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medical loans Tips

How to Pay Medical Bills When You’re in Debt – 6 Solutions

It’s costly to be sick, and patients in debt are particularly vulnerable. Despite the government’s efforts to promote healthy workers, healthy eating, and active living, illnesses still arise, and more often than not, people aren’t financially ready for them.

This blog explains how you can afford to pay medical bills when you’re in debt. We also discuss how different types of employment can impact your circumstances when you become ill.

How Employment Impacts Your Ability to Pay Medical Bills

Casual Employees

Would you rather go to work while sick or risk being unpaid and potentially losing your job? Many casual employees face this dilemma, often dragging themselves to work despite their illness because they can’t afford to call in sick.

Without sick pay benefits, casual or contract workers might be forced to ignore their doctor’s advice and report to work. It’s not uncommon to hear of individuals suffering through injuries or illnesses just to secure their wages.

How Employment Impacts Your Ability to Pay Medical Bills

Salaried Employees

Although Australian law requires employers to provide their employees with sick leave benefits, the allotted days may not always be sufficient for a full recovery.

As a result, some employees feel pressured to return to work prematurely after exhausting their statutory sick leave, which can compromise their health and lead to more time off in the future.

Some people don’t even apply for sick leave if they know their company is restructuring, cutting costs, and firing employees.

Self-Employed

The concept of “sick pay” doesn’t exist for self-employed individuals. Falling ill can be catastrophic if your business relies on your physical presence to generate income.

The absence of a safety net makes it crucial for self-employed people to carefully manage their health and finances.

Does it Help to Have Health Insurance?

While Medicare provides access to free hospital treatment and subsidises out-of-hospital medical care, you may still face out-of-pocket expenses if you need elective surgery.

Paying for private health insurance from companies such as Medibank, Australian Unity, HCF, and HBF can be helpful in the long run. However, private health insurance comes with excess fees. Additionally, not all insurance plans cover every incident, so it’s important to thoroughly read the fine print before committing to a policy.

The most common health insurance coverages include Lifetime Health Coverage, the Medicare Levy Surcharge, and the Private Health Insurance Rebate. Despite these options, there are occasions when insurance coverage falls short, leaving you with additional costs.

6 Solutions to Pay Medical Bills When You’re in Debt

Medical bills can be overwhelming, especially if you’re already struggling with debt. Here are 6 strategies to help you manage and pay off medical bills without worsening your financial situation.

1. Negotiate with Healthcare Providers

  • Keep an Eye Out for promotions: Sign-up deals for customers for new customers are always being offered. Check out the latest promos here.
  • Ask for Discounts: Many healthcare providers offer discounts for uninsured patients or those facing financial hardship. Don’t hesitate to ask for a reduction in your bill.
  • Set Up a Payment Plan: Arrange a manageable payment plan with your healthcare provider. This can spread the cost over several months, making it easier to handle.
  • Request Itemised Bills: Ensure all charges are accurate by asking for an itemised bill. Sometimes, errors or unnecessary charges can be identified and removed.
Negotiate with Healthcare Providers

2. Negotiate employment terms before signing a contract

  • Highlight Any Pre-Existing Health Issues: Disclose any pre-existing health conditions when negotiating employment terms. This can help ensure you receive the necessary support and accommodations. It can also be a crucial factor when considering health insurance options provided by the employer.
  • Plan carefully if you are Casual or Self-Employed: Without the safety net of sick leave or employer-provided health insurance, it’s vital to take the extra steps to plan for potential health issues. Consider purchasing individual health insurance, setting aside emergency funds, and exploring income protection insurance to safeguard against periods when you might be unable to work due to illness.

3. Explore Financial Assistance Programs

5. Consider Medical Credit Cards or Loans

  • Medical Credit Cards: Some providers offer credit cards specifically for medical expenses. These often come with interest-free periods for as long as 18 months. But be cautious of high interest rates if you can’t pay off the balance in time.
  • Personal Loans: If your credit is good, you might qualify for a personal loan with a lower interest rate than your current debt. Use this loan to pay off medical bills and consolidate existing debt.

6. Crowdfunding

7. Debt Consolidation

  • Consolidate Debt: Consider a debt consolidation loan if you have multiple debts, including medical bills. This combines all your debts into a single loan with one monthly payment, potentially at a lower interest rate.
Your Solution to pay medical bills when you're in debt

Your Solution

Medical bills are often out of our control, so being in debt at the same time can feel crippling. With the 6 tips above, we hope to have given some insight into some solutions to pay medical bills when you’re in debt.

Whether you take advantage of health insurance promos, get a medical loan or benefit from crowdfunding, there are options out there. You just have to know where to look.

If you would like to receive help in the form of a medical loan, complete an online application with Australian Lending Centre here.

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Debt Management

Poor Habits that Lead to Debt

There are a number of poor habits that lead to debt. Have you ever wondered why some people are deeply buried in credit card debt and debt in general while others have clean credit records, despite being on the same economic level? Wealthy and poor people exist side by side and sometimes even the same paycheque and personal situations.

Of course, some people have certain advantages over the rest, especially those who have been born with a silver spoon, or those with better opportunities because of their status and connections. There are also individuals who weather financial storms despite their difficult financial situations an emerged successful because of excellent financial habits. But underlying issues that lead you into deep waster start with poor habits that lead to debt.

What are the poor habits that lead to debt?

Here are habits that can be responsible for huge credit card debt, regardless of the amount of your paycheque or personal situations.

Not using your time wisely

Do you realize the time value of money and its impact on your finances? Procrastination, staying idly and not making full use of your 24/7 body clock deprives you of huge opportunities to earn money. You don’t have to work round the clock. In fact, you can make your assets work for you. It’s not just the money-but your skills and creativity can be put to good use.

The Pareto principle states that the thing you do with 20% of your time in a day produces the biggest chunk of your wealth. While it may not apply in all situations, particularly if you are working in a 9 to 5 job, this theory could encourage you to maximize the use of your time.

For example, if you have an online business, it is important to identify your biggest customers and to devote your time in engaging them; and the people with the same demographics. Full-time employees can set a certain period of time in a day to evaluate their productivity and to evaluate their recent knowledge and skills that they can utilize for self-improvement. With less income, you may be tempted to use your credit card to meet your monthly debt repayments and personal needs.

Taking too much that you can handle

While many people thrive with multi-tasking, it can actually lower concentration and the quality of work. Less work done could mean less income. Instead of doing this, you can set a schedule for a specific task; complete it within your allotted period and proceed to the next task.

Let us say you are engaged in small business and you have been doing the books, management and overseeing the productions and marketing. If you don’t have a planner or an app that would remind you every now and then, you may find it difficult to keep up with the demands of your business. You can also hire people to do the work for you. While it may denote additional cost because you have to pay wages, consider it as additional working capital which could yield greater returns in the long run.

The same principle applies to debt; you may think that your income can shoulder the monthly repayments for your credit card debts and other existing loans. But, if your debt takes up more than 30% of your income, and you have no emergency savings fund; it may be difficult to keep up with the payments on time when accidents and other similar situations occur. And more, people who have been handling various types of debt may default on payments simply because there are multiple debts that they need to pay in a month.

Complicated payments may create poor habits that lead to debt

With so many due dates to consider, how can you possibly remember each of them and the interest rates as well as penalty charge they represent?

It is important to choose the right financing opportunity that could help you settle your dilemma on finances. Instead of using your credit cards at the same time, consider other financing options that could help you save more money in the process.

Choosing the safe side

There is nothing wrong with staying in your comfort zone. In fact, most people thrive in a place where they are most comfortable. However, there are times that you need to take a leap of faith to pursue a passion or a new business endeavour that could open windows of opportunities for growth.  It doesn’t have to be a drastic change. Sometimes, a simple adjustment is all it takes to open a new door for improvement, higher pay and a better lifestyle. A sound budgeting plan may be the key to helping you manage your expenses.

Credit card warning signs

Let’s say that you have been using your credit cards to make daily purchases because it is convenient for you and you can keep records of your spending. But, charging your daily expense on your future income may not be a very smart move because in the end, you will be paying interest on an item that you can just pay with cash. This year, it may be time to start bringing your wallet and coin purse. Bring out those loose change and you may be able to save more money shopping.

On another note, those who have been paying their bills on a cash basis can opt for automated payments. There are safety measures that you can discuss with your credit provider to ensure that all your payment transactions are safe.

Automated payments

If your habits put you in financial troubles, it may be time to change them. You are responsible for your financial success. Desire it and set a good plan of action; simply keep moving until your credit card debt and other loans are fully paid and you achieved the income level you desire.

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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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Fast Loans

Discover The Fastest Ways to Repay Loans

Paying your loans off in small amounts can be easier on the wallet in the short term, but in the long run, you’ll end up spending more and being burdened with debt for longer.

Learn the fastest ways to repay loans below and reap the benefits!

Here are some tips for paying back your loan faster

1. Pay more

If you can afford it, make larger monthly payments to pay off the principal more quickly.

For example, a $2500 fast loan with 6.8 % interest and a 10-year payback period would cost $28.8 a month. Making $70 monthly payments 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 less on interest.

2. Make additional payments

The less you owe, the less interest that you will be charged. By budgeting effectively or receiving a bonus from work, you may be able to make additional payments to your fast loan.

3. Create a clear plan

Creating a clear plan is one of the simplest and fastest ways to repay loans.

  1. Start by understanding exactly when your loans will end or if it’s a credit card, then check the current balance.
  2. Next, create a goal to pay it off within a specific period of time. You’ll need to understand exactly how much money to put aside each week to achieve this.
  3. Commit to your plan and you’ll have a clear pathway to becoming debt free ahead.

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 to save extra cash. Rather than spending money on trivial things such as movie tickets or unhealthy meals, automatic payments can help you set aside that extra cash to pay off your debt. 

Make sure you will only use that account to repay your fast loans and other types of debt. This will require sacrifice in certain areas, but it will ensure you are one step closer to financial freedom.

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 in 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 in annual savings.

At the Australian Lending Centre, we can clear debt management plans to help you move towards 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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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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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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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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News Debt Management

Many Australians Are Turning to Debt Agreements

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

Why So Many Australians Are Turning to Debt Agreements

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

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

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

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

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

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Financial Planning

Making Sense of Australia’s Comprehensive Credit Reporting

Understanding Bad Credit with Australia’s new Comprehensive Credit Reporting

Australia’s new comprehensive credit reporting system came into effect from March 12 this year and has changed the manner in which some lenders look at risks when accepting new clients.

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Debt Management

What is the Impact of Becoming Bankrupt?

Bankruptcy does not last forever. Usually, its protection lasts only a year. During the period, the individual’s financial affairs will be put under restriction. That means there are certain privileges that the bankrupt person may not possibly enjoy even after bankruptcy has been lifted. Discover the impact of bankruptcy here in this article.

Furthermore, being bankrupt is not a guarantee that a person will be totally free from any financial obligation. In many cases, the individual is still required to pay a certain amount to repay debts from creditors following an assessment of current inflow and outflow of income. The repayment scheme under bankruptcy may continue even after the individual is discharged from the provision.

Needless to say, bankruptcy brings about serious implications. Its impact can never be underestimated and overlooked. Aside from the embarrassment and eroded self-esteem, an individual can face the greatest setback in his financial aspect.

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Financial Planning

How Can Financial Distress Impact Your Health

The stress caused by the economic downturns and financial shortcomings can literally make you sick. This is quite logical. In the recent global economic downturn, many evidences were recorded linking financial distress to various health conditions. That link is not surprising.

In 2005, a research was conducted in the US to identify possible health implications of financial distress. That study explored specific health effects that are often and logically associated with financial problems. It surveyed random individuals from across the country.

The results showed that there are various perceived possible effects of financial stress on both physical and mental health. Financial problems and poor health are associated. Stress is the main health impact of job loss, piling debts, loan defaults, and budget shortages. From there, many other health conditions can possibly ensue.

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Financial Planning

How to Financially Deal with a Job Loss

With the previous spates of job layoffs amid the economic crisis, everyone logically feels nervous about possibly getting in debt and running out of cash. These are interesting times and all of us should focus just on the positive. Stay productive and resourceful especially when dealing with your finances.

Job loss could be inevitable. No one could be spared once the financial crisis bites on companies. That is why you should be prepared for the unexpected. It is important to know how to cope with a possible crisis. You could cope with the loss of your income if you would observe the following tips.

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Debt Management

Dealing with Retirement Debt

To many of us, retirement is the time when we would just have to sit back, relax, and enjoy the fruits of our hard labour. It is ideal that when retirement age comes, you should just be living comfortably in your retirement house, not thinking of any stress. It is worth thinking about managing debt before going into retirement.

But things could be complicated along the way. Before you know it, you could already have accumulated too much debt in your pre-retirement years. By the time you retire, you could still be servicing some or most of those debts. So how should you deal with debt when you get to your retirement age? Here are some ideas.

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Tips

Christmas Shopping – Common Spending Habits

Christmas is undoubtedly a season for shopping. The spirit of the occasion is indeed in gift-giving. You may have to shop for all the presents you intend to give away. At the same time, you may want to shop for yourself and for your household.

It is not surprising that many consumers tend to overspend during Christmas shopping. That is because malls and retailers are doing their best to entice you to spend. Your shopping mood could be set on fire by the festive decorations. The special markdown sales and new items on the display could further persuade you to buy until you drop.

Are you ready to once again hear the cash register ring for your Christmas shopping? There are many tips you should first look at and observe. Here is a simple and practical list of the do’s and the don’ts when shopping for the season.

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Financial Planning

Calculating your Net Worth

Your net worth could be an effective indicator of your financial condition. It could measure your annual progress financially. In general, the net worth is the overall sum of all your current assets or properties minus the sum of all your liabilities. This way, you could instantly and clearly see if your assets are still bigger compared to your liabilities, which is the ideal scenario.

Calculate your net worth to determine your current personal financial performance. Do not worry if you think you would obtain a negative figure. Instead, be positive about it and set effective goals to emerge out from the situation. It would surely be helpful and more advantageous if you knew your present financial condition. Furthermore, computing net worth is not as difficult as you think it is.

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Debt Management

Tips to Avoid Debt this Christmas

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.

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Credit Card Consolidation

Australia’s Credit Card Debt – What to Know

Australian consumers are now more cautious about their spending. They are now more inclined to increase their savings and clean up their credit card debts. This observation is according to financial experts from Bendigo & Adelaide Bank. They added that local households are now aiming to put their finances in better order due to the uncertainty about global economy especially after recent reports about credit woes in the US.
Australia’s credit card debt is proving to be interesting and conflicting.

Categories
Debt Management

How to Avoid a Default

It is a mortal sin for every loan borrower to fall into a default. That is because doing so would lead to bigger trouble. If you default on a loan, your loan provider may take various types of action, which might all be disadvantageous to you. First, you may face the burden of litigation. Second, you may be imposed with more penalties. Third, your collateral might be repossessed. And lastly, your credit history would surely be eroded.

Categories
Debt Management

Australian Household Debt Increasing

According to the latest household debt information from the Australian Bureau of Statistics, average debt for each household is now at $50,500. It is up to 34% higher compared to the household debt average on the preceding report. This clearly indicates that household debt across the country continues to rise.

It is sad to note that debt has now become a part of living. Needless to say, it contributes to daily stress in the lives of numerous Australians. It even affects overall health and happiness. To be able to fully understand rising household debt so that proper strategies could be employed to control it, there is a need to analyse the possible causes.

Categories
Financial Planning

Australian Borrowers Cautioned to Curb Spending

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

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

Categories
Debt Management

Reduce Your Debt in 2010

The end of the year is here again, and after a year of financial turmoil, now would be a good time to stop and take some time to reflect on how you spent your money this past year.  December is always a great time of year to create financial goals so you can begin them early in the New Year.  By setting yourself goals they serve as a motivational tool throughout the year to strive toward a better financial future and reducing your debts.

Click on ‘read more’  for some helpful hints to better manage your debts:

Categories
Financial Planning

The Cost of Raising a Child is now $1 Million

The cost of raising children to 18 has hit the million dollar mark research suggests.  In comparison to the days where children where entertained more simply, parents are now finding themselves forking out for expensive toys, the latest technologies and private lessons for dance, sport, music and schooling.

Considering the average child now stays at home until the age of about 24 the real cost to the Australian parent of raising children is said to be roughly $1,028,093.

Generation Z, (those born from 1995), are the most financially endowed generation of children ever.  Every child has their own set of everything. They are definitely not in the era of shared toys or hand-me-downs.

Categories
Refinance and Refinancing

Sub-Prime Crisis Heralds New Age of Debt

The Sub-Prime crisis is sending the international property market into recession, with property values falling significantly. However surprisingly, the Australian property market continues to rise. How long until Australia follows suit?

Australian property prices compared with income levels are the highest in the world. Our endless mortgage repayments continue, reflecting this dire need to fulfil the Great Australian Dream of owning our own property. Although as interest rates continue to rapidly ascend, we may be heading towards a crash.

Categories
Debt Management

The Unstoppable Australian Debt with No Solution In Sight

It is becoming alarmingly apparent that more and more Australians nationwide are falling into the household debt. With ever-increasing interest rates, mortgage repayments are becoming unmanageable and daily living costs are soaring.

Managing Director of the Australian Lending Centre, Chris Riotto, asserts, “We are receiving an influx of customers who just can’t afford to sustain their increasing mortgage repayments and keep up with household costs.Although these people initially had sufficient incomes to meet their repayments, because inflation is now increasing to an unmanageable point, they are now finding it virtually impossible to stretch their incomes enough to make ends meet.”

Categories
News

Celebrity Lifestyles Create Debt for Young Australians

Many Australians, especially the younger generations are obsessed with celebrity image, and pressure to keep up with the ever-changing style of the stars is driving an annual $8.7 billion credit card spending spree. The modern day cult of celebrity is now so pervasive that young men and women alike are racking up expensive credit card debts to copy the looks and lifestyles of the rich and famous. Matching celebrity lifestyles is creating debt for young Australians at an astounding rate!

A recent study conducted on the rise of celebrity culture in Australia, reveals that almost 90% of young Aussie woman feel that they are expected to match the idealised images and designer wardrobes of the celebrities. This isn’t really surprising when you consider that celebrities are found on every source of media, not to mention they can be intimately followed by the likes of reality television series and social networking sites such as Facebook and Twitter.

The biggest culprit of this obsession is women aged 18-34 years. Two in three women admit to using their credit cards to purchase items to mimic celebrity style. This dangerous fascination is leading to many Aussies maxing out their credit cards by spending thousands of dollars a year on clothes, accessories, hairstyles and beauty treatments popularised by the stars.

However it’s not only the women, nearly half of Aussie blokes aged 18-34 years admit to being influenced by the style of Hollywood’s leading men. Aussie men have also admitted to purchasing clothes, beauty products and even sports cars to emulate a celebrity lifestyle.

Celebrity Endorsed Debt for Young Australians

Both men and women are likely to buy the never-ending ranges of celebrity endorsed products, whether it is a celebrity promoting a company’s product or the product itself is owned by a celebrity. Just look at all of the celebrity fragrances on the market as one example.

Many young Aussies are none the wiser of the repercussions their spending habits could have on their future. Not only are they setting themselves up for years of debt and interest repayments, they are also potentially facing bankruptcy. Bankruptcy is the worst financial result to any individual’s life. By filing for bankruptcy you have instantly put yourself in a position of uncertainty, as it can negatively affect so much of your financial freedom.

Limitations of bankruptcy

If you are bankrupt, you cannot hold certain licenses, there are restrictions on employment, and you may be required to pay part of your income to a Trustee. You also must obtain the Trustee’s permission to travel overseas, some of your divisible property may be sold and any divisible property you acquire during bankruptcy, vests in your Trustee. Also when you are bankrupt you are limited to obtaining loans and credit.

Manage your debt

It is important to get a hold of your finances before they become too difficult to manage. Many young Aussie is excited by their ability to use their first credit card, and they can easily forget that every payment needs to be repaid, and due to interest you usually end up paying more for the item as a result of placing it on your credit card. Credit cards should be used as a tool for purchases such as airfares and for emergencies. You should intend to make the repayments in full as soon as possible to avoid accruing interest charges. If you find that you need to make everyday purchases such as groceries or petrol on your credit card because you lack the funds to purchase these items from your income, then you could be heading for a trouble-filled financial future.

If you are finding it difficult to make your debt repayments on credit cards or personal loans then you should speak with one of our experienced debt consultants today.