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Debt Management

How can I manage debt?

If you find yourself in a position of overwhelming debt that you need to get on top of, the best thing you can do is get started. No matter what our circumstances, there are many reasons you may find yourself in a position of debt. This leaves you wondering, how can I manage debt?

It doesn’t make you a bad borrower or indicate that you don’t know how to manage your finances. Sometimes, unexpected expenses can crop up that haven’t been budgeted for, leaving you struggling to pay it off. This is where debt management comes into play. We take a look at what is debt management and how to get started.

How can I manage debt?

Are you wondering exactly what is debt management? It is simply a strategy you can put in place to help manage your debts and to put you back in control of your finances. It’s no secret that debt can creep up on us, with unexpected expenses tipping us over the edge. These can’t be planned for and can push us into spiralling debt.

Thankfully, there are plenty of options available when it comes to debt management, so you can find a strategy that suits your individual circumstances to help you get back on top of it. It’s an agreement you enter into with your creditors to manage the repayment of your debts. You can negotiate the terms with your creditors to come with a plan that you can successfully manage to pay back your debts.

There is no simple answer to “how can I manage debt”, however debt management is your best place to begin. Debt management can help you get on top of your finances by getting the help you need to see yourself out of debt on terms you can meet. It is about taking back control of your debts and making your life much easier in the process.

With a debt management plan you can:

  • Reduce interest rates
  • Waive late fees
  • Lower monthly payments
debt management

What Is a Debt Management Plan?

If you are worried about your own accumulating debt, then a debt management plan could be just what you need. What is debt management? It’s about coming to an agreement with your creditors to reach an affordable solution to your financial needs.

Of course, this isn’t always easy to do. Often, a third party is brought in to negotiate with your creditors on your behalf to help. Their goal is to bridge the gap between you and your lender to find a solution that works for both parties.

How can I manage debt? With a debt management plan in place, you will have a new repayment schedule with your creditors that will be more manageable with your financial situation.

A debt management plan is often the last step before going into a Debt Agreement or declaring bankruptcy. A Debt Agreement is a legally binding agreement between you and your creditors, which if not fulfilled, can lead to bankruptcy. If you can settle your debts with a debt management plan, it is the best solution to help you in the long run.

How To Set Up A Debt Management Plan?

Now you know how can I manage debt, it’s time to learn how to set up a debt management plan.

  1. The first step is to take a look at your own financial situation. What is your income and what are your expenses? Set out a thorough budget that outlines all these details.
  2. Next, put together a list of all the lenders you owe money to, how much you owe and the interest rate.
  3. Now is your chance to work out what you can afford to pay to each lender each month. You may want to start with the debts with the highest interest and just pay them or pay an equal amount to all your debts.
  4. Once you make a decision, contact your creditors to explain your situation and the help you are looking for. Propose a plan to help you repay your debts.
  5. If your creditor agrees, then you can start making repayments according to those plans. If your creditor doesn’t agree, it might be time to bring in a third party that can negotiate for you to get the best deal possible.
manage debt

Getting The Help You Need

Finding yourself in a position of debt that you are unable to repay isn’t an ideal circumstance for anybody. Thankfully, there are options out there to help. If you are wanting to set up a debt management plan, then speak to the experts at The Australian Lending Centre today.

We can look at your individual circumstances and help put a repayment plan in place that you can afford. We will then act on your behalf to negotiate with your creditors to get the best deal possible. It’s the first step to getting yourself out of debt and in a better financial space. If you need help, pick up the phone and give us a call today.

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Debt Management

What Is Debt Management?

Finding yourself in a position of debt can be extremely stressful. When the bills are piling up and you are unable to make the repayments on existing loans, you enter a downward spiral further and further into debt. This is not only much harder to work your way out of, but will significantly hurt your credit score in the process, leaving it harder for you to take out any future loans. This is where debt management comes in. This article will look at ways you can get back in control of your debts and answer the question: what is debt management?

Good Debt Vs Bad Debt

While all debt entails borrowing money you don’t have from a lender, what many people don’t recognise is that there is a huge difference between good debt and bad debt.

Good debt:

Have you ever heard that old saying, “You need money to make money”. Many people borrow to get themselves ahead. Whether they are investing in a property for their future, or a business idea that they hope will take off. This type of debt is good debt. The borrower is able to make their repayments on time, and if the risk pans out, will increase their net worth in the process, leaving them better off because of this loan.

Bad debt:

This is when money is borrowed to purchase depreciating assets. For example, if you take out money for a car loan, a holiday, to get you through to your next payday, and more, this is considered a bad debt. There is no way you can earn money off these investments, and if you are unable to make the repayments, it is all too easy to spiral into debt with this.

More often than not, it is bad debt that leads to future financial issues. If you have found yourself unable to pay back your bad debt, then you might be questioning what is debt management? And how can it help you?

good vs bad debt

Getting Out Of Debt

The most important thing to do when it comes to debt management is to make a start. Any type of action is a positive one when it comes to trying to get yourself out of debt. You have to start somewhere. Take a look at where you are sitting financially and whether you are able to continue paying off your debts on time.

If you are managing to make the repayments, then your best option is to tighten up the belt buckle and continue to remain on top of this. It will reflect positively in your credit file and give you the best chance of taking out any future loans.

If you are unable to make these repayments, this is the time to look into debt management. So, what is debt management?

get out of debt

What Is Debt Management?

Debt management plan looks at your financial situation and geta you back on track. If you have multiple loans, you may consider bringing them together with a debt consolidation loan or finding better interest rates. The idea is to get you the best plan moving forward to get you back on track financially. Here are some of the strategies you might adopt:

  • Additional repayments: if you have the means, making additional repayments on your loan can help pay it off quicker and pay less interest in the long run.
  • Debt consolidation: this is the process of bringing all your existing debts into one new debt to help manage the repayments and ease the process.
  • Start with high interest: by starting with your high interest loans first and repaying these, you can then move onto the next ones and pay less interest overall.
  • Start with non-deductible debt: this is a loan that has been taken out for a bad debt mentioned above. It is a debt that won’t produce income, so it is best to get this one paid off first.

Debt management can also involve making an unofficial agreement with your creditors to pay back your debt over a set period of time. Often, if you are having troubles making the repayments, it involves lengthening the time of the loan, so you have longer to pay it back. This is something that has to be agreed upon between you and your lender and is based on individual circumstances.

debt management

Setting Up Your Debt Management Plan?

Not sure where to start? When it comes to putting in place a debt management plan, it is often best to seek professional advice. If you are looking for a debt management plan that works for your individual circumstances, then get in contact with the specialists at Australian Lending Centre today. We can look at your situation and offer the best advice based on your needs.

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Short Term Loans

5 Benefits Of Short Term Loans

Taking a loan isn’t proof that you aren’t administrating your finances well or that you aren’t earning enough money to support your family. A loan is a great method that offers you a way out of a problem! In this article, we discuss the benefits of short term loans.

A short-term loan solves the issue immediately and without all the fuss that comes with larger loans. If you need the money to pay for medical expenses, house reparations or an unplanned trip visit to your family, that’s what short term loans are all about!

5 benefits of getting short term loans

They are manageable!

You can take a $500 loan and that’s it! Small loans were made to fix urgent matters, so take advantage of them! Short term loans won’t keep you up at night thinking how you’re going to manage interest rates and any other additional fees.

Unlike large loans that pose problems and can disrupt your finances, a small loan will help you out. Not being able to make payments on time and worrying about a bad credit score won’t be an issue when you deal with such short-term loans.

Online application

This is one of the biggest benefits of short-term loans. You can fill out a form on the Internet and wait for the money. Skip the road to the bank office and staying in line for hours. This type of loan comes with an online application that will only take you a few minutes of your time while doing it in the comfort of your own home.

Access the funding fast

Skipping the fuss that comes with larger loans also means getting the money faster! This is actually the exact purpose of short-term loans. They have been created for urgent matters that can’t be planned ahead. In just a couple of hours, you can receive the money and sort out your financial difficulties! It’s that simple!

You can customise your payment plan

You can borrow only the money you need, considering that a short-term loan doesn’t come with a fixed sum of money. If you think you’ll be able to pay it back in 3 months, settle a 3-month payment plan. If a 5-month plan sounds better, go with that option. A customisable payment plan allows you to get back on your feet without worrying that you won’t be able to repay the sum in the given period. You choose what’s best for you.

Dealing with a short term loan is easier

Taking a loan isn’t always a burden, especially if you borrow a small amount. Repaying a small loan in a couple of months can be entirely possible for your budget. So, you’ll be able to get out of your financial difficulty, and you won’t have any debts.

Short term loans are a great option to quickly get you back on track- that is of course if you don’t have significant debt. Of course with any loan it is important to take precaution. If you have any questions about short terms loans, read 5 questions to ask when applying for short term loans.

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Debt Management Financial Fitness Tax Debt Loans & Relief

Debt Reduction: How to Stop Spending Impulsively

Debt can be annoying and stressful. Trying to enjoy life whilst juggling a whole lot of debt, can however become overwhelming. Now throw in nasty shopping addiction and your plans to get out of debt can seem practically impossible. So how do you avoid overspending whilst reducing your debt? Is it even possible?

Introducing debt reduction tips

Debt reduction is all about making mental and lifestyle changes which can affect your spending habits. For some people, this may be kicking an addiction, and for others, it may simply involve setting a budget. Regardless of your personal situation, our debt reduction tips are here to help you stay on top of your messy finances.

Don’t buy things unless you need them

Have you walked past that designer clothes store to notice a fashionable pair of sneakers? You tell yourself ‘no, no I don’t need them’. Ten minutes later you find yourself sitting down trying them on. Five minutes later you’re in $500 debt to overpay.  People who are in debt tend to purchase everything they want, regardless of whether they can actually afford it or not. This craze is very common and it is otherwise known as impulse buying.

The trick to battling impulse buying is to stop and wait. Give yourself some time to decide whether you really need it or not. The best trick to dealing with impulse buying is to question your purchase decision. Ask yourself the following questions.

  • Do I really need this?
  • Do I already have a similar item?
  • What will I use it for?
  • How much is this going to set me back?
  • Can I actually afford it?
  • What can I do with the money if I don’t buy it?

You will quickly find that when you give yourself time to stop and reflect upon your purchase decision, you will realise that it is not a need. If however, it is a matter of necessity, consider if it is the best option available.

Think of loss as an opportunity

Before you make that big-ticket purchase, consider one thing. The loss of a certain thing you didn’t need but you really wanted is an opportunity. What we mean by this is that whilst you lose out on not buying that designer pair of shoes, you have gained the opportunity to pay off your debts sooner. At the same time, you have gained the opportunity to reduce your debt. Remember, debt reduction should be your ultimate goal. The sooner you remove unwanted debt, the quicker you can get on with your life.

When you’ve settled that, you’ll think twice before paying for trinkets. It will automatically become your instinct. As a consequence, you’ll be less impulsive.

Make a monthly budget

“This month, I’ll spend x dollars on food and expenses.” If we could suggest one main debt reduction strategy, it would be budgeting. A budget is the best way to reduce your debt and develop positive long term money habits. Luckily, there are many online calculators that can help you to evaluate your debt and set an appropriate budget.

Now, by all means, we don’t want you to starve yourself, but the goal of budgeting is to plan out your finances. Assess how much money is coming in and how much is going out. From here you can determine your saving capabilities(if any) and how long it will take to pay off your debt. To do so, you must refrain from overspending. Budgeting requires strict mental discipline.

If you don’t have many places to cut from, then consider additional income. This may include side jobs such as becoming a ridesharing driver or using your skills on upwork. This will help you reduce your debt quicker.

Don’t shop without a list

When you go shopping without a clear knowledge of what you need, you’ll always end up buying the stuff you didn’t even think about in the first place. Write everything down. Assess what you need before you go to the shop down the street. It will make it easier to stick to the basics. All the debt reduction tips you’ll ever find will include this one.

Avoid online shopping

More often than not, the prices you see on the Internet for the same products that you can find in any store are considerably lower. Because of this, you start adding stuff to your cart thinking “Boy, I’m so lucky!” Unfortunately, you’re not. You’re going to spend even more than you would’ve spent at the store. Everything’s so cheap that you just got to have all of it. If your debt is therefore out of control and is a result of online shopping, stay right away.

Don’t be pressured by the end of year promotions, or the large red banner that says “Sale, 50% off everything”. This will send you down a path of uncontrollable debt. The last thing that you want is a bad credit score which can arise from failing to meet your debt obligations.

Conclusion:

Debt is painful. It’s hard to splurge on big-ticket items. Unfortunately, you are in a situation that requires lifestyle changes. Debt reduction will only benefit you in the long run. For this reason, you must avoid overspending at all costs. You’ll push the deadline further away and, at the same time, you’ll amass more penalties. Implement these simple debt management tips, and your debt will dissolve faster. If you continue buying impulsively, you’ll only hurt yourself and your family.

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Debt Management Credit Card Consolidation Financial Fitness

Strategies For Getting Your Credit Cards Under Control

Plastic money, where all you have to do is swipe a card and that product or service is yours. It’s great, right? Until you receive your credit card bill and realise you don’t have the funds to pay it off. Before you know it, the interest starts to soar and your credit score takes a whack. Don’t worry, you’re one of many to have fallen into this trap! Fortunately, there are ways of getting your credit cards under control before it’s too late.

Here are six ways for getting your credit cards under control

1. Pay MORE minimum monthly repayment

Or more, if you can afford it. You have three choices when it comes to making your repayments:

  • You can pay the full amount and take advantage of the interest-free period on your card.
  • Pay more than the minimum repayment to limit the amount of interest charged.
  • You can pay just the minimum repayment. This is the least recommended option, as the interest will build up. This may lead you into more debt down the track, which is hard to get out of.

2. Lower those rates

All it takes is asking! The fastest and easiest way to ensure you get back control of your credit card is to shave off a percentage or two on your interest rates. Even a small amount can save you hundreds when it comes to paying off your debt. Call up your bank and simply ask! Your credit score is likely to play a role in whether or not this will happen, but either way, it never hurts to give it a shot.

3. Pay down your HIGHEST rate card first

This one makes sense. If you have a few different credit cards that you are owing money on and you can’t afford to pay them all off, start with the one with the highest rate. This is also known as the ‘Avalanche Strategy’. Tackle the card with the highest interest rate first, while maintaining at least the minimum repayments on the others. Once you get the first one paid off, you can work your way down to paying off the rest.

This method ensures you pay as little interest as possible while making these payments and getting your way out of debt. As you work down through your debts, the amount you can put towards repayments on the next debt increases with each cleared debt – creating an avalanche effect.

4. Budget

If you don’t have one already, now is the time to put one into place. Factor your credit card repayments into your budget, so you stay on top of them. Look at how much you are spending each month on each one and compare this to how much you earn. If you are spending more than you earn, then it is time to cut back.

If you are already in credit card debt, then add this to your budget. Plan to pay a little bit off each week, to make sure you are working to an end goal. If you are in debt, then set aside your credit card for the essentials until you have paid it off.

To get a good look at your spending patterns, check out your credit card statements. From here you can assess where to make cut backs. Utilise a free online budget planner to quickly understand where your money is going.

5. Pay off Your Smallest Balances

Depending on how many credit cards you have, you could find yourself a little overwhelmed. Start small and work your way up. This one is known as the ‘Snowball Strategy’. The idea is that you feel so much better getting one card paid off fully. This will give you the momentum to tackle the next one and then another after that.

This positive cycle continues and ‘snowballs’ until all your cards are paid off and you are back in control again. Unlike the Avalanche strategy, you could end up paying more in the long run, as you are ignoring which cards have higher interest rates and paying them off based on the amount instead.

6. Have a goal

Whether your goal is to be completely debt-free, or simply to be on top of your repayments, it is important you have this goal in place when it comes to taking back control of your credit cards. To keep yourself accountable, it can help to talk to a close friend or family member, so you stay on track and don’t find yourself too overwhelmed in the process.

Taking back control of your credit cards will have you in a healthier position for some long term goals, such as travel or taking out a mortgage. Remember, start small and build your way up again and you will soon find yourself debt free and able to stay that way. Think next time you pull out that handy little piece of plastic to pay for something.

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Debt Consolidation Debt Management Financial Fitness Financial Planning

How To Save Money When Online Shopping

Online shopping has become a convenient and easy way to buy what you want when you want..  Crazy bargains, heavy discounts, fast delivery, and convenience are only some of the reasons why people are shopping online. With all these ‘crazy’ bargains we are seeing an influx of people overspending. Consumers are buying anything and everything. Now – this is not necessarily bad; but if you find yourself turning into an online shopaholic, it may be time to start thinking about how you can save money when online shopping.

Here are some of the ways to save money when online shopping

Be quick or have patience

Have you hopped on to an online retailer to see the entire page full of Sales? You quickly find a nice pair of shoes. They are reduced by 15%, oh and they only have one more in stock. Luckily it’s your size. You cannot miss out? Can you? You add the shoes to your cart and away we go.

Finding a bargain can well and truly save you money, but sometimes, you’re really just falling for digital psychology – yes this is a thing!  Rather than buying with your emotion, stop, take your time and assess whether you need the item or not. If you really do need them and they are cheaper than competitors then go ahead. If however, you wait, you may see a further discount online. This discount may come later on through an email notification so don’t forget to register for their email notifications and then wait.

Search for coupons and use them prudently

The majority of people now are aware of registering to receive the seller’s email promotions. In saying so there are still a variety of online coupon providers such as Groupon that can help you save that extra cash. Search online for online coupons and use them at your disposal. Sometimes you may even be able to combine multiple discount codes. Win-Win.

Find the right days

Most companies have conducted their research into when shoppers are most likely to purchase. It is on those days that they will offer brains to draw customers in. For example, research suggests that the best time to buy clothing online is a Monday. Shoppers may save anywhere up to 50% on pants. Using that to your own advantage can be helpful. Buying your stuff on the right day will help you save. All it takes is a little research and patience.

Showcase your loyalty

Register for loyalty reward programs if you are a frequent shopper of a particular site. Your reward points on discounts and gifts will accumulate as you purchase your products. However, avoid going overboard when purchasing products to accumulate the points. The last thing that you want to do is buy something only for the sake of accumulating points. Save them and use them when you really need to.

Utilise social media

For the quickest and easiest way to catch a bargain, make sure you follow your preferred online shopping sites on social media platforms. Press the like icon on their Facebook page, start following influencers on Instagram and get on board their Twitter page. This is the easiest and greatest way to find out when products are on special. There are always giveaways and discount codes that get are available online.

Avoid overpaying on shipping

Thousands of companies allow you to jump the shipping fee if you buy goods worth a certain amount. Rather than making single purchases, consider creating a list of stuff that you need and order then all at once. When shopping online, look for websites that offer free shipping and whatever you do stay away from express shipping – unless you really need to.

Try to outwit dynamic pricing

A smart way to save money when online shopping is to take advantage of dynamic pricing. Dynamic prices can be defined as a fluctuating price that is shown to consumers depending on various factors.  These factors can include location, spending habits, current demand, and browsing history.

For example, if you’re shopping for an airline ticket, you may notice the price will change. You may have paid $500 for your first flight but when you check back on a different browser or your friend’s phone, the price has increased or decreased. There are two ways in which you can outwit the dynamic pricing.

  • Clear browsing history and cookies. This will make you appear like a new client on the site
  • Sign out all your account and use incognito mode to browse anonymously

Final word on online shopping

Use these tips to save some cash on all online purchases you make.  That can be via discounts, cash-back sites, smart tactics, shopping vouchers, and coupons. Above all avoid using buy now pay later services such as Afterpay. These services can lead you to a pit of debt.

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Debt Consolidation

Afterpay and the rise of Buy Now, Pay Later Services

Whenever you’re in a store and you see something that you’d love to buy, but your wallet is empty, you get full of frustration. You would do anything to get the necessary money, only so you can purchase the product before it’s out of stock. You’re not alone. A lot of individuals are experiencing this.

Since buy now, pay later services have been invented, people can get what they want, while not paying the full price from the get-go. Doesn’t that sound awesome?

Such services like Afterpay have risen, and millennials are loving it. While this might seem like a good option, it might not always be the wisest thing to do, especially if you have no plan on how you’ll pay the rest of the money.

Here’s what you need to know about Afterpay, and the growth of buy now, pay later services

Buy Now, Pay Later Services – What Are They?

Buy now, pay later services represent an option you have in stores when you want to buy a product, yet you don’t have enough money for the full price at that moment. Such a service allows you to submit to a plan where you pay part of the price at the beginning, whereas the rest will be paid in instalments over a certain period of time.

Usually, the buyer receives the product before making the full payment, which is something that attracts many individuals. Not to mention that the trend is extremely popular among millennials, as young people have fewer chances to receive a credit card – thus, they have to resort to other solutions. In certain situations, it’s a very convenient option.

The Rise of Buy Now, Pay Later Services

Since not all people meet the requirements for credit cards, the rise of buy now, pay later makes sense. Basically, these services let people buy something without making an upfront payment, or without having upfront interest or fees. For this reason, we are seeing millennials rush to use Afterpay.

With the rise of Afterpay, we are seeing a lot of younger consumers utilising Buy Now, Pay Later services. The Australian Securities & Investments Commission has declared that the number of people using this method has gone from 400,000 to 2 million. This boost occurred between the financial years 2015-2016 and 2017-2018.

What Is Afterpay?

Afterpay has become the most popular choice of service for Australians.  As mentioned it is a buy now, pay later service that allows you to pay for something in four instalments. This allows you to buy a product or use a service without having to provide full upfront payment.

One of the major appeals to using these Buy Now, Pay Later services is the fact that there is no interest charged. As a customer, you are required to pay for your purchase in instalments for about 56 days. Whilst no interest is charged, you will have to pay a late fee if you miss payments. Timely payments will grant you access to a free service.

Late payments

Buy Now, Pay Later services such as Afterpay are generating their revenue from customers who are late with their payments and merchant fees. In fact, 17% comes from late fees, and the rest comes from merchant fees.

The service has made a reputation ever since May 2016. It was able to raise $25 million through shares. It’s market capitalisation was of $165 million, after selling more than 15% of their equity. Afterpay makes sure to give the retailer all of their requested amount upfront, to assume the non-payment risk that may come with some customers.

Although Afterpay was launched only 3 years ago, 16,500 Australian retailers offer it as an option. Moreover, 10% of customers in Australia are using the service. Its success is undeniable.

Is it worth it?

Buy now, pay later services can be very convenient. They guarantee that you can purchase a product in time, before it sells out, even if you don’t have the whole amount of the price. As a consumer, this is really appealing.

At the same time, Buy Now, Pay Later services can be detrimental to your personal finances. Many young Australians are overspending and paying for products that they simply cannot afford. If you continue to miss payments, you can also receive a default on your credit file. Unless you clean your credit, you may struggle to secure a loan in the long run. Whilst alternative lenders offer support for people with bad debt, it is better to prevent this from happening early on.

The key to using Buy Now, Pay Later Services such as Afterpay is to come up with a plan, budget and make sure that you’ll be able to pay off all instalments in time. Not doing so will end up costing you more than you want to, and you’ll only deal with debt afterwards.

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News Debt Consolidation Debt Management Financial Fitness Financial Planning

Fast Loans and the Fastest Ways to Repay Them

When you need cold cash now, fast loans can be your best bet. Fast loans are quick and easy to obtain. Lenders can process loan applications within 24 hours meaning you can have your funds in your account overnight.

Whilst fast loans may be your saving grace, how can you repay your loan back quickly?

Here are some tips for paying back your loan faster

1. Pay more

If you can afford it, put in larger payments each month to pay off the principal more quickly. For example, $2500 fast loan with 6.8 % interest with a 10-year payback period would cost $28.8 a month. Making $70 payment on a monthly basis instead of $28.8 enables you to repay the fast loan in just over 36 months. By paying the principal more quickly, you will also pay for less on interest.

2. Make additional payments

The less you owe, the less interest that you will be charged. If you are able to budget effectively; you may be able to make additional payments to your fast loan.

3. Create a plan to pare your fast loans

Know exactly when your fast loans will end. Next, create a goal to pay it off within a specific period of time, commit to it and pay it according to the repayment plan. Make it a routine to pay it off monthly. If you’re facing difficulty in coming up with the monthly payments, create a budget and cut back on your expenses. This way, you can lift your debt obligations off your shoulder faster than ever.

4. Automate savings

Automatically transferring money into alternative accounts is a great way of saving that extra cash. Rather than spending money on trivial things such as movie tickets, or that unhealthy meal; automatic payments can help you set aside that extra cash to pay off your debt.  Make sure that you will only use that account for paying back your fast loans and other types of debt. This will require sacrifice in certain areas, but it will ensure that you are one step closer towards financial freedom.

With the growing wave of cryptocurrencies such as Bitcoin and Litecoin; some experts have suggested investing your extra savings into crypto. This is an extremely volatile and unpredictable form of investment that we do not recommend. Many experts compare cryptocurrency as a form of gambling. Whilst, it may seem as though there are immediate increases in profits; you may lose all your hard-earned savings in a second.

Hide your credit card in a safe place

Don’t be a victim of credit card theft. With easy access to your credit cards via pay pass; strangers who have access to a lost credit card can easily tap on purchases less than $100. Keep your credit card securely in your wallet. If you lend your card to friends or family, make sure you keep track of any transactions online.

Keep your phone in your pocket. 

The same rule applies to your mobile phone. With the rise of Apple Pay, you can purchase your transactions through your mobile phone. Make sure that you keep your phone locked with a passcode so that strangers cannot make any payments without facial recognition or a passcode.

5. Close some credit cards

Having them on your wallet may tempt you to spend more. Leave only the low-interest credit cards for your urgent needs.

6. Consolidate your debts

One of the best ways of ensuring that you continue to pay off your loan quickly is to consolidate your debts into one neat and tidy bundle. This will also protect you against the rising interest rates across different loans. This will benefit you in the long run; whilst making it easier to manage your debts.

7. Be proactive by increasing your income

Earning cash while dealing with your debts is a good way to stay proactive about overcoming debts. You don’t only generate wealth to pay for your loans; you also build your nest egg. If you can put away $100 every month out of your income, that would be $1,200 annual savings.

At the Australian Lending Centre, we can help you avail of our easy-to-pay fast loans and our debt management plans. We can help you strengthen your ability to repay your loans and live a financially secure life. It takes discipline and planning, but you can surely do it.

Contact Australian Lending Centre to get back on track. 

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Debt Consolidation Credit Card Consolidation Personal Loans

Saving Money On a Lower Income

There is a range of strategies you can employ to make saving money o. One of the major areas that can save you a lot in the long term is debt consolidation. There are also some other lifestyle choices you can make to improve your financial situation.

Many people think it is all too hard, but everything you do will help, even small changes can make a huge difference. We can all employ a range of measures that will prevent budget blowouts without sacrificing all the things you like doing.

If you are finding yourself on the roller coaster of no savings, bad debt management, poor (or no) budgeting and everything is a bit chaotic, Australian Lending Centre has some tips and tricks to get you out of bad debt employing activities such as debt consolidation, saving and feeling in control again.

First things first – Where Does Your Money Currently Go?

If you don’t yet have a budget, keep a financial diary for your pay period and track how you are spending your money. The Money Smart website offers a great money tracking app to make this easier. This will give you valuable insight into your habits and areas you can save.

  • What are you spending your money on?
  • How much is left over at the end of the pay period?
  • What money needs to go out on payments and bills?
  • Are there any areas of waste or unnecessary spending?
  • Are there areas where you are going backwards and getting into arrears?

Planning and Budgeting  – Where Will Your Money Go?

Once you have a record of what your current spending entails, get online to the Money Smart website and complete the budget tool. Be sure to include all your debts, payments, bills, and income. Mark payments and amounts in your calendar. Most bank online apps have the ability to schedule payments, so they come out when they are due, but if these are also in your calendar you won’t get any unexpected payments coming out. These regular payments can including things like:

  • Mortgage or rent
  • Car payments, car registration and insurance
  • Household/health insurance
  • Credit card payments
  • Loan repayments
  • Store card payments
  • Afterpay/ZipPay (remember that defaulting on these can effect your credit score)
  • Utilities such as gas and electricity (you may want to discuss bill smoothing with your provider – this is a regular payment over time rather than a massive and shocking bill each quarter)
  • Internet and phone

Bad Debts? Talk to the Credit Provider

The bottom line is that companies want to be paid. They are always receptive if you explain your situation, especially if you have, or are, experiencing financial hardship. You may be able to negotiate with them to reduce or put a hold on payments until you get back on top of things. Of course, you still have the pay the money back, but a hiatus on payments can help in the short term. Some credit providers will allow you to reduce the final figure if you can pay the debt outright. If they offer this, it may be time for debt consolidation. If you are too overwhelmed by the phone calls and letters, then talk to us about negotiating on your behalf.

Next Steps – Take Control With Debt Consolidation

When loans and credit cards get beyond what you can cope with in terms of interest and late payments, it might be time to call in help from the experts. Companies like Australian Lending Centre can offer a solution for a bad credit debt consolidation loan. This is where you negotiate with lenders for a reduced payout figure and then apply for a single loan that will cover all your bills in one payment with a lower interest than general credit cards and late payment fees. Having one simple debt consolidation loan payment to go out eat pay period is going to be a lot easier than trying to remember everything. The sooner you simplify your payments, the sooner you will be in an easier financial situation.

Money-Saving Tips

Turn off the TV

Are services like Netflix, Foxtel, Stan, Hayu and the iTunes store getting beyond ridiculous? Try cutting out all but the most popular one, to cut back. Turning off the TV will also help cut back on power and expose you to less spend-inducing ads. You might also have app subscriptions that you don’t need. Although these are small they can add up in a month.

Stop Hoarding and Start Selling

If you have closets full of unwanted clothes, try selling them online. A good clean out also helps you to see what your wearable wardrobe looks like so you can plan your clothes shopping to maximise your shopping budget. Also if you buy anything make sure it goes with the other items in your wardrobe. Take advantage of sales, why pay retail when most clothes will go on sale towards the middle of the season.

Look for those habits that add up

You can cut back on your habits, such as drinking alcohol during the week, smoking (probably goes without saying but your health and budget will thank you), buying coffees, can all save a surprising amount as well as having general health benefits. Limiting your drinking to the weekend can save hundreds a month, depending on your drink of choice. That bottle of wine after work at $15 a night can really add up over the week. Similarly, a $4 coffee each day is $20 a week. Make coffee at home in a keep cup and save money and the environment.

Stop using your credit card

By switching to using your debit card or cash for purchases, you will be more aware of your spending habits. It will also prevent the slide into bad credit debt.

Be frugal at the supermarket

Most of the time, buying in bulk or larger sizes are cheaper over time, so check on the prices for the larger sizes. Don’t shop with kids. Pester power is a thing and can increase your spend at the checkout. Never shop when you are hungry. Buy less meat, which is expensive, and opt for more meat-free alternatives, such as tofu, beans, and pulses.

Eat Smarter

With a busy life, planning meals can be a real chore, but while using services like Uber Eats seems like a good alternative, you are actually paying $5 on top of takeaway prices and it really can add up at the end of the pay period. By shopping in bulk, cooking healthy meals and taking the leftovers to work for lunch, you can save quite a lot each day.

Are You Missing Out On Government Payments You Are Entitled To?

Lastly, make sure you check all your entitlements with regards to government payments. As a low-income earner, you may be eligible for some form of financial support if you aren’t already receiving a government benefit. When every dollar counts it’s worthwhile claiming all you can. To check on payments and entitlements, check out the Department of Human Services. Even a small additional payment may ease your financial burden. Living on a low income is hard, but these payments are designed to help.

Small Changes with Big Returns

Once you have a clearer picture about where your money goes, you make changes to your lifestyle and start on the path to greater financial control, the happier, healthier and less stressed overall you will be.If you need help with debt consolidation, please get in touch. We’d love to hear from you.

Note: This information is general, and doesn’t take into account your specific personal and financial circumstances.

Categories
Debt Consolidation

Tips on How to Qualify for a Debt Consolidation Loan

If your credit score does not meet the minimum requirement of the bank, and you don’t have a regular income and you are spending more than 40% of your income on debt repayments, you may not qualify for a debt consolidation loan. Banks often reject applications of those with unstable income and negative credit entries on their credit report, unless they have sufficient security for the loan. Learn how to qualify for a debt consolidation loans when you have bad credit.

Check your credit history:

If you want to get a cheaper consolidation loan, you need to prepare your credit file. Though bad credit holders can still obtain affordable loans, it is advisable to know what’s inside your credit file. For all you know, you are just having a bad credit score because of wrong and inaccurate entries. It will also give you time to explain to your potential lender why and how you ended up with that score.

Many lenders understand that some life events can hold you back financially. Use the information in your credit file to explain your circumstances and to convince your lender that you are still capable of making payments despite certain financial setbacks in the past. So, grab that file and use it to have a better negotiation with your lenders. Get the loan product and loan arrangement that could help you get away debt-free after the repayment term.

You want to get rid of debts:

If you wait for a longer period to deal with your debts, it may get out of hand. Debt consolidation is advisable for those who are awaiting a crisis if they don’t eliminate the debts. It is true that bad credit is a huge issue in taking the loan. But, if you choose the right lender you can get access to the much-needed consolidation loan without making your credit score an issue.

Let’s say you have previous debts under five different lenders. Now instead of paying monthly instalments to each of them, you will get a consolidation loan pay the instalments to that new lender. The main purpose of taking the loan is to save money by eliminating all those debts with a higher interest rate in exchange for a bad credit debt consolidation loan with a lower interest rate.

Present valuable collateral:

Do you have a new car, boat, home or any pricey asset that the lender can sell or liquidate in the vent you default on payments? If you want quick approval loans, secure your consolidation loan with a pricey asset. Lenders no longer bother to look at your credit score when you secure the loan. They may also give you affordable interest rates which are comparable to the rates offered by banks. In fact, you may get around 14% APR or lower with good security.

You have a good repayment plan in mind:

While this is not a requirement per se, it is advisable to have a plan before you apply for a loan.

Some debt consolidation companies offer their services to borrowers who are struggling with debts. But, you can do it yourself. In fact, if you have a sound debt repayment plan in mind, you simply need to apply for a loan to consolidate your other smaller loans, and you can repay it within the allotted time frame.

Debt consolidation is only a suitable option for those who want to end up with more cash at hand at the end of the month, and with lesser debts to pay off. It is because there are many people who tried to consolidate their loans but ended up with more debts because they have chosen a poor debt structure and they don’t have a sound debt repayment plan in mind.

So, here are some questions to ask yourself before planning to consolidate your loans:

  1. Do I have the discipline to avoid using my existing credit cards the moment I paid them off with my consolidation loan?
  2. Can I stick with my debt repayment plan so that I will not end up with more debts in the process?
  3. What will I do to increase my income?

A loan is a loan-regardless of its type. That means you have to pay it back. Make sure that you use the proceeds of the consolidation loans wisely, not only to repay all your high interest and smaller debts, but to improve your financial life as well.

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News

Factors to Consider before Signing a Debt Agreement

A debt agreement is a contract that is legally binding between you and the parties concerned – the creditor, debt collection company or third persons involved. Consequently, each party can legally enforce the terms of the agreement against you if you don’t comply with your contract. Learn about the things to keep in mind before signing a contract that can make or break your finances. Always take serious consideration before signing a debt agreement.

The debt agreement process

When entering into a debt settlement, you have to understand that the creditor expects you to be ready to pay your debts. So, prepare to negotiate a certain sum of money or asset to pay for a percentage of your combined debt. Make sure that you can afford to pay it over a limited period of time. In debt settlement, you don’t pay your creditors directly. Instead, you make repayments to the administrator of your debt agreement.

Negotiation takes a little bit of patience and persistence because creditors also know that once they agree to a particular amount, they cannot recover the full amount of debt anymore. Knowing that they cannot get back the full amount you owe, they may give you a hard time during the negotiation process.

Legalities of your debt agreement

A valid contract is an agreement where all the parties agree to it. Meaning, there is mutual consent between you and your creditor. It must state the object of the contract—or the consideration which is typically a sum of money, or asset paid by the debtor to the creditor. The agreement must not allow you to do something illegal in return of debt forgiveness or reduction of penalties. It is also important to be mentally capacitated to enter into an agreement. You must be mentally sound and at least 18 years old to ensure that you are competent enough to enter into a binding agreement.

negotiations

It is important to note that the object of the contract or the “consideration” must be something to be negotiated upon. An agreement is impartial. It gives you the perfect opportunity to discuss and compromise on the terms of the debt agreement before reaching a final contract that is acceptable to you and your creditor. But, take note that there are non-negotiable contracts, but you can still look for ways to ensure that the terms will be satisfactory not only to your creditor, but to you as well.

The agreement must not contain provisions that disagree with the contract laws in your state. You can talk to an attorney to verify the terms of your contract before signing it. Or, you can educate yourself and check whether there are illegal terms in the contract that will jeopardize not only your finances but your reputation as well.

Negotiation points

Write down your objectives for entering into an agreement. What is your desired outcome? Do you want to pay your debts in full while paying for it at a lower rate? Or, do you intend to let go of your assets to finally eliminate your debt? Before you negotiate a contract, have a specific outcome in mind. For example, if you want to extend the loan term, then you should know exactly how long you would like the loan extension to be.

Before beginning negotiations, you should know where you stand. Are you financially capacitated to respect the terms of the contract? Take note of your financial standing and the surrounding circumstances that may prevent you from abiding by your agreement. It is also important to determine your bottom line. Know the highest repayment amount you can make and the lowest one that you think the creditor can accept.

check-options

Check other options

Do you think it’s time to give up and take up bankruptcy instead? If you have no income, and you’re not in any way capable of making even the minimum repayments because of unemployment, and you can’t meet your daily needs, maybe bankruptcy is a better idea. But, it will definitely ruin your credit score, take away your assets—and probably leave you on the streets. The only upside is that your debts will be eliminated.

If you think you can still get a job, improve your business or get any additional source of money to keep up with a minimum payment each month, debt agreement is a better idea.

It is important to note that debt agreement does not refer to debt consolidation. When you consolidate loans you simply roll your existing debts to a new loan; with lesser monthly repayment, lower interest rates and fees and in one easy payment method each month. While debt consolidation companies sometimes negotiate with creditors to lower the repayment each month, there are companies that simply pay off all the loans and charges a new rate to their customers.

Is debt agreement the right solution to your financial situation right now? Talk to us today!

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Debt Consolidation Debt Management

Is Debt Consolidation better than Bankruptcy?

When you have a lot of debts with different interest rates, the first thing you will think of is debt consolidation. However, there are certain situations when debt consolidation doesn’t make the cut and other options seem more feasible. Is bankruptcy one of them?

We will compare two financial services – debt consolidation and bankruptcy – and we will see which one is better for your situation. Note that before you make any request for these types of financial services, you will need to contact an expert to get an idea of what to expect. He/she will also tell you if it is a good idea.

Debt Consolidation

Debt consolidation is a great tool you can use to save money and leave your credit rating unaffected. Debt consolidation will take all your debt payments and transform them into one payment. The idea behind this method is to make the monthly payment and the interest rate lower. You can consolidate your debts through a secured or an unsecured loan. This service requires a certain fee but in the end, you might save more money than before, and you will regain control over your finances.

Here are the pros of Debt Consolidation:

  • Your credit rating and reputation are protected. Your credit score won’t be affected, and you won’t be bankrupt, meaning that your financial status won’t be made public. Bankruptcy records are easy to find and view, and this kind of reputation can affect your future financial endeavours.
  • You can simplify your debts. This means that you will focus on one payment with one interest rate, but you will also get to pay every debt in one go. In other words, you will no longer have to worry about missing a payment or paying it later than usual and suffering the penalties.
  • Debt consolidation will also let you keep your credit cards, unlike other services.

Cons of Debt Consolidation:

While debt consolidation is an excellent method of regaining control over your debts and economy, you could end up paying more in hidden fees, and you might even lose the property. Here are some things to consider:

  • Hidden costs: Here is a thing that many people don’t take into consideration – the loan term. When you apply for debt consolidation, you will pay less every month and have a lower interest rate, but the loan term will be increased. If you stay in debt for an extended period, you may end up losing more money in the long run.
  • Losing property: If you default on your loan, you can lose your car or even your house. Depending on the agreement you signed with your lender, if you default on your consolidation loan, you might end up losing a lot more than just money.

Bankruptcy

Though bankruptcy sounds scary, it isn’t the end of the world. You can eliminate certain debts when filing for bankruptcy. Here are a couple of things to consider when filing for bankruptcy:

  • When you file for bankruptcy, the creditors cannot harass you or take legal action against you. That means that you also are protected against foreclosures or repossessions.
  • Back to square one: Bankruptcy will eliminate most of your debts, and you can get a fresh start. Depending on your financial situation, you can even keep your car and home and pay them at a reduced rate.

The Negative Part about Bankruptcy

Like any other financial service, bankruptcy has its negative factors that you need to consider before applying for it. Here are a couple of things you should check:

  • Credit rating: Your credit rating will be lowered depending on the type of bankruptcy you apply for and your situation. Your credit report will show the bankruptcy anywhere from seven to ten years. Of course, you may already have bad credit seeing that you owe a lot of money and you are bankrupt because of it.
  • You can have a fresh start once you receive your bankruptcy discharge, but until then, you will have a hard time with lenders and other financial institutions.
  • Your reputation: Bankruptcy can be easily discovered by your employer or people who are associated with you, business-wise.
  • Financial sacrifices: You will have to sell your possessions if you want to be eligible for bankruptcy.

In the End

So, is debt consolidation better than bankruptcy? It really depends on your situation and what you want to achieve.  If you want to learn more about the benefits of debt consolidation call us on 1300 138 188 or visit the Australian Lending Centre for expert advice.

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News

Variable-Based Tips On How To Manage Your Debt

If you’re planning to get a new loan, but you’re not sure if you can repay it on time, here are tips on how to effectively manage your debt, based on 2 financial variables.

Financial success does not depend on the amount of money you have but on specific strategies that apply to your situation. Whether you will use the funds for personal or business purposes-increasing your cash flow is still vital to a successful debt management plan. Debts may increase or decreases depending on your strategy, in the same way as your spending habits influence your cash flow.

You cannot just say that you are going to pay back your debts without some detailed strategy.

The first thing that you can do to manage your debt is to improve the variables that eventually determine your financial capacity to repay. Improving these 3 variables about your debts you will increase cash flow and pay off your debts and improve your finances.

Earnings

How much is your after-tax net income? What about your after-debt repayment income? When computing your free-money, look into your debt to income ratio first.

Your debt income ratio refers to a certain percentage of your monthly gross income that you use to pay debts. It has two classifications: The front-end ratio, or the percentage of income you use to pay for your mortgage, rent, property taxes and other similar housing costs. Second, the back-end ratio, which is the percentage of your income that you pay for all your personal loan and credit card payments and other recurring debt payments, including those covered by the front-end ratio. As long as it is recurring debt, it is still covered by the back-end ratio.

To calculate your debt-to-income ratio, add up all your monthly debt payments. Divide that number by your current monthly income. Get the percentage by multiplying the result by 100. Let’s say if you spend $1000 each month on debt and have a monthly income of $4,000, your debt to income ratio would be 25%.

Increasing your income and at the same time paying your debts can help you lower your debt to income ratio, giving you higher free cash for your other needs. You can also increase your debt payment to quickly pay off your debts until you achieve a zero-debt ratio.

Financial satisfaction

Are you satisfied with your present financial situation? Or, do you find it difficult to meet your monthly payments on your bills?

How much money is enough and well-enough for you? What might be enough to pay all your debts may not be well enough to sustain your lifestyle, pay for your emergency and daily needs and invest for the future. Or, it could be sufficient for you as long as you plan your budget wisely.  Decide how much might be enough for you and your family if you have one to know what number you should definitely try to reach.

Discover more tips on how to manage your debt by talking to our in-house loan experts at Australian Lending Centre today!

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Debt Management

The Wrong Ways to Pay Off Your Debt

Being in debt can be stressful, no one denies that. And the pressure can place you in a range of challenging positions, forcing you to cave in and make the wrong financial decisions. Embracing the right ways to pay off your debt is more than mandatory.

But how do you know which are those? Well, you must get acquainted with the practices that should be avoided, and this is what we’re going to discuss in today’s article. Keep on reading to discover the wrong ways to pay off your debt.

Consolidate with a high-interest loan

Debt consolidation makes sense when the financing solution provided by the lender is actually favourable. If the loan terms are convenient for your financial situation, you should go for it. Nonetheless, choosing debt consolidation for the wrong reason and failing to analyse the implications of the term will do you more harm than good.

In the case in which the only loan you can obtain has an interest rate that is higher than your credit card debt, you should leave it aside.

At first, you may believe that your monthly repayments appear lower with debt settlement. Nonetheless, that is only because the loan has an extended timeframe. If you were to calculate the interest you’d end up paying during the life span of the loan, you might come to realise that such a solution is not the best. So, this is definitely one of the wrong ways to pay off your debt.

Misusing your home equity loan

The second on our list of one of the worst ways to pay off your debt: choosing a home equity loan. Even though you may assume that this could be the answer to all your problems, this is not always the case. Of course, there are many situations in which this option actually works. As always, everything depends on each person’s financial conditions.

However, if you’re struggling with high-interest credit card debt, you should pinpoint the root of the problem. For example, your debt situation might be a result of reckless spending and poor money management skills. If you don’t aim at solving the problem from its root, you are prone to end up in this exact scenario in a year or two. So, it goes without saying that a home equity loan won’t work as long as you don’t fix the underlying issue. In the case in which the loan ends up being unaffordable, you might lose your home as well.

Choosing the support of a debt settlement company

Accepting the guidance of a debt settlement company is, without a doubt, one of the most unfavourable ways to pay off your debt. As it is expected, these kinds of businesses advertise as being the solution to everybody’s money related problems. Nonetheless, after you manage to settle your debts, by paying significantly less than you owed, your credit rating is terrible, and you’re back where you started. Not to mention that we’re talking about a lengthy process. Even if your attempt is successful, you’ll have to work on rebuilding your credit score for years.

So, try to stay away from the methods mentioned above. There are other ways to pay off your debt without affecting your credit score in the process. Speak with a financial expert like Australian Lending Centre who offers free consultations on paying off debts and managing people’s finances.Save

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Debt Consolidation

When Is a Debt Consolidation Loan Feasible?

Debt consolidation loans are meant to pack multiple small loans into one that is more manageable. It is one of the most common forms of debt relief. However, not many people seem to know when a debt consolidation loan is feasible.

There are some things you must take into consideration when you’re tempted to amass your loans into one.

So when is a debt consolidation loan feasible?

  1. When you pay extremely high-interest rates

Credit cards, usually, have the highest interest rates. When you need to pay a lot of interest, the debt is growing at an alarming pace, faster than you can repay it. Debt consolidation loans, on the other hand, might offer you better interest rates altogether. If you pay more than you can afford in interest, you should definitely consider a consolidation loan.

  1. An endless number of bills

Getting tons of bills can make it so easy to forget to pay a certain debt. You simply cannot keep track of everything. A consolidation loan is feasible if you’re in such a situation since you’ll be receiving just one bill until you’ve dissolved your debt. This will automatically lead to better management of your time and money.

  1. When the loan is unsecured

If a loan is “unsecured,” it means that it is not attached to any of your assets, like your house and car. Secured ones are certainly not a good idea because if you fail to repay the debt, you could get homeless or devoid of the asset you’ve secured the loan on. Try to stay away from secured loans at all times. It’s just better to find another way to pay your debt without risking your house as collateral.

  1. When you’re willing to repay for a longer time

Debt consolidation loans allow you to pay less than you paid on your previous debts, but that means that the repayment is going to take longer. Are you willing to do that? This can be a hassle for some people who want to get it over with as fast as possible. Still, if you have no problem with that, then you should consider taking such a loan.

  1. When you don’t end up paying more interest

Yes, it is possible to end up paying more interest on a consolidation debt than you would’ve paid for all the other separate loans. Surely, that will impact your credit score if you fail to pay. And before you know it, your credit rating will be so damaged that you will find it even harder to get another loan in the future.

Debt consolidation loans can truly be a great help, but you must know when you need them. Moreover, there are many other aspects that come into play, like the ones mentioned above. So, review your situation thoroughly before you take such a debt consolidation loan because it can have disastrous consequences if you go for it lightheartedly.

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Categories
Debt Management

Tips for Erasing Debt

Feeling discouraged and overwhelmed by debt is a feeling that many Australians experience. And things don’t get by any chance easier when you want to make ends meet, and your income is limited. Unfortunately, there’s always the temptation of agreeing to high-interest loans, assuming that it’s a temporary solution. But, in the long term, making rushed financial decisions will jeopardise your chances of accumulating savings. So, if your question is how to erase debt, keep on reading.

Prioritise your payment plan

Considering that you have limited income, you should start by prioritising your expenses. Bear in mind that necessities such as utilities, unpaid federal taxes, student loans and others should be in your focus. As for credit card debt, this is a common concern for many Aussies as well.

First of all, target the card that has the highest interest, and focus on that if your debt enables you. But, most importantly, you should start budgeting and distinguishing between urgent debt and the debt that can wait.

Consider Debt Negotiation

Our next tip on how to erase debt is to embrace debt negotiation. Of course, you know how much you owe your creditors. But it wouldn’t kill you to try discussing with them about lowering the interest rate. Many times, lenders are more than willing to negotiate; it’s up to you to try.

Factor in debt consolidation

Taking on debt consolidation can be the right strategy if you have multiple credit cards and loan bills that confuse you. Instead of having numerous bills and payments on your mind, you could pay a single, tidy bill.

The most considerable advantage to debt consolidation is that, if you have fewer creditors to pay, you’ll manage to make repayments in time. That is crucial for improving your credit score. Plus, it might simplify your finances, on the whole.

There are cases in which lenders or brokers provide you with attractive interest rates. Nonetheless, do bear in mind that if you’re paying less than the total amount of bills combined, you might have exceeded the repayment timeframe. Make sure you don’t agree to that unless it’s what you want.

So, debt consolidation can be the answer to how to erase debt.

Avoid taking on other loans

Did it ever occur to you that the reason why you’re in debt is that you depend on credit cards on a regular basis? So, if you want to learn how to erase debt, it makes sense to analyse your spending habits and see where most of your finances go. If you reckon that your weakness is utilising credit cards on a whim, you should acknowledge the downsides of such cards and try to address the problem.

We hope that you found our tips on how to erase debt handy. Bear in mind that after you have managed to become debt-free, you should be mindful so that this doesn’t change overnight. One thing is for sure: debt can be managed even with limited income, it is up to you to embrace the right tactics.Save

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Personal Loans

Does Getting a Personal Loan Affect Your Credit Score?

Personal loans can have a negative impact on your credit score if you fail to repay them on time. Just like it is the case with types of loans, if you’re failing to make monthly repayments, then your credit score deteriorates. But does getting a personal loan affect your credit score?

Problems can start to appear when you’re trying to get a home loan and financial institutions dismiss your application. On the other hand, taking personal loans can actually help your credit score if you’ve never applied for a loan, or dealt with banks up until now. An absent credit score doesn’t mean you have a good credit score. It means that financial institution will be sceptical about you, due to not having any type of information regarding your income or taxes.

Let’s take a look at the impact that personal loans can have on your credit score. Also, let’s see why and how we can address this situation.

How Can Personal Loans Improve Your Credit Score?

  • Just by taking a loan, you start to build up your credit score
  • Paying back the loan proves that you are a worthy and valuable borrower
  • Repaying the loan even faster than the due time shows that your finances are doing great
  • Never skipping payments is a sign that you haven’t taken more than you can afford
  • An active credit history will get you extra points on your credit score
  • Maintaining your account open, even after you’ve settled your debt shows you are a loyal client
  • Personal loans registered on your name reveal that you are mature and Thus, you’ll receive another couple of points on your credit score.
  • The fact that you’ve taken and repaid a personal debt makes you eligible for a home loan, or car loan if the need arises.

How Can Personal Loans Lower Your Credit Score?

  • Failing to make regular payments for your loan will bring you a bad credit score
  • Co-signing on someone else’s loan can affect your credit score as well, for the better or for the worse, depending on whether that loan was paid on time or not
  • Payment defaults and overdue bills do not reflect well on your credit score
  • Refused personal application loans will make it harder for you to get a loan in the future
  • Taking personal loans without first calculating how much you afford to pay each month will not benefit you in the long run
  • Having no sort of credit history also means having a zero credit score, which again, is not good
  • Paying a personal loan 60 days after the due time will lower your credit score greatly
  • Increasing the usage of your personal loan by more than 30% is not recommended.

Personal loans can affect your credit score for the better or lower it up to the point where we’re no longer eligible to apply for a home loan with fixed interest rates or different features that we may like. Keeping your credit score balanced can be done so always try to make regular payments.

Categories
Debt Consolidation

Questions You’ve Had about Consolidating Debt But Haven’t Asked

Debt consolidation is regarded with kind eyes by many Aussies and often described as a solution to all of your problems. Just like the name says, debt consolidation refers to putting all of your debts together, in order to keep track of your payments easier. But perhaps you have questions about consolidating debt. Maybe you are unsure how it works and confused about how you can save money by choosing this finance option.

In this article, we reveal all!

Is Debt Consolidation the Right Choice for You?

If you’re making multiple payments per month, then you know by now that each comes with different interest rates and fees. In this case, yes, debt consolidation is the right call. Also, by consolidating your loans, you will always have to make one monthly payment, instead of sending money to a number of lenders.

Here are the top 6 questions about consolidating debt:

  1. Can I combine my home loan with my personal loan?

Consolidation allows you to combine all of your loans into a single one, regardless of their type. Keeping track of your home loan, car loan, personal loan and so on can be tiring. This is a time-saving solution.

  1. How will consolidation benefit my expenses?

Some loans have bigger interest rates than others. By combining them, you will have a fixed rate that you’ll pay monthly. This way, you’ll know exactly the amount you’ll have to repay, without also having to deal with various taxes and fees that accompany each loan.

  1. Am I eligible for consolidation?

Everybody can choose to consolidate their debt. Still, check with your lender and see if your home loan allows you this option. If not, try to change the features or simply look into a refinancing that incorporates debt consolidation.

  1. Is it better to pay my car loan in 30 years?

When you combine all your loans, you can choose to prolong the payments, in order to fit your home loan. Unfortunately, even though your rates will be lowered considerably, the interest fees will expand due to dividing the car loan for example, over a period of 30 years. You can adjust the debt consolidation to fit your needs.

  1. Should I consolidate if I have bad credit?

This is actually the main reason why people consolidate their debts. Debt consolidation tells lenders that you have placed your affairs in order and are serious about improving your financial situation. Also, it will enhance your credit score.

  1. How can the equity in my home help?

Through debt consolidation, the equity in your home can reduce significantly the interest rates you’re paying each month. Being a secured line of credit, a home equity loan will use the equity in your home as collateral, which can lead to a fixed and smaller interest rate.

If you’re having financial problems and can’t afford to pay back all your loans, expanding the loans over a longer period of time will help you get back on your feet by paying less each month. So, talk to your lender about this option.

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Debt Consolidation

Are You Falling for these Debt Consolidation Traps?

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!

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Debt Management

5 Warning Signs of Out-of-Control Debts

The first sign of a financial problem is the denial that you need to ask for debt help. We are about to help you learn the warning signs of out-of-control debts so you can take back financial control.

A person is most likely to ask for help upon reaching the rock bottom when the only logical way out is bankruptcy. Before you sink deeper into debt, here are some questions you can ask yourself to know if you are in serious need of debt help.

Am I spending over my credit limit?

If you have maxed-out your credit card you can see an “over-limit” added to your next monthly statement. Though not all cards charge these fees because some card issuers waive the penalty, exceeding your credit card limit is a sign of personal financial mismanagement. It can seriously hurt your credit score because credit utilization accounts for about thirty per cent of your credit score.

If you didn’t stay well within the limit available to you, it would alert the credit score company that you are having a hard time managing your finances. You have two options here, either you increase your credit limit or you take a look at your spending behaviour. If you are barely able to pay your bill each month, choosing option number two is a good idea.

Do I have multiple credit cards?

Some say that you can never have too many credit cards because you will end up using them. The truth is, having multiple credit cards can help you boost your credit score, and they may come in handy during emergencies. But if you have the habit of forgetting to make payments or you are tempted to spend beyond what you can actually afford to pay because of the available credits, it can hurt you. One of the biggest warning signs of out-of-control debts is mounting credit card debt.

Remember that the best way to fatten your wallet and get out of debt is to manage your current accounts and your available finances responsibly.

Am I using credit to pay for basic necessities?

If you are using credit for small purchases such as food, gas, rent and utilities not for convenience but necessity, it could be a sign that you need debt help. Not paying your monthly bills on time and charging your living expenses to your credit cards may push you deeper into debt. Talking to our debt management specialists can help you rearrange your budget so you can have money for your living expenses.

Do I constantly borrow money from relatives or friends?

If you always run to your family and friends during financial emergencies and you’re still short on cash despite loans and credit cards, it may be time to learn how to budget your money. You can start with a debt management plan to know how much you really need to pay off all your debts and the amount you need to live comfortably. While you can make a list of all your debts and do the math, getting the help of debt management would be a better idea, to know about debt consolidation options and other debt management strategies.

When do I ask for debt help? The answer would be now. The moment you start asking yourself that question, it means you are having troubles managing your finances.

At the Australian Lending Centre, we can offer you the best debt counselling service in Australia and help you explore options and make decisions regarding your personal finances and debt management problems. Contact us today to learn more about debt assistance, debt agreements and debt relief services.

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Debt Consolidation

Top Questions to Ask Yourself before Consolidating Your Debt

Debt consolidation is the process that gathers the total amount of your outstanding debts into one single loan. As with any other financial procedures, it may or may not work for you. The key is to know what to look at to ensure that you’ve made the right choice for your personal background. Here are some top questions you should ask before consolidating debt.

  • Can you afford to pay the debt?

First and foremost, you need to evaluate the immediate effects linked to debt consolidation. What impact will it have on your financial situation? Will it help you to manage your finances better or make you lose absolute control of them?

  • What is the primary purpose of the loan?

The first thing you should do is to distinguish between what you want and what you need. Only because you want something really badly, this doesn’t mean you should immediately borrow money for that, unless it is actually relevant. Also, be mindful especially if your loan involves a third party such as a family member or friend in the position of a guarantor.

For this kind of loans, you are held responsible in case of non-payment or defaults. What is more, if you’re considering taking a loan in order to pay your utility bills, you should discuss the matter with your financial provider. He/she will give you an expert insight into the issue.

  • Can you manage to make the repayments?

This is one of the most important questions to ask when looking at consolidating debt. You should make sure that taking up a loan is the right choice for you. Also, see if you can manage to make the repayments in your current financial scenario. If you anticipate that you can work on diminishing your monthly expenditure, we recommend you to do that before actually seeking to take another loan.

It’s also highly recommended to factor in possible interest rate increases, and unprecedented changes in your circumstances and budget.

  • How does your credit report look?

Note that credit providers will always evaluate your credit file in order to appraise your capacity of repaying the sum within a given timeframe. Considering that you can obtain a copy of your credit report free of charge, you should do that in advance, to ensure that there aren’t any mistakes.

It may seem like common sense, but you should bear in mind that debt consolidation is still debt, and you should treat it as such. It is a decision that can be really helpful to numerous individuals, but it requires a lot of thought. So, the verdict is entirely up to you, your budget and personal specifications. Make sure you establish a financial goal and craft a realistic schedule for paying off your debt. Sometimes, we ought to embrace a range of changes to diminish debt, and this applies in all cases.

Bear in mind that each situation is distinct, and you can always discuss with a financial consultant before making a call. After weighing the pros and cons related to debt consolidation, you’ll be sure that you’ve made the right decision.

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Debt Consolidation Debt Management

The Importance of Avoiding Bankruptcy

Bankruptcy is that particular legal status of a person, a company or other entity that can no longer repay his or its debts to creditors. Even though some people may affirm that bankruptcy also has a few advantages, the list of disadvantages is definitely much longer. For this reason, you should think of bankruptcy only as an ultimate last resort, after you have used any other alternatives. Learn the importance of avoiding bankruptcy below.

Main Disadvantages of Bankruptcy

No matter if it belongs to a person or business, this status triggers a wide range of disadvantages, which will have a major negative impact on someone’s reputations. Furthermore, there are also practical drawbacks that will be experienced for sure by the person in this situation. Some of them are immediate while others will come around later.

First of all, you should be aware of the fact that you will lose most of your proprieties that are valuable. You will be allowed to keep only the assets you need for a basic standard of living. Anything you own and have a high value will be sold in order to pay the money to your creditors.

Another aspect you should consider before declaring bankruptcy is that you will encounter plenty of difficulties when trying to access credit. There is a specific limit of the credit you are able to obtain, but your chances are significantly lowered by your status, as there are only a few banks which take the risk to borrow money to a bankrupt individual. You may think that soon after getting rid of the bankruptcy, this problem will end. In fact, this issue will haunt you for seven years as the bankruptcy record has to be added to your credit report and remain there throughout this period. Also, according to the policy of some banks or finance companies, your access to your credit cards can be banned.

Moreover, there is a permanent record regarding this aspect that may be accessed by anyone who pays a small fee. They will be provided with an electronic index of these records, also referred to as the National Personal Insolvency Index.

When it comes to reasons why you should be avoiding bankruptcy, another important aspect is that this status will lower your chances of getting employed. In fact, even if you would convince an employer, there are particular industries with strict rules regarding this aspect, and they need to obey them and not hire you.

Less Extreme Alternatives to Bankruptcy

A convenient alternative is a debt agreement. This option is available for those who have not filed a bankruptcy form and consists of a debt settlement arrangement between you and your creditors. This will allow you to settle affordable debts, for example by freezing the interest rate.

Another less extreme alternative is a consolidation loan, which will help you manage your current debts much easier.

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Debt Management Investment Property Loans Personal Loans Short Term Loans

Self Improvement Tips – Learn from Successful People

Self improvement is a continuous process that most successful individuals practice. Success doesn’t happen in just a snap and it doesn’t happen overnight. People work hard for it and how you maintain it is quite challenging. How do they keep the success? Self improvement plays a vital role when achieving to be at the top. Even successful individuals keep on finding ways on how to improve themselves.

Self Improvement Tips

Listed below are effective self improvement tips that you can follow:

  1. Get up early – You can do a lot of things when you wake up early. The brain works best after 2-4 hours of sleep. Staying in bed makes you feel lazy. Rise and shine early. Be lively and energetic.
  2. Work Out – Physical activity is important and successful people like Mark Zuckerberg works out and trains with his personal coach 5 times a week. You have to do this on a regular basis. Not only does it keep you in shape, it also makes you feel good about yourself.
  3. Plan – Make a plan of what you want to achieve or write about your future goals. This is for long term or future plans. You can do it on a daily basis. Write down what you want to finish or what you want to accomplish within the day. Having a plan keeps you organized.
  4. Hobby – Play an instrument, paint, or engage in photography. Knit, bake, record songs, there are many ways to enjoy and keep you busy. Work makes you feel stressed, release the stress by engaging in these activities.
  5. Learn – Keep your brain working. Reading helps you learn a lot of things. Read books, magazines, go online and read reliable sources. It keeps you updated. You can always learn something new whenever you read. Self improvement requires determination and willingness to learn something new.
  6. Be Active – Play tennis or golf during the weekends. Engage in sports. Go biking, or learn a new sport.
  7. Meditate – Successful people are always busy, stressed and irritable. Working too much is not healthy. Meditation lowers your stress levels and keeps you relaxed.
  8. Bond with loved ones – Find time to be with your family and friends. Working 24/7 is not just unhealthy but it also keeps you away from your loved ones. This is a practical self improvement way to maintain balance between work and loved ones.
  9. Analyze – Is it a productive day? Was I able to do what was on my planner? Seeing your accomplishments makes you feel good. Finishing your tasks ahead of time is better than rushing to beat the deadlines. It’ll cause you to panic and feel stressed. So seeing those checkboxes with a good number of checks will boost your energy and inspire you because you have accomplished a lot.
  10. Sleep – Nothing beats a good amount of sleep. It allows your body to rest and prepare you for the next day.
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Business Loans Debt Consolidation

Debt Help In The Farming Industry

Farmers often go into debt to help keep their farms running. Like many other businesses, the farming industry depends on the availability of funds to borrow to get them through tough times and also help them grow when times are good. Just like everyone else, farmers can fall on hard times and have trouble paying their debt. In this case they will have to seek debt help in some form.

Understanding debt obligations and what debt can do for the farming industry is crucial to its business outlook in the medium and long term. An important point to know is how debt and equity differ from each other. Debt has lots of demands that come with it while investor equity is less likely to cause a business financial strain.

When farmers do decide to take on debt it should be used to increase productivity. If the debt payments cannot be made out of profit from the debt then the payments will have to come from other profits. Since profits from farming vary significantly it can make it hard to predict when the payments for debt will come directly. The debt might be investing into something that takes a season or even years to create a return.

It is important to make sure that there will be cash flow to make debt repayments. If a farm was to take on too much debt too early and the cash flow gets tight then it might make it hard to make debt repayments and it could actually ruin the business.

Farmers also need to factor in that the prices for the goods they need fluctuate quite a bit as well. A sharp price increase in something vital for a farm can cause cash flow problems that can put a farmer’s finances in the red.

Debt Help In The Farming Industry

Once anyone is behind on payments it can be hard to get debt help. Not only farmers but any business can struggle to get an outside investor to step in and save their business when their books are out of order. They might have to start selling assets to get their books in order before they can get debt help. A farm is run basically like any other business and the farming industry uses loans to help grow and expand. Knowing how to use debt help responsibly is as important as any other factor in the farming industry.

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Debt Management Financial Planning

Pay Off Debts and Save for Retirement

Saving up for retirement is one of the things that everyone should pay attention to and take into consideration. Sooner or later, you’ll realise it’s time to stop working and retire. It would be nice to retire if you have sufficient money and don’t have any debts to pay and worry about. Retirement is a stage in life where you can relax, travel and enjoy life. But it is impossible to do any of these if you are in debt. Before you reach this point in life, you should have at least paid all your debts so you can enjoy your retirement.

Planning Your Retirement

Are you in your 40’s or closer to your retirement age? What are your financial goals? Do you want to set up a retirement fund but are having difficulty because you simply cannot get out of debt? Do you want to invest in the future? It is best to determine your goals in life.

It is ideal to put up an emergency fund; it may not be like what financial experts suggest but saving up even smaller amounts is better than nothing. Why emergency fund? You don’t know what’s going to happen in the future or in the next few days. Without it, you are going to rely again to your credit cards or private financing. But if you have an emergency fund, you are preventing yourself from borrowing money with high interest rates.

Before you reach your retirement age, it would be ideal to have paid off your debts. Again, you can practice the stack method. This method requires you to list down all your debts. Loans with highest interest rates should come first, down to the lowest. Prioritise the first one, you should immediately settle loans with high interest rates. Cross it out when you are done, then proceed to the next until you reached the bottom of your list. Easier said than done.

How can you make this possible? Avoid making new loans or using your credit cards; pay in cash and make use of what you have in hand. Once you are done with the list, you can save up for retirement. If you aim for a more secured future, it’s time to start saving up and avoid unnecessary expenses.

Cutting down your credit card usage and extra expenses that you can live without can save you hundreds or even thousands of dollars annually which you can allocate for a retirement fund. Having a retirement fund is essential and it is best to plan for it ahead of time.

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Debt Management Personal Loans Short Term Loans

Growing Your Emergency Cash

Everyone should have an emergency cash fund. Having emergency cash available will give you a sense of financial security and it will stop you from running up your credit card bill whenever an unexpected cost springs up. An emergency cash fund should be set aside especially for accidents and emergency car repairs since these can seem to come out of nowhere and are never cheap. If you didn’t have any cash stashed up, you might have to opt for debt help and no one really wants to resort to that. You should start forming a bundle of extra cash immediately and build on it over time but also use it when you need to.

Saving for Emergency Cash

A short term goal for setting up emergency capital is a great way to get started. Look at saving a small sum like $300 to $500 over the coming weeks and months. Even if you can only shave off $30 to $50 a week from your normal cost it will only take a few short months to accumulate a good starter account. A reasonable goal that is attainable will make the first stage easier. After you have reached your first goal you can set higher amounts so that you have something to strive for but do not make your goal unreachable.

Shaving cost and saving up dollars can come from lots of places. If you have credit cards with a balance due then try and negotiate a lower rate with your lender or look into solutions for getting rid of that credit card debt faster and cheaper. A loan to pay off those credit cards can solve you high interest credit card problems.

Carpooling with work colleagues who live close by can help you save loads on petrol and car repairs over time. Your car and home insurance are big costs every year so look at competitors’ rates to see if you are getting the best deal and coverage for your money. A programmable thermostat can cost a little upfront and might only save a few cents a day but can be noticeable on your power bill each month.

If you have a grocery list it can save you time and money instead of going into the grocery store with a empty belly and a big empty cart. Eating at home is an obvious way to make your groceries save you money but also arranging to have only one outing a month instead of every Saturday night will keep your money in the bank. Having a roommate at home can also save on groceries and bills by splitting them each month.

Any or all of these tips can help save money each month and make it easy to build and maintain an emergency cash fund. Set that money aside in another account than your general savings account and it will make it easier to keep separated. Online banking can help you keep your accounts separated and make it more practical to have accounts at different banks so you are less likely to dip into your emergency cash when it is not an emergency.

Once you have the emergency cash fund up and running, just keep it growing. Build up to six months worth of living expenses and then focus on saving for retirement. An emergency fund is one of the most important parts of personal finance that you can start on today.

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Home Loans

Home Loans – Do’s And Don’ts

Finding suitable home loans for your needs is a tedious task. A lot of people say that purchasing the house you want to live in will be you single greatest expenditure. So it is important, especially to future lenders that they are well prepared in entering in to this kind of. No one likes getting rejected, especially when you’re applying to get the house of your dreams. To avoid this, here are some things that you should and should not do when applying for home loans. A little knowledge of how the home loans game works can get you to places.

Do’s and Don’ts of Home Loans

Do your homework. Research everything that has to do with home loans. Most consumers select the lender offering the lowest interest rate, oblivious to the myriad fees and charges that will be added onto the loan later. A low interest rate is important for any type of loan but you also need to know the extra fees like closing costs. So before you apply for a home loan, you should find out how much money you may be able to borrow and what the repayment terms are available for you.

See if there are errors in your credit file. Review everything that is in your credit file. Since the credit bureaus handle millions of files, the possibility for an error is not unheard of. You may find an error or two if you review your credit file at least once a year and then you can take steps to rectify those errors. Why is it important to fix these errors? Because it plays an essential role in the approval of a loan. It’s a record of your current debt and loans you have applied for. Therefore it serves as a reflection of a person’s credit worthiness. We all know how important a good credit rating can be when it comes to home loans or any kind of loan, it can be the difference.

Be ready with the required documents. Paperwork that reflects your employment, income, assets, liabilities and expenses. This includes your tax returns, pay slips, bank statements, credit reports and even your driver’s license

Decide what you can afford. Lenders will give you as much money as they are comfortable handing over, but will depend on your capability to pay it back. Evaluate your income and expenses. This should give you a basic idea of what you might be able to afford for a mortgage repayment every month.

Lastly the most important thing is to make sure that you are prepared to take responsibility of maintaining your new home. It may be a tedious process when looking for the best home loans. But if you do enough research and also speak with many different lenders, you can find out the best options for home loans. You can then compare and choose the right one that’s suitable for you.

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Debt Consolidation Credit Card Consolidation

Credit Card Debt Growing in Australians Aged Between 34 – 54

It is no surprise that Australian consumers between the ages of 34-54 have been cited as the biggest contributor to the near-record Australian national credit card debt. Half of the surveyed group named as Generation X which comprised of 1200 Australians admitted that they made up to three unplanned purchases using their credit cards each month. The research also showed that Generation X Australians are the least likely to pay off their credit card purchases in full each month. The effects of this is evident in the $51 Billion credit card debt in Australia, $33 billion of which is accruing interest, costing consumers more than $540 million a month. That is a whole lot of money being wasted on interest charges and the individual debt contributing to the national debt on credit cards.

The credit card debt growth in majority of Generation X is growing at an alarming rate. More and more Gen X Aussies are racking up credit card debt and not making regular repayments. In the end they get bad credit ratings and the only viable solution is debt consolidation. This process can help eradicate bad debts and in the long run increase credit rating. It is clear that Australians need help in order to stay financially stable. Although this sounds like a dire situation there is hope; there are a lot of consolidation companies who can help re-align finances.

Credit Card Debt in Gen X

Generation X probably has the most number of financially troubled people in it. It may be because of the financial burden they carry on their credit card debt. This is in fact the age group where credit card use has been most rampant and has done so irresponsibly too. This is also the group that is currently in extreme need of debt consolidation loans. Why opt for debt consolidation? Because new loans may result in a lower interest rate which means lower payment on your part. This also means it will be easier to pay off old debts and repair credit rating in the process. Getting a debt consolidation loan is where you will take out a new loan to pay off a number of other debts you have made in the past. It is undoubtedly a good solution to a bad credit problem. The process may be a little confusing so it is best to seek the help of professionals who have extensive experience in help out people with bad debts, especially credit card debt.

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First Home Buyer News

Should you access superannuation for buying a house?

It is every young family’s dream to buy a house to make into a home but with rising property prices, it is becoming more difficult for first home buyers to enter the market. A young family might not have much in the way of savings and it can seem impossible to come up with the minimum amount needed for a deposit on a mortgage. The Australian government, under Treasurer Joe Hockey’s suggestion, is considering letting people access their superannuation account for the purpose of putting that money towards buying a house.

Superannuation for a new home

The retirement funds are generally not allowed to be accessed until a person is the age of 60 but the federal government is taking a lead from other countries such as Switzerland, Canada and Singapore and thinking of letting people dip into their retirement funds early to invest into a home. The idea has gotten a lot of backlash from the opposition government and it probably should. Although the money is for that person to spend however they want, it also serves as a safety net to make sure that people can afford their needs when they get older. Instead of having the capital being held by the government at a secure interest rate and knowing it will be there in the future, it might soon be possible to take a risk and use some of that money in the real estate market.

The proposal hopes to have several positive and negative effects. Getting young families into homes is a major goal of the current administration. But the goal also includes letting people become more self-reliant and less dependent on the superannuation scheme. The 5% taken out of Australians’ pay cheques is usually something that all Australians are looking forward to one day. However there is a possibility that many will not have as much as they might have had when it comes time to enjoy their golden years if this proposal gets approved.

The access to retirement funds might just fuel home prices higher and have a muted effect on making homes more affordable. Any large decision like buying a home is already big enough and maybe it is not the best decision to risk your superannuation funds on the volatile property market. There are many ways to get the loans needed for a mortgage and with the current low interest rates it could be wiser to leave your superannuation alone and buy a house the old fashioned way.

The old fashioned way being; acquiring a home loan or a debt consolidation loan from a trusted bank or a trusted lender, usually at a more competitive rate. Speak to a financial consultant about the right type of loan for you and your family to buy a new home.

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Debt Consolidation

Consolidating debt can help you save big

If credit card bills are stacking up and the interest rates are making it impossible to ever think of being clear of debt then it is time to act. Interest rates on credit cards have been stable at a high rate, making a relatively small credit card balance to quickly escalate out of control. If you have a few credit cards and they all have balances due, then it would probably be best to roll them all together and consolidate the debt at a lower rate so that it becomes more manageable. There are a few ways to get all of the debt under one loan so that the payments can be made on the entire debt in one monthly payment but you can also get the added benefit of having lower cost so that you are able to get the whole thing paid off.

Consolidating debt in different ways

Personal loans

Gathering all of the debt into a personal loan is a good option. The interest rate will be lower than the credit card companies’ interest rates so the balance will not continue to grow at such a fast pace. The personal loan route will break the entire loan up into a set repayment term so that at the end of the loan period the entire loan will be paid off so you can start over with a clean slate.

Mortgage refinance

If you have a mortgage already and have equity in your home, a great way of consolidating debt is to combine your credit card debts into your mortgage. All your credit card debts will be consolidated into a lower rate. Since mortgage rates are usually lower than credit card interest rates, you can have all of the debt repaid as you pay off your mortgage.

Credit card consolidation

Taking all of the different credit cards and placing their balances into one credit card with a no interest period is also a great way to stop the growing interest for a certain period for you to get ahold of the debts before it gets farther out of hand. The aim with this route is to have the entire balance paid off before the interest free period is over.

Consolidating debt from many different accounts is the best way to stop or slow the interest rates from compounding the debts until it is too large to handle. There are several ways of handling debt from getting out of hand and it pays to look into the different options in consolidating debt and choosing what works for you.

So speak to a financial specialist about debt consolidation so you can save big while you pay off your debts.