company, you've got maybe one employee, so a smaller company. You're reaching 65 and now you want to borrow $100,000 in the company. The bank's going to ask questions about a succession plan. Because hypothetically, if you stop working, the business stops operating, So larger companies that have other second directors or shareholders or multiple employees, that company is going to continue post the director retiring. But single operators that are reaching a certain age of retirement, you can't discriminate, but they need to have a succession plan. So then you say to the director, who's going to take after the company when you retire? Make sure that that company is still going to trade post retirement age. 

But I've had directors of companies working until they're 75/70, so you've just got to sort of jump those hurdles, but there's no discrimination on age. 

Jo Agresta: No, I love that. And, you know, I'm sorry to that, that listener who, or you're not listener, but this Reddit person who was told they were too old to borrow at 43. I think you're really young and I think that's super unfair. 

Donovan Roberts: Yeah, I used to think you're old, now it's like, you asked me 20 years ago. Your broker must've been 19 years old. 

Jo Agresta: Yeah, I think there's an issue there. This next one says brokers just want you to sign the biggest loan for more commission. How do you build trust with clients, especially ones that have been burned by the system in the past and maybe they have come across bad apples in the industry? You get good and bad. And when you've had one of the bad, it's very hard to come back from that jaded experience. So what's your take on what this person's saying about brokers just want to sign the biggest loan for more comms? 

Donovan Roberts: Unfortunately, that is a reality in the industry. There are some really dodgy brokers out there that don't care about you or your best interest. They're in it for the money. And I think finding the right broker is important. And I think the easiest way to do that is don't just go through necessarily the first option. If you're at a dealership and that dealership says use our business manager, even if they're the business manager in a dealership, they're in the same position where they can charge you excessive amounts as any broker in the market would. 

So don't necessarily just trust a business manager. However, business managers are generally, they look after their customers. However, there are brokers out there, as I said, that will take advantage of you and it's not fair. That's again, where we're trying to change. It's all well and good, me saying it without being able to prove it. But what we do is we spend a fair amount of time on the first conversation, not just saying what car do you want? We ask the customer, what car do you want? Then when we do the application as you generally do, we find out what the customer's objective is. So how long do you plan on keeping the car? is a main one. Brokers don't ask this. It is a major point as to what is your outcome with this vehicle? Is this a short term car you're going to keep for three years? Is something you're going to keep for seven years? Then you can sort of stage, okay, well, how do you want your loan structured? Because the longer the loan term, the more interest and stuff you pay. Do you want to put in a deposit? All that kind of stuff. And there's different ways that we sort of find out what the customer's objectives are. 

Once we know what that is, we can then provide quotes to the customer based on three different lenders. And the reason we do this is because there's brokers that will take an application and gather documents and then go off, come back to you and say, congratulations, you're approved. And the customer goes, fantastic. What's my rate? What's my repayment? They don't even know what they've just been approved for. And I've seen it so many times, the broker says, it's all in your loan contracts. I'll send it to you. It's run by the opinion that if the customer signs a loan contract, they're happy. That sucks. That really sucks. They hide it because at that stage, then their customer's excited. They've got to prove they've spoken to the dealer, they're going to pick up their car on Friday, and then all of a sudden they see their loan contract and it's 15% with a $2,000 fee in there, right? And then they don't want to go through the process again, right? They're unhappy, but they sign the contract and they move on. It's like they kind of just accept their fate. 

So what we do is we provide three different options, three different lenders. This included what our fee is, what the lender fee is, what the exit fee is, what other features that the lender has, and three options. The reason we do that is because it's not just a 'trust us this is the best for you', it's 'this is what's in the market'. 

Now, one might be clearly better than the other two, but we provided it to show this is what's in there. You've done your homework. We've done our homework. We've looked around and now you don't have to, because if I just came to you, even with the quote of the person said, hey, you're going to lender A and it's going to be 9%, right? Your first instinct is as a consumer, as a customer, is I want to get a second opinion, right? There's nothing wrong with that. And that's why we encourage going around and shopping. 

But shopping can be dangerous because you if go and apply through lenders directly and it's going to hit your credit file and it's going to affect your credit. Shopping through another broker, that's a risky game as well because again, you're just playing two people off each other and it can get quite complicated, right?

Going through a broker that's going to do the research for you and going to find you what the best lender is for your circumstances, not the best lender that they're going to make the most amount of money on. So that's it. That's the difference as well. Like one lender might be cheaper than the other, but one lender might be just a bit more hard work. They'll go with the cheaper option where they make more money. 

By providing three different quotes, the customer gets to pick which option is best for them. And you'd be surprised. It's not generally the cheapest interest rate. 

Jo Agresta: No, I believe that. Yeah. 

Donovan Roberts: People go with slightly higher rates for better terms, larger balloons, exit fees, lower monthly fees, that kind of stuff. So I think assuming what a customer wants is disadvantageous to them as well. And in my opinion, if a customer doesn't want to proceed when you've provided them quotes and you've showed them what their interest rate and fees are, they're not going to want to proceed when they get the loan contract. 

Jo Agresta: It's so true. And you know, one thing that I want to point out is that I've interviewed a lot of professionals on the podcast, like different walks of life. And even though you said, I can't really prove it but I can tell you I am honest and this is what we do. And this is our ethos. But what I've noticed just from interviewing all these professionals, there's a clear standout, right? There's this passion that you speak with. There's this honesty and an approach of comparison, openness and transparency. That's really consistent amongst all our guests. 

Because I've watched other- just so everyone knows, I don't take every professional that comes on into the fold because there's a research piece behind what we go through as, the interviewer and as the host of the show, I don't want to be interviewing the wrong people and sending someone your way that you end up going, 'Hey Jo that was crap. What were you thinking?' So there's a lot of research on our side and what stands out. Like I said, I've dealt with professionals in this space who do not personalise it. And every single professional talks about this customisation and this planning and goal setting from the initial consultation. Doesn't matter what it is, whether they're brokers, buyers agents, real estate agents- that's been a common theme on this show is that this is the first step in our journey. Who are you? What do you want to do? Why are you doing this? 

So even though you said you can't prove it, I feel like that's my little bit of proof. You know we interview the right people on the show and this is exactly the common theme that we say. So of course I had to give credit where it's due. 

Now we're going to bust this one open because we referred to it earlier. Someone on Reddit said Afterpay ruined my credit. I didn't know it could. This is so interesting. What are the silent issues that are stopping people, I guess, from getting approved like an Afterpay, or as you pay, kind of a setup?

Donovan Roberts: I go back to the times before buy now pay later, before Afterpay, Zip pay and everything, Lay buy. And you had lay buy, like I've used lay buy and it's great. You don't get the item until it's paid for. There's no instant gratification. Like if you can't pay for an item upfront, you don't get it. I mean, I bought my kids' car seats on lay buy. You know what? My wife was pregnant. We knew we had nine months to get a car seat. We figured, well, we'll go and start lay buying it six months prior and paid it off over time, but we don't need it for six months.

Then you had the standard credit cards, which credit cards are credit facilities and they have credit licenses. Along came Afterpay and buy now pay later, which never had any government regulation. They didn't have to hold a credit license. And the risk with that is you apply, and I've never got one, but my wife has it and uses it all the time. We love it. I imagine shopping is the key indicator. And you can apply for an Afterpay account. And as far as I'm aware, there are practically no checks on the customer's financial situation. No, none. Like literally it's do you want After pay? Yes, sign up. And then what is the limit? I think they do one check of maybe your age, like with your license, and then it's bang. Here's your thousand, two thousand, five thousand limit. 

So when it started to come, we didn't really have to declare it in finance applications as a liability because it was so brand new. Excuse me, then lenders started sort of saying, Oh, well, you need to declare it. And then we started having to ask questions, do you have buying our pay later? And then the amount of people that were like, Yes, I have, I'm paying $600 a month on, you know, after paying buying our pay later, it's ridiculous. And then finding people getting into financial hardship by using the instant gratitude of like, can't afford this, but I'll pay it off later. And no, can't afford this, but I'll pay it off later. And I want to go to Bali, but I can't afford the flights. I'll pay it off later. And, you know, yes, it's the one off transactions. Okay. But when you start having $2,000 on Afterpay, you've got to pay it off in four weeks, you know, for Forty Nights, whatever it is, it starts to add up. And then what happens as you start paying it off, you start dipping down into it again. 

The scary thing is, as I said, there wasn't any checks or regulations around the customer's financial situation. As of June 10th this year, so 16 days ago, all buy now pay laters are required to have an Australian credit license. So now they become a financial institution. They need a credit license and they have to start doing the checks, income, expenses, liabilities. If you can't afford an additional liability, you cannot get a buy now pay later account. 

See, this is what I like about because I saw that announcement come through and I love this for so many reasons because initially I'm like, this is a vehicle for people who can't afford shit to put it on Afterpay, get themselves into a mass amount of debt, get into trouble with their credit, and then get themselves into a hole. And this business is continuously supporting that journey and that pathway. It sucks. It's like, it's a good and bad thing, right? Like someone who can't afford to get a loan or get themselves out of that situation, Afterpay is a great solution. But then when, if you're someone who just constantly takes on debts and debts and debts, it's going to hinder you in the long run. 

And I'm not saying the buy now pay later is fantastic. I wish I invented it, right? It's amazing. Interest free loans, pay a small monthly fee, And then you get the larger ones, the hum and stuff where you can go and buy furniture. You go to the Harvey Norman, you could buy furniture interest free, whatever it is. But my issue with buy now pay later was there was no regulatory checks. So keep using buy now. I'm not telling you to use it, but what I'm glad now is that younger people growing up turning 18 and 19 are not just relying on, know, they might not even have a job, you know, getting buy now pay later. So it is a great business and it's a great use of, you know, being able to pay stuff off interest free. Again, always, I'm always a big advocate for using the bank's money rather than your own money. 

However, now that they've introduced checks and capacity and assessments and stuff, the people that can afford it are going to be approved and the people that can't are not. And that's what we need. We need a regulation in the buy now pay later industry. 

Jo Agresta: No, I love it. That was a really, that's a really good one to talk about. And now a couple of others: this one here, so funny 'debt consolidation is a scam'. This came from a Facebook group. What should someone look for in a legit service? And how do you, I think we've already touched on this, but how do you do it differently? 

Donovan Roberts: I think it's more around that topic of getting a broker to shop around, not just doing it yourself and then getting a bad credit while you're shopping. So debt consolidation is basically a, it's a fancy way of saying, I'm going to get a personal loan for paying off all my other debt, consolidating all your other debt into. 

So the main thing is you've got to get a personal loan. You've got to be approved. So you've got to get the best deal, the best rate, the best fees and stuff. So that's the first thing is talk to a broker, find out what's the best personal loan option, and you apply for a personal loan. The next thing you got to look at is, all right, and we've actually got a really cool calculator on our website if you want to have a look. You can go in and add in all your debts, your credit cards, your car loans, your personal loans, your buy now pay later, even your cash, your payday loans, your cash converters - that's a whole other topic: irresponsible lending. 

Jo Agresta: We'll bring you back to the show for that episode. 

Donovan Roberts: So you can put in all your debts, how long you've got left on them, how much your payments are and all that kind of stuff. And then we calculate, so let's just say, as I said before, you need $60,000 to consolidate all your debt, but you're going to take your monthly payment from $1,600 per month to $1,000 per month. And I'm saying this as a real example of somebody I've just done. 

$1600 a month in repayments, that's only including a minimum monthly repayment on his credit card, which would have taken him 72 years to pay off. So probably slightly higher than $1600 a month if he actually pay off his credit card in less than 72 years. And we could consolidate all that into one month repayment of $1,000, so saving him $600 a month. And then he has only one liability he has to worry about. 

Not these multiple issues with multiple payment default problems and things like that. Peace of mind, one monthly payment coming out, giving them more cashflow every month. However, you have to make it very clear to the customer that if you take this loan, because we set up over a seven year loan term to reduce that monthly repayment, you only make minimum repayments over 84 months or seven years. You could do the math: a thousand dollars a month, 84 months, that's $84,000 the customer's paying back. So that's $24,000 in interest compared to probably the seven or $8,000 in interest he would have paid if he had his other loans paid out in time. It can cost you more money. However, it's a short-term gain and it's convenient to now only have one big repayment and pay it off monthly. You know, as we go, I'm saving 600 bucks a month. I've closed off all the other debt, which may be bad debt like maxed out credit cards 20%. 

So now we're setting up something, you know, smaller. I think you've just got to be aware. Now there are cases where you actually will save money by consolidating debt, especially if you're consolidating high interest debt, like your, you know, payday loans and higher other personal loans, you're potentially, you've bought a house in the last few years, so you get a lower rate. So you can save money. But I think if you're going to do a debt consolidation, do the numbers yourself. I understand that it's probably going to cost you more over the life of a loan. And you don't necessarily take everyone's word for it, like, 'hey, just consolidate the debt, you'll be better off'. 

There's no extra fees on personal loans, which is really good. But the other thing for home lending, it's really good if you've got some credit cards and some car loans and stuff, and you can't pay out the debt because you don't have savings, you can consolidate it to increase your capacity. So if you're struggling with capacity, even $300 extra a month can get you a fair way forward in a mortgage. 

Jo Agresta: I love that. And thank you so much for busting some myths with me because I love this segment. I think it just gets us to open up like real conversations and real buyer concerns or, people concerns. So what I love about this is that you're not just approving loans, but you're giving people options and really like walking them through the logic behind it, and the decision making and that's what makes your approach different and comes out very clear. 

We're coming to the end of our time, but I can't go without knowing what's in store for the future with you guys, because you've mentioned building a community, which is super important. What's next for Better Broker Co? 

Donovan Roberts: Yeah, so one of our key pillars for our business is education. So that's educating customers as we go. So again, it's not just setting up a loan. We walk them through the process, tell them why this is the lender to go with. This is why your situation is how it is and how it works. So educating borrowers so they become better borrowers, not just telling them. 

And that goes into the industry that I want to sort of attack. You know, the asset finance industry has a really bad name. Previously, real estate agents- it's been a tough industry, but I think that is sort of turning around to be more regulated and getting a better name, whereas asset finance brokers... if people cringe when they hear, 'I'm an asset finance broker'. 

I think I'll be happy if we can sort of put a better spin on the industry and we can do that by educating other brokers, new brokers, and, even experienced brokers as to what customers want and how to better serve them. And I want to do that through, I've actually started doing that through a community for asset finance brokers that's going to involve education pieces, building a community of workshopping- and mortgage brokers have this already. They've got really great communities and they're very supportive of each other. Where I feel like asset finance brokers, the ones that don't do mortgages, tend to compete heavily. Yeah, but there's a big culture of that, and I want to change that. And I think by changing that and us coming together and talking and sharing ideas and sharing what works and what doesn't, we're gonna push each other to be better, to learn and put our customers first. 

Jo Agresta: Like it's the same with like any industry professional that has community behind them, know, buyers advocates tend to stick together, right? We have a very big community. 

We'll often say, 'I can help you with this', but you know, who would be better to actually help you getting a McMansion? Not me. I do the mom and dad homes. So I'm going to refer you to someone like Lisa Brickliffe. You know, she's high end market, does a great job. Her and her husband like Damien, kill it. So we refer to each other. Whereas if I looked back years ago, I don't think we would have ever done that. 

It just goes to show, I think that's a beautiful thing. Like if you can build a community around that and start something for asset finance brokers like yourself, then you're going to find a lot more consistency through the business too with experience because when you surround yourself with the right people or the right methodology, it all rubs off. 

Donovan Roberts: 100%. And I think holding each other accountable is very important. It's going to be a long process, but it's one I want to start. So that's what's in the future for me. Better Broker Co is my passion and we're going to continue to build that. But through that and through my connection to that is building this open community for other brokers and being able to obviously make it a better reputable industry.  

Jo Agresta: love this and Donovan, thank you so much for coming on the show. This has been so insightful. I think we're going to have to welcome you back. We're going to do a whole other episode. I've already got plans. I've been thinking about it as we've been chatting. You just put it so well and articulated so easy. Like it's so easy for our listeners to understand and follow along. Like you think if for you guys, know, drop your feedback against the show on Spotify, but like, in my opinion, this was so easy to understand and interpret and I hope our listeners felt the same. 

People don't know enough about it. Just like what we've heard from our Reddit and Facebook and you know, listeners that tune in those comments say a lot and you did well to bust those myths. So thank you again. It's been lovely. You're great.