Tag: debt relief

Categories
Debt Management Financial Fitness Tax Debt Loans & Relief

Debt Reduction: How to Stop Spending Impulsively

debt reduction strategies include budgeting||personal loans||debt management

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.

Categories
Debt Management Credit Card Consolidation Financial Fitness

Strategies For Getting Your Credit Cards Under Control

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.

Categories
Debt Management Financial Fitness

Debt Relief Tips For Smart Borrowers

Debt Relief Tips For Smart Borrowers
Debt Relief Tips For Smart Borrowers

Are your finances stuck in a rut? Are you wondering how are you ever going to get yourself out of this frustrating financial state? Fortunately, there are debt relief strategies that can help you get your finances in order and get you back on the road to financial freedom.

Debt relief tips to stay ahead

Take a day off to clear your head

Sometimes it can just get all too much. We are only human. A clouded mind won’t help you make smart financial decisions. Take some time off to relax. Find a park, a waterfall, cafe or your happy place. Spend some time clearing your mind. Log out of Facebook, put your phone on aeroplane mode and whatever you do; don’t look at your bank account!

  • Debt Relief Tips For Smart Borrowers
  • Debt Relief Tips For Smart Borrowers

Reflection can help to clear your mind and allow you to rethink about your finances in a more positive light. Take a notepad and write down your thoughts about debt. Evaluate your financial decisions and create a list of short term and long term goals. Whilst it may seem difficult to take time off, especially in a tough financial state; it may actually do you the world of good.  It can also help you gain a realistic perspective of your current financial concerns and fears.

Write down your assets, liabilities, and other pressing concerns surrounding your finances

A great debt relief tip is to document your financial state. If you are married or living with a partner, writing down all your financial issues can help you talk about sensitive financial issues without getting into a lengthy argument. Prepare the bills; write them down one by one-including their interests, due dates, late charges and other matters that need attention. Then, create a budget together-or propose one if the other spouse or partner is not so into budgeting. Exchange opinions on the matter and work on a budget that would fit both of your lifestyle and financial goals. Budgeting tools are available online. They help you keep track of your finances and better manage your cash flow.

Evaluate your financial plans

How do you want to live? It’s a no brainer that no one wants to live from paycheck to paycheck or end up in a multitude pile of debt. That’s why debt relief solutions are so tempting for borrowers. But before you seek debt relief, do some brainstorming to get a clearer perspective of what you want to achieve in life. Make specific plans for reaching your goals.

Look for alternative ways of paying off your debt

In theory, the answer to debt relief is pretty straightforward. The more money you put towards your debt, the quicker you will pay it off. Whilst budgeting can help you pay off your debt more effectively; you need to have the cash flow to pay it off. In today’s tech-driven society, it has never been so easy to make an additional income.

With services such as Uber Eats, Airtasker, Gumtree, and eBay; anyone can make extra cash. You can deliver food via Uber eats, build a flatpack from IKEA for someone or sell your PlayStation on gumtree for cash. Now, this is by no means the “Easy” way out. You need to be determined and motivated to work hard. The extra cash, however, can be extremely useful in quickly relieving your debt.

  • sell clothes on ebay
  • Uber eats delivery person earning extra cash

Stop creating more debt

Whilst this debt relief strategy won’t necessarily get you out of debt, it will ensure that you are not piling on more debt. Adding on more debt to your existing debt will only make you worse off. So if you are tempted to add another credit card to help pay off your bills; don’t! Rather than securing more credit, freeze your card or cut it up.

  • stop creating more debt and cut up your credit cards
    stop creating more debt and cut up your credit cards
  • stop unnecessary spending
    stop unnecessary spending

Compare debt relief solutions and choose one that best suits your financial situation

Debt relief solutions may assist in giving you that extra boost to get things rolling. Alternative lending agencies such as the Australian Lending Centre offers a variety of debt relief options. These debt relief options include;

Debt consolidation

You can combine all your existing loans into one big loan. This way, you can lower the interest rates; get affordable terms and easy-to-manage monthly repayment plan.

Mortgage Refinancing

Repay your current home loan using new or second mortgage to enjoy lower interest rates, a favorable term, or a lower monthly payment.

Debt Agreement

Try negotiating with your creditors to reduce your debts. Who knows? Maybe they can forgive some of the penalties to make your payment manageable. ALC also negotiates a favourable agreement with your creditors or loan providers to reduce your debt or make your payment requirement more affordable so you can quickly repay your debts.

Credit card debt relief

Consolidate credit card debts to save on penalties and interest rates. ALC’s credit card relief program allows you to pay off high-interest credit card debts and transfer the loan amount to another low-interest loan or credit card.

Debt relief is achievable. You need to be determined to get your finances in check. Fortunately for you, there are a plethora of services that are available at your disposal. With smart budgeting, determination and a clear mind you can quickly regain control of your finances.

Categories
News Debt Consolidation Debt Management Financial Fitness Financial Planning

Fast Loans and the Fastest Ways to Repay Them

Fast way to pay back fast loan||||Close credit cards||"Paying your loan back faster"||Empty shopping cart to save money||

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.

Warning About Borrowing

Contact Australian Lending Centre to get back on track. 

Categories
Debt Consolidation Financial Fitness

When your credit file is filled with unpaid defaults

unpaid defaults can be fixed

In this article, we discuss ways to repair your credit rating through removing unpaid defaults. Are you experiencing financial hardship? Is this leading to unpaid defaults? You are not alone.

Identify the reasons why you have unpaid defaults

Understand that life happens and sometimes, you have to deal with some financial setbacks. Loss of employment, illness and relationship breakdowns may make repayments difficult. On other instances, it could be as simple as poor bookkeeping practices, not keeping your receipts, moving to another address or data entry issue son the part of your credit provider. But, whatever the reasons are, don’t let it deter you from pushing for a stellar credit rating.

Remember that creditors report that you’re on default when you are 60 days late with your monthly payment. It will serve as a warning to potential creditors that you have defaulted on your obligations and that you could do it all over again with another lender. Understand that paying off the unpaid defaults does not necessarily mean that you can erase those entries from your credit file. They will stay there for years. But, if you don’t pay them off, it could be worst.

Clean up your credit file

The best way to do this is to simply update your payments. If you have multiple credit card debts, and other consumer debts—you may think about debt consolidation. You can get a new loan to pay off all your debts. By doing this, you can reduce your monthly payments, possibly reduce the overall cost of the loan and simplify your payment. It could help you build up your credit again, not only by reducing your debts but by making it easier for you to pay on time.

By fixing your impaired credit file it would not only become easy to obtain finance but cleaning up your credit file can also give you a wider range of lending options. Remember that lenders approve clients based on their borrowing capacity. This does not only refer to their ability to repay the debts but on their credit score as well. You may also qualify for low-cost loans which may not be possible if you have a poor credit score unless you opt for specialized lenders who provide affordable loan products for bad credit borrowers.  Of course, the interest you pay on a loan would dramatically decrease as well.

Request a copy of your credit file

You can request a free copy of your credit file from the major credit bureaus in the country. Check them for errors, and if you see inconsistencies or inaccuracies. Sometimes unpaid defaults on your file are a consequence of an error made out of your control. You can file a dispute at the credit agency involved. Or, you may also file a complaint with your credit providers and ask them to update the report.  Sometimes, there are unjust listings or mistakes due to human error. So, make it a habit to ask for a copy of your credit file each year so you can easily contact the creditor concerned and talk over the issues with them. While it is possible to directly file a dispute with the reporting agency, they will not remove the negative entry without the approval of the creditor, or at least a valid proof that the entry is erroneous or inaccurate. There are also credit repair specialists that remove defaults on your credit file.

Consolidate your loans

You can apply for a second mortgage to consolidate all your high-interest loans into a single easy-to pay loan. By rolling all your debts into one—you could enjoy the benefit of saving money on unpaid interests and late fees. IT is also a lot easier to remember because you only have one due date to recall each month.

If you’re still unsure whether you could make timely payments because of your busy schedule—you can automate payments to ensure that you can pay on time. This will not only clear up your old debts and help you start with a clean slate—but debt consolidation can also help you rebuild your credit score fast your potential lenders would also see the improvement on your borrowing habits and you are most likely to qualify for low-interest and bigger loans in the near future.

Develop good financial habits to prevent unpaid defaults

After you understand the importance of paying off your debts, it may be time to look for the best financial product when you need them. Look for specialised lenders that offer accessible and affordable loans when you are finding some difficulty in managing personal finances because of cash flow shortage due to emergency situations. Afterwards, make it a habit to check on your budget and make some adjustments in order to save more and spend less son a day to day basis.

By sticking to your budget, you can stretch out your dollars and avoid debts. Budgeting is important not only for the low-income earners but to high-income earners as well. It is important to make the most of your incoming savings so you have some money to tap into when emergency situations like car repairs, urgent home renovation hospitalisation arise. By doing so, you can avoid being chased down by debt collectors for your unpaid defaults and you don’t have to rely so much on another loan to bail you out.

Categories
Debt Consolidation

Tips on How to Qualify for a Debt Consolidation Loan

Qualifying 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.

Categories
News

Factors to Consider before Signing a Debt Agreement

Part 9 Debt Agreement||Debt Agreement||part 9 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!

Categories
News

Variable-Based Tips On How To Manage Your Debt

no credit check loans australia||how to manage your debt||how to manage 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!

Categories
Debt Management

The Wrong Ways to Pay Off Your Debt

debt consolidation||debt consolidation loan||Debt Consolidation

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

Categories
Debt Consolidation

When Is a Debt Consolidation Loan Feasible?

debt consolidation loan||debt consolidation loan||Debt Consolidation

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.

Save

Categories
Debt Management

Tips for Erasing Debt

Tips for Erasing Debt
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

Categories
Debt Consolidation

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

Debt Consolidation Loans

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.

Categories
Debt Consolidation

Are You Falling for these Debt Consolidation Traps?

debt consolidation loan

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

Ignoring the cause of your debt problems.

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

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

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

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

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

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

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

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

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

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

Thinking that you are finally out of debt.

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

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

Call us today!

Categories
Debt Management

Tips to Avoid Debt this Christmas

Money Management Tips

Every year the Christmas holidays could be considered as the most expensive shopping season. That is because consumers usually spend so much during this period as giving gifts has been synonymous to the spirit of the season all across the globe. Of course, buying presents come with specific price tags.

Are you ready to once again spend a fortune this Christmas? You do not have to, if you would be more frugal to manage your money this holiday season. Do not spend way beyond your budget set for Christmas shopping. Otherwise, you may end up accumulating more debt that you would take care to repay months after the season. Here are five ideas on how to manage your money this Christmas holiday season so you would not end up being in debt.

Continue reading “Tips to Avoid Debt this Christmas”
Categories
News

Budget Good News for Struggling Working Families

bad credit loans australia guaranteed approval

The new Budget signals a sigh of relief for Australian families struggling to meet costs, as Treasurer Swan discerned “This is a budget which tips the scale back in favour of Australian families”.

The Government has released its first Labor budget in over a decade, which will cut taxes and promote health, education and infrastructure. This is good news for working families and struggling working families and the lower income earners, while reductions to harness inflation will be aimed at the higher income earners of the Nation.

Continue reading “Budget Good News for Struggling Working Families”