Tag: australian debt

Categories
Debt Consolidation

Are You Falling for these Debt Consolidation Traps?

debt consolidation loan

Do you feel burdened by several credit card debts and other outstanding loans and you think debt consolidation could provide some serious relief? Debt consolidation is a new loan that allows you to pay off your multiple balances in one monthly payment. It doesn’t erase all your debts but simply makes it easier for you to repay. So, if you want to have a clean slate for keeps, make sure that you don’t fall into these debt consolidation traps:

Ignoring the cause of your debt problems.

Debt consolidation helps people manage the repercussions of bad debts. But it is just a temporary solution to your problem. Addressing the root cause of your debts, such as your lifestyle, money-management issues and other related things can help you analyze why you sunk in debt and how you can get out of it.

It is important to ask yourself, “What got me into a pile of debt?” Remember that it takes a while before debts become unmanageable. It is almost impossible to come up with a quick solution to internal debt issues when you fail to see where and how it started.

Debts did not grow overnight so unless you come up with a concrete idea with what got you into a financial mess, the same situation is likely to repeat itself.

Australian Lending Centre has in-house professionals to help you in retracing your financial actions. We can help you with our debt management plan and debt consolidation loans to deal with your present debts as we help you identify your spending habits.

Perhaps you were taking high-interest loans without knowing it or you are not paying your loans right. In other cases, the problem could be as simple as forgetting the due dates or the existence of debts itself.

Not making a proactive effort in searching for the best consolidation loan.

Here are some factors that you need to consider when choosing a loan consolidation program:

    • all of your outstanding debts
    • interest rates
    • lenders’ willingness to negotiate a lower rate
    • consolidation options

Consolidating debts has its own implications. Some lenders offer rates and fees that creep up over time. Others will charge you hefty fees that may put your assets in line in exchange of deceiving interest rates.

Australian Lending Centre gives you different options to pay for your debts. If you want to pay a lump sum to settle all your debts for less than what you actually owe, we can help you do that. You can also talk to us about our debt management program and see whether or not it can work for you. A debt management plan usually involves making an agreement with your creditors to consolidate the full amount of your loans. The negotiation is successful if you get lower interest rates or longer repayment period.

Thinking that you are finally out of debt.

Debt consolidation is still a loan. While you no longer have to deal with angry collection calls and you are not pestered with high-interest credit card bills, you cannot go back to your old habits. One of the big debt consolidation traps is forgetting he your debt problems were caused in the first place. Avoid falling back to maxing out your credit cards once again. Don’t give in to the temptation of charging all of your credit cards with zero balances once again, especially if there is no urgent need to do so.

Bear in mind that you still have a substantial amount of outstanding debt. So, if you cannot close most of your credit cards leave them at home and put only your low-charging credit cards in your wallet for emergencies.

Call us today!

Categories
News Debt Management

Many Australians Are Turning to Debt Agreements

part 9 debt agreements

Debt agreements are an alternative to declaring bankruptcy. Rather than be haunted by the irreversible effects that bankruptcy can have on your credit record, entering into a debt agreement can give you a debt-free fresh start. They’re becoming the popular choice for Australians in need of debt solutions. Debt agreements are overseen by the Australian Financial Security Authority (AFSA). As a government body, it’s AFSA’s job to regulate debt agreement administrators, in order to ensure they are resolving debt at the highest standard possible. The AFSA has been finding an increasing number of Australians are turning to debt agreements to solve their debt problems.

Why So Many Australians Are Turning to Debt Agreements

Although a debt agreement is technically an act of bankruptcy as it is under the Bankruptcy Act of 1966, it is considered another option to going bankrupt. There are also many differences between the two, making one look like a much better option to thousands of Australians. A formal debt agreement will appear on your credit file for five years and can prevent you from obtaining further finance during that time.

The AFSA has reported that there were 28, 288 personal insolvency cases reported across Australia during the 2014-15 financial year. Additionally, their June report found that there was an increase of 4.3% for people who entered into Debt Agreements compared with the March quarter. That figure rose from 2,568 to 2,678. Of the Australians who entered Debt Agreements, only 7.7% of them were for business-related reasons, which suggest that the rest were personal debts like credit card debt from overspending.

The amount of Australians entering into debt agreements for personal reasons shows that as a nation, we frequently get over our heads in arrears. Whether getting into uncontrollable debt is due to living beyond our means or just poor budgeting remains to be seen. Debt agreements are for unsecured debts; unpaid credit card, telephone and utility bills. The Australian Securities & Investments Commission (ASIC) puts the nation’s credit card debt at nearly $32 billion, which works out to approximately $4,300 per cardholder. That’s quite a lot of unsecured debt. It’s no wonder people are having difficulty making repayments.

Debt agreements are for people without a former bankruptcy on their credit record, who want to pay back their creditors. Going through a practitioner who specialises in agreements, your debt is negotiated with creditors and merged into a big sum that you pay back over time. If you have a debt agreement, the interest is frozen and anyone you owe is no longer able to contact you to request payment. It takes away the multiple burdens of debt collectors sending letters and making phone calls.

If you’re in need of a solution to your financial burdens, fill out our enquiry form and find out how we can help you.

Categories
Debt Consolidation

Why Should You Choose Debt Consolidation?

debt consolidation loan

If you are like one of many Australians with numerous debts, you’ve probably realised that there are lots of options out there. One of these options is Debt Consolidation. This finance type comes with a number of benefits when you’re facing mounting debts from multiple creditors. But why choose debt consolidation? Here are the top reasons for consolidating your debt:

You will only have one repayment

When you’re juggling many different repayments – sometimes on a weekly, fortnightly and monthly basis – it’s easy to lose track of how much is left owing, how much the interest is on each and every balance. Debt consolidation is the process of taking out a loan to cover your debt, and then you repay that one loan. Your single repayment will be bigger, sure, but only having one payment to make is part of the appeal and definitely one benefit of debt consolidation. It also makes it easier for you to budget the rest of your expenses, knowing the exact amount that is needed for your debt which will be the same each month.

Debt consolidation loans have lower long-term interest

A big reason why you should choose debt consolidation as your way out of debt is for the money saving that you can experience! Credit cards and car loans are the kind of debt that accrue interest at a ridiculously high rate. With a debt consolidation loan, it is considerably lower, meaning you’ll save more money on your repayment each month as well as over the course of the entire loan.

Improve your poor credit rating

If you’ve been consistently late in making repayments on your debt accounts, your credit score has likely suffered. Unfortunately, a low credit rating makes you ineligible for financing a big purchase – such as a home loan. However! If you have all your debts in the one loan and you’re always on time in paying, your credit will start to rebuild. Having a decent credit rating also means that your bank or provider will lower your interest, potentially saving you quite a bit over the term of your mortgage. Improving your credit and making sure you’ll be approved for a home loan are two more benefits of debt consolidation.

You will stress less

Do you receive multiple calls and letters per week from debt collectors? With one single loan, that will lift a significant weight off your shoulders. There will be no reason for creditors to be hassling you all the time, as your repayments to them will be taken care of. That means you can relax; the sinking feeling you get when your phone rings will be gone.

Now that you’ve read about the ways debt consolidation can help you, you should be in a better position to judge whether it’s the best way forward for you in terms of getting past your debt and repairing your credit rating, as well as easing the emotional burden that accompanies a mountain of debt.

Categories
Tax Debt Loans & Relief

Tax Time – How to get organised to make most of tax deductions

how to maximize tax deductions

It’s that time of the year again, filing for taxes and making the most of tax deductions. It also marks the end of the financial year.  It’s the time of sending paperwork to their respective accountants, the time when their tax returns must be compiled. Finding needed receipts can be a hassle if not a waste of time, and the situation is not something new to many Australians. In fact it is a routine every year. The general consensus is that paying taxes is a stressful time for most people, but it doesn’t have to be like finding a needle in a haystack every time. With some planning and preparation throughout the year, you can significantly reduce the amount of taxes that you owe.

The months of May and June provide a perfect opportunity to start getting organised and plan to make the most of those tax deductions. The following tips should help to guide you on creating a stress free plan, to get organised and maximise your tax deductions.

Planning for Maximum Tax Deductions

Claim any potential deduction that you are aware of: Know your potential deductions. A deduction is something that reduces the amount of your income that is taxed. These can include charitable donations, job-related expenses, interest paid on student loans and mortgages, energy-efficient home improvements and more. Make sure you keep track of all your assets and claim any potential tax deductions. You can also claim, if you’re into business, a tax deduction on pre-pay or stock up on supplies that you buy regularly like office equipment. Even bad debts are tax deductible. To know more about tax deductions you are eligible for, it is best that you review your tax form.

Know Potential credits you are eligible for: Being eligible for credits on taxes entitles you for a reduction on the actual amount of money you have to pay for your taxes. Examples are child tax credit, earned income tax and student tax credit. Furthermore any business with a turnover less than $2 million is potentially entitled to a range of tax benefits, like capital gains tax, income tax, GST and fringe benefits tax. Knowing potential credits may help you get the most from your tax deductions

Evaluate your Financial Position: Having a stable financial position is important in maintaining financial life and business. A stable financial position lessens your burden on taxes. More importantly, it will give you peace of mind knowing your finances are stable.

Categories
Debt Management

Australian Households Struggle Under Mounting Financial Pressures

personal loan

Australian households are feeling the financial strains of the global economic crisis as the Christmas season draws to a near. With oil prices still high, the Australian dollar buying fewer than 70 US Cents, and economies around the world slowing, the trickle down effects are showing.

Living costs are at a record high, grocery prices both on the rise. Christmas often stretches the family finances further, making it even more difficult to make ends meet.

Continue reading “Australian Households Struggle Under Mounting Financial Pressures”
Categories
Debt Management

Government Survey Gives Insight into Australian Debt

Australian Debt

It seems Australians are not entirely money-conscious when it comes to entering into debt, as a recent Federal Government report has found. In this article, we take an insight into Australian Debt.

The latest survey conducted by the Financial Literacy Foundation has divulged details about the general attitudes towards credit and debts amongst the Australian population.

The nationwide survey found, 21% of respondents will get into debt by buying things they cannot afford, and 17% pay only the minimum amount owing on their loans.

Continue reading “Government Survey Gives Insight into Australian Debt”
Categories
Debt Management

Reserve Bank Issued Personal Debt Warning

debt consolidation

It is an obvious statement that all is not as well as it could be at the moment for many economies around the globe. This week has seen shock waves in the US market with the collapse of financial powerhouse, Leyman Brothers.

In a speech to business leaders in Sydney this week, Glenn Stevens, Governor of the Reserve Bank, said Australia has been affected by the global credit crunch, but much less than other countries.

Mr Stevens said the massive rise in household debt over the past 15 years may be coming to an end and could be replaced by a rise in government borrowing to fund infrastructure projects.

“There is also a chance, it seems to me, that households might seek to contain and consolidate debt for some time,” he said.

Continue reading “Reserve Bank Issued Personal Debt Warning”
Categories
Credit Card Consolidation

Credit Card Debt on the Rise

debt consolidation

Banks are hiking credit card interest rates, forcing many consumers into debt. This has put credit card debt on the rise.

Recent research from a National newspaper suggests that at least 5 major credit card providers have increased their interest rates within the past three months. This comes as a rude awakening for many as the Reserve Bank’s recent cash rate cuts of 2% should have seen the interest rates for credit cards drop.

Continue reading “Credit Card Debt on the Rise”
Categories
Financial Planning

Australian Borrowers Cautioned to Curb Spending

personal loans||rapid loans

Borrowers have been urged to stem their spending over the approaching festive season, as the world financial markets remain unstable. As the end of the year starts to approach, the Christmas holiday period is a common time to splurge on those gifts and leisure activities, without as much concern about the bank balance. This is one of the most common times to accumulate debts.

However the head of Consumer Advocacy at a mortgage corporation Lisa Montgomery, warns it is “an area of spending which traditionally tends to blow out over the last few months of the year and invariably leads to a New Year hangover.”

Continue reading “Australian Borrowers Cautioned to Curb Spending”
Categories
News Personal Loans

New Survey Shows Australians Falling into Debt

debt consolidation

With inflation on the rise and living costs soaring, more young people are descending into debt. In a recent nationwide survey done by financial services company Dun & Bradstreet, the increasing range of debt receipts alarmingly fell around the 18-34 age

The survey found that more than one in five Australians expect to use their credit card to finance purchases they otherwise couldn’t afford. Livings costs are sky rocketing and as a result, young people are struggling to meet the financial demands. House hold debts have increased by 30% since Oct 2007, a mere six months ago. Credit card debt affects not only the middle age demographics but also the younger market, combining to make the nation’s current credit card bill, which stands at a staggering $42.340

Continue reading “New Survey Shows Australians Falling into Debt”