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Debt Consolidation Credit Card Consolidation Debt Management

How Long Does Debt Consolidation Stay On Your Credit Report?

How Long Does Debt Consolidation Stay On Your Credit Report
How long does debt consolidation stay on your credit report in Australia?

How Long Does Debt Consolidation Stay On Your Credit Report?

When you’re dealing with multiple debts, consolidating them into one manageable repayment can feel like a huge relief. But a common question many Australians ask is:

“How long will this stay on my credit report?”

The answer depends on the type of debt, the lender reporting process, and whether any defaults or late payments were involved before or during consolidation.

In this guide, we break down what you can expect and how to protect your credit score during the process.

How Debt Consolidation Affects Your Credit Report

 

Debt consolidation itself isn’t automatically a negative mark. In fact, it can help improve your financial profile over time. However, the initial steps, such as the credit enquiry or visible changes to loan structure, do appear on your report.

What Lenders See On Your Report

When you consolidate debt:

Old accounts may show as closed

A new loan may appear to cover previous balances

Your credit utilisation (how much credit you’ve used vs limit) can improve

Your repayment behaviour becomes easier to track

Over time, consistent repayments on one loan can make your credit report look far stronger than multiple messy accounts.

When Consolidation Can Help Your Credit Score

Debt consolidation can work in your favour if it helps you:

Make payments on time

Reduce overall interest costs

Avoid missed payments or collections

Pay down balances faster

This consistent behaviour can lead to a positive score increase within just a few months.

When Consolidation Could Hurt Your Score

In some situations, your score may dip temporarily, especially if:

You continue to use old credit cards and build new debt

You apply for multiple loans during the approval process

You miss repayments on the consolidation loan

Remember: consolidating only works if it reshapes spending habits and creates forward progress.

How To Speed Up Credit Score Recovery

Here are a few simple steps that can make a big difference:

  1. Automate your repayments to avoid accidental late payments

  2. Keep your credit utilisation low  ideally under 30% of your available limit

  3. Limit new credit enquiries while repaying consolidation debt

  4. Regularly check your credit report for incorrect listings

  5. Close or reduce limits on credit cards you no longer need

Small improvements repeated over time build big results.

How To Speed Up Credit Score Recovery

Many borrowers worry that choosing to roll multiple debts into one loan will damage their financial reputation.

So, How Long Does Debt Consolidation Stay On Your Credit Report? The timeline varies depending on your repayment history and the type of credit event recorded, but the good news is that consolidation itself does not typically work against you long term.

With consistent repayments and responsible credit management, the impact of consolidation can lessen over time while the benefits to your score may steadily improve.

Final Thought

Debt consolidation doesn’t lock you into years of credit damage, quite the opposite.

Most marks tied to consolidation drop off after a few years, while steady repayments can help rebuild your credit score and financial confidence.

The key is not just consolidating debt but sticking to a realistic repayment plan and avoiding further financial stress.

FAQ's

Yes. A debt consolidation loan will appear on your credit report as a new credit account. This is normal and isn’t considered a negative listing on its own.

A debt consolidation loan can stay visible on your credit report for up to 7 years while the account remains active and during the period after it’s closed. Any related credit enquiries generally remain for 5 years.

Sometimes your score may dip at first due to the credit enquiry or account changes. However, debt consolidation can improve your score over time if you maintain on-time repayments.

Debt consolidation won’t erase defaults or late payments already recorded. Those listings have their own expiry timeframe. But consolidating debt can prevent new negative marks from being added.

Making consistent repayments, reducing credit utilisation, avoiding new debt, and checking your credit report for errors can all support faster score recovery.

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Debt Consolidation Debt Management Tips

Can Husband and Wife Consolidate Debt Together?

Can Husband and Wife Consolidate Debt Together

What Does “Can Husband and Wife Consolidate Debt Together” Really Mean?

When asking can husband and wife consolidate debt together, it refers to combining multiple debts, such as credit cards, personal loans, or store credit into one single loan or repayment plan. For couples, consolidating debt as a team often means:

  • Either both names are on the new consolidation loan, or

  • One partner takes on the debt while the other helps, or

  • Both partners’ debts (even if individually incurred) are included in the consolidation.

This can help simplify repayments, reduce missed payments, and potentially lower interest costs, if the consolidation loan has a lower rate or better terms. See Australian Lending Centre’s own page on debt consolidation loans for options and features.

Are You Both Legally Liable?

It depends. In Australia:

  • If the debt is joint (i.e. both names are on the loan / credit card), both partners are legally responsible for the full debt amount. A creditor can pursue either one for payment.

  • If the debt is in one name only (but you decide to include it in a joint consolidation), then usually only that person is legally responsible, unless both of you sign up on the new consolidation loan.

  • When married or in a de facto relationship, debts incurred jointly or those for which both partners have agreed to responsibility are considered in legal proceedings or property settlements.

When Might It Make Sense?

Here are situations when consolidating debt together might be a good idea:

  • You both have separate debts with high interest (credit cards, personal loans) and want to combine them for a lower rate.

  • One partner is supporting the other’s repayments or expenses already, combining formally could make finances more transparent.

  • You plan large joint financial moves (e.g. buying property) and want to clear away debt to improve borrowing capacity.

  • You’re trying to limit the mental load of managing multiple payments – one consolidated repayment could simplify things.

Consolidating Debt Together

When It Might Not Be the Best Option

  • If only one partner has debt, and that debt is under a much higher risk profile (bad credit, defaults), adding the other’s name might introduce risk.

  • If the consolidation loan ends up with longer term & more total interest payable, even if monthly repayments are lower.

  • If one partner’s financial situation deteriorates, both partners’ credit may be affected.

  • If you’re using a secured loan and putting up shared assets (e.g. house) as collateral – risk of losing them if repayments fail.

Key Steps to Take for Safe Joint Debt Consolidation

  1. Inventory all debt: list balances, interest rates, fees, due dates for both partners.

  2. Check credit history / score: for both persons. It matters when applying for loans jointly.

  3. Explore options: Compare different debt consolidation loan offers, including those by Australian Lending Centre (see Debt Consolidation Loans), or other lenders.

  4. Calculate total cost: not just monthly payments but total interest, fees, length of term.

  5. Decide whether both names should be on the loan: The decision impacts liability, eligibility, and legal responsibility.

  6. Review legal implications: In separation, divorce, or property division, joint debts / loans are considered. Seek legal or financial advice if necessary.

  7. Plan for repayment: Budget together, set up automatic payments, avoid taking on new debts.

Examples / Scenarios

  • Scenario: John has $10,000 credit card debt; Jane has $5,000. Both incomes, good credit scores. They apply for a joint debt consolidation loan that pays off both debts. Result: One repayment, possibly at lower interest. But both are responsible, even if only one person incurred certain debts originally.

  • Scenario: Mary has multiple defaulted personal loans; Tom has clean credit. If Mary & Tom apply jointly, Tom’s credit might be negatively affected. In some cases, it’s better for Mary to apply alone (if possible) or work on cleaning credit history first.

Legal & Practical Considerations

  • Marriage / De facto law doesn’t automatically make both people responsible for each other’s debts, liability depends on how the debt was incurred (joint, guarantee, etc.). Australian Family Lawyers
  • If you share assets or accounts, those may be considered in property settlements. Debts too. Elringtons Lawyers
  • Check with the lender whether they allow joint applicants for consolidation loans, or whether you can consolidate one partner’s debts in one name. Not every lender has the same policy.

Link to Australian Lending Centre Options

If you’re asking can husband and wife consolidate debt together, the answer is yes and Australian Lending Centre offers debt consolidation loans designed to suit couples. These loans include features such as:

  • Competitive interest rates

  • Flexible terms to fit varied financial situations

  • Transparent fees

Also check out their guide A Guide to Debt Consolidation which walks through the process, pros/cons, and what to watch out for.

Other External Resources

For further reading, you may want to reference:

  • MoneySmart (ASIC) on Debt consolidation and refinancing – what to look out for. Moneysmart
  • Australian Family Lawyers / Pullos Lawyers on Am I responsible for my spouse’s debt – helps clarify legal liabilities. Australian Family Lawyers

Yes, husband and wife can consolidate debt together, and in many cases it can simplify finances, reduce stress, and possibly save money. 

But it’s not without risk. You need clear communication, strong financial planning, and an understanding of legal responsibility and long-term cost.

If you’re wondering can husband and wife consolidate debt together, make sure you compare multiple lenders, like Australian Lending Centre, and get advice where needed.

 

Categories
Debt Consolidation Debt Management Tips

5 Smart Moves to Make After the RBA Rate Cut – Don’t Miss These Opportunities

5 Smart Moves to Make After the RBA Rate Cut - Don't Miss These Opportunities
RBA Rate Cut: cash rate now 3.60%. 5 smart moves—refinance, keep repayments higher, first-home timing,

The Reserve Bank of Australia has reduced the official cash rate from 3.85% to 3.60%. This move is designed to stimulate the economy and ease cost-of-living pressures—and it creates a prime opportunity for Australian borrowers to strengthen their position.

Whether you’re a first-home buyer, existing homeowner, or property investor, the RBA rate cut opens doors that may not stay open for long. Below are five strategic moves to make now to maximise the benefits of lower interest rates.

1. Refinance Your Existing Home Loan

The Opportunity: If you haven’t reviewed your home loan in the past 12-18 months, you could be missing out on significant savings. With the RBA cut, many lenders will reduce their variable rates, but not all will pass on the full benefit.

Why Act Now:

  • Potential savings of $200-500+ per month on a typical mortgage
  • Access to better loan features and flexibility
  • Opportunity to negotiate with your current lender or find a better deal elsewhere

Action Steps:

  • Compare your current rate with market offers from multiple lenders
  • Calculate potential savings using online refinancing calculators
  • Consider loan features beyond just the interest rate (offset accounts, redraw facilities, extra repayment options)
  • Factor in switching costs vs long-term savings

Pro Tip: Don’t just accept your bank’s rate reduction automatically. Use this as leverage to negotiate an even better deal or explore what competitors are offering.

Ready to explore refinancing options? Contact our lending specialists for a free loan health check.

2. RBA Rate Cut: Accelerate Your Loan Repayments While Rates Are Lower

The Opportunity: Lower interest rates mean more of your repayment goes toward the principal rather than interest. This is the perfect time to supercharge your loan repayments and potentially save years off your mortgage.

Strategies to Consider:

  • Keep Your Repayments the Same: If your lender reduces your minimum repayment due to the rate cut, continue paying the previous higher amount
  • Round Up Repayments: Increase weekly repayments by $50-100 or fortnightly by $100-200
  • Use Windfalls Wisely: Direct tax refunds, bonuses, or overtime payments straight to your loan

Real Impact Example: On a $500,000 loan at 6.5%, increasing repayments by just $200 per month could save over $100,000 in interest and reduce the loan term by 6+ years.

Smart Strategy: Set up an offset account to park extra funds. This gives you the interest savings of extra repayments while maintaining access to your money for emergencies.

3. Investment Property Considerations

The Opportunity: Lower borrowing costs improve investment property cash flow and make previously marginal deals potentially profitable. However, timing and location remain crucial.

Key Considerations:

Positive Cash Flow Potential:

  • Lower interest rates can turn negatively geared properties into positively geared ones
  • Improved rental yields in certain markets
  • Reduced carrying costs for development or renovation projects

Refinancing Investment Loans:

  • Investment loan rates typically sit 0.3-0.7% higher than owner-occupier rates
  • Potential for significant savings on large investment portfolios
  • Opportunity to release equity for further investments

Market Timing Factors:

  • Property prices may rise as borrowing becomes cheaper
  • First-mover advantage before market sentiment fully shifts
  • Consider regional markets with strong rental demand

Warning: Don’t let lower rates cloud your judgment on fundamentals like location, rental demand, and your own financial capacity. Always stress-test investments at higher rates.

Considering investment property finance? Our commercial lending specialists can help structure the right solution.

4. First Home Buyer Timing Strategies

The Opportunity: The combination of lower interest rates and existing government incentives creates a potentially powerful window for first-time buyers.

Why This Timing Matters:

  • Increased Borrowing Capacity: Lower rates mean you may qualify for a larger loan amount
  • Reduced Monthly Repayments: Making homeownership more affordable from day one
  • Government Incentives Still Available: First Home Owner Grants, stamp duty concessions, and the First Home Loan Deposit Scheme

Strategic Considerations:

Act Before Price Rises:

  • Lower rates typically lead to increased buyer activity
  • Property prices may start rising as affordability improves
  • Competition from other buyers may intensify

Loan Structure Decisions:

  • Consider split loans (part fixed, part variable) to balance security with flexibility
  • Evaluate whether to pay lenders mortgage insurance (LMI) or save a larger deposit
  • Factor in all costs: stamp duty, legal fees, building inspections, moving costs

Location Strategy:

  • Research emerging suburbs benefiting from infrastructure investment
  • Consider areas with good transport links and future growth potential
  • Balance proximity to work with affordability

First Home Buyer Tip: Don’t just focus on the lowest rate. Look for lenders offering features like no ongoing fees, free offset accounts, or LMI waivers.

Ready to start your home buying journey? Apply for pre-approval to understand your borrowing capacity.

5. Debt Consolidation and Credit Optimisation

The Opportunity: Lower rates make debt consolidation more attractive, potentially saving thousands in high-interest debt while simplifying your finances.

Prime Candidates for Consolidation:

  • Credit card debt (typical rates 15-25%)
  • Personal loans (typical rates 8-15%)
  • Car loans (typical rates 7-12%)
  • Multiple smaller debts with various due dates

Consolidation Benefits:

  • Massive Interest Savings: Moving from credit card rates to home loan rates
  • Simplified Finances: One payment instead of multiple
  • Improved Cash Flow: Lower total monthly repayments
  • Faster Debt Elimination: More repayment going to principal

Home Loan vs Personal Loan Consolidation:

Home Loan Consolidation:

  • Lowest interest rates available
  • Longer repayment terms available
  • Uses home equity
  • May increase total interest if term is extended

Personal Loan Consolidation:

  • No security required
  • Fixed repayment terms
  • Typically 2-7 year terms
  • Higher rates than home loans but much lower than credit cards

Strategy Warning: Debt consolidation only works if you change the spending habits that created the debt. Consider setting up automatic transfers to savings to avoid re-accumulating debt.

Struggling with multiple debts? Our debt consolidation solutions can help streamline your finances.

Making Your Move: Next Steps

The benefits of this rate cut won’t last forever, and the best opportunities often go to those who act quickly but thoughtfully. Here’s how to get started:

Immediate Actions (This Week):

  1. Contact Your Current Lender: Ask when they’ll implement the rate cut and by how much
  2. Gather Your Documents: Recent payslips, bank statements, and loan statements
  3. Research Your Options: Compare current market rates and loan features
  4. Calculate Potential Savings: Use online calculators to quantify the benefits

Short-Term Actions (Next 2-4 Weeks):

  1. Get Professional Advice: Speak with a mortgage broker about your specific situation
  2. Obtain Pre-Approval: If buying or refinancing, secure your borrowing capacity
  3. Negotiate with Current Lender: Use market research to negotiate better terms
  4. Finalise Your Strategy: Choose the approach that best fits your goals and timeline

Long-Term Monitoring:

  • Stay Informed: Monitor RBA communications about future rate directions
  • Review Regularly: Reassess your loan annually or when rates change significantly
  • Maintain Flexibility: Ensure your loan structure can adapt to changing circumstances

The Bottom Line

This RBA rate cut represents a significant opportunity, but it requires action to realise the benefits. Whether you’re looking to save money on existing debt, purchase your first home, or grow your investment portfolio, the key is to move thoughtfully but decisively.

Remember, interest rates are cyclical. Today’s lower rates won’t last forever, but the savings and strategic advantages you secure now can benefit you for years to come.

Don’t let this opportunity pass you by. The best time to optimise your borrowing was yesterday; the second-best time is today.

Ready to make your move? The team at Australian Lending Centre is here to help you navigate these opportunities and find the right solution for your unique situation. With access to over 40+ lenders and a deep understanding of the Australian lending landscape, we can help you secure the best possible outcome.

Contact us today for a free consultation, or apply online to get started.

Disclaimer: This information is general in nature and does not take into account your personal financial situation or needs. You should consider whether the information is appropriate to your needs and seek professional advice before making any decisions.

 

Categories
Debt Consolidation Debt Management Tips

How to Build a Budget When You’re Drowning in Debt

How to Build a Budget When You're Drowning in Debt
Drowning in debt? Struggling with debt?

When you’re drowning in debt, creating a budget might feel pointless or even impossible. But a solid, realistic budget is often the first step out of financial stress and toward stability. Whether you’re juggling multiple credit cards, personal loans, or overdue bills, the right budget can help you regain control and start moving forward.

Step 1: Know Where You Stand When You’re Drowning in Debt

Before you can create a plan, you need clarity on your financial situation. That means listing:

  • Your total income (after tax)

  • All expenses (fixed and variable)

  • All debts (including interest rates and repayment terms)

You might be surprised how much you’re spending on things like subscriptions, takeaway food, or interest charges. Use bank statements or a budgeting app to review your last 1–2 months of spending. The Australian government’s MoneySmart website provides free budgeting tools and calculators to help track your expenses.

Step 2: Prioritise Your Essentials

Start by covering the basics:

  • Rent or mortgage

  • Utilities

  • Food

  • Transport

  • Minimum debt repayments

If you’re drowning in debt and can’t cover essentials or meet your repayments, don’t wait, reach out to your lender or speak to a debt solutions expert. You can also contact a free financial counsellor for independent, confidential advice on managing debt. There may be options available like hardship assistance, debt consolidation, or informal payment arrangements.

At Australian Lending Centre, we’re here to help you explore the best path forward, judgment free.

Step 3: Eliminate or Reduce Non-Essentials

This doesn’t mean you have to cut out everything you enjoy. It just means being selective and intentional while you’re getting back on track.

  • Cancel unused subscriptions

  • Cook at home more often

  • Limit online shopping

  • Set a cap on entertainment spend

Even small changes can free up extra money to put toward debt.

Step 4: Choose a Budgeting Method That Works for You

There are a few proven methods:

  • 50/30/20 Rule – 50% needs, 30% wants, 20% savings/debt

  • Zero-Based Budgeting – every dollar is assigned a purpose

  • Cash Envelope System – use physical cash to control spending

The “best” method is the one you’ll actually stick to start simple, and adjust as you go.

Step 5: Build in Emergency Buffer (Even If It’s Small)

Even if you’re in debt, having a small emergency fund (e.g. $500–$1,000) can stop you from relying on credit when life throws curveballs. Think of it as insurance for your budget, not a luxury.

Step 6: Consider Debt Consolidation or Professional Help

If juggling multiple repayments is causing stress, you might benefit from:

  • A debt consolidation loan to roll multiple debts into one
  • An informal payment arrangement through our debt management services
  • A part 9 debt agreement, if suitable
  • Speaking to a qualified finance professional for personalised support

You don’t need a perfect budget to get started. You just need a realistic one that reflects your current situation and keeps you moving forward.

At Australian Lending Centre, we help Australians find tailored solutions that make debt more manageable, without judgment.

It’s not about cutting everything out, it’s about creating structure and control so your money works for you, not against you.

Need Help With Your Debt?

If you’re struggling with repayments or unsure where to start, get in touch with our team today. At Australian Lending Centre, we’ve helped thousands of Aussies rebuild their financial future, with practical, judgment-free support.

Categories
Personal Loans Debt Consolidation

Beyond Bad Credit: Rebuilding Your Credit Score after Defaults

Beyond Bad Credit: Rebuilding Your Credit Score after Defaults
Learn how to rebuild your credit score after defaults

Rebuilding your credit score after a default on your credit file can feel like an overwhelming financial setback with no clear path forward. Whether you missed a mortgage payment, fell behind on a personal loan, or experienced an unexpected hardship, a recorded default often makes lenders wary. However, defaults don’t last forever, and with a focused strategy, you can rebuild your credit score in a realistic, step-by-step manner.

1. Understanding How Defaults Affect Your Credit

A “default” occurs when you fail to make an agreed payment (or series of payments) on a debt and the account becomes overdue enough that the lender takes formal action, often issuing a default notice.

Once recorded, a default remains on your credit report for at least five years from the date of default in Australia. During that time, it’s likely to:

  • Lower your credit score significantly. According to ASIC’s MoneySmart, your credit score is calculated based on what’s in your credit report, and defaults have a major negative impact.

  • Narrow your lender options. mainstream banks and many non-bank lenders often avoid applicants with recent or multiple defaults. However, specialised bad credit loans may still be available for those with defaults on their credit file.

  • Increase your borrowing costs. If you can secure credit, you’ll likely face higher interest rates and stricter terms. Want to learn more about how bad credit loans work? Click here.

Despite this, a default isn’t the end of the story. When rebuilding your credit score, lenders want to see that you’ve addressed outstanding debts and are consistently meeting ongoing repayments.

By planning a structured recovery strategy centered on rebuilding your credit score, you can demonstrate improved financial behaviour, ultimately restoring your access to better credit products and lower rates.

2. Realistic Timelines for Credit Score Improvement

Because a default remains on your file for five years, “quick fixes” rarely exist. Below is a broad timeline outlining what you can expect, assuming you start changing your habits today:

  1. Months 0–3: Address Immediate Obligations
    • Contact any creditors where a default has been issued and confirm the outstanding balance. If you’re struggling with multiple debts, consider debt consolidation options to simplify your repayments.

    • Agree on a payment plan (even if that means making small, regular repayments initially).

    • Begin making on-time payments on current obligations, lenders will want to see you’re suddenly prompt with any new commitments.

  2. Months 4–12: Establish Consistent, On-Time Payments
    • As you clear up or settle defaulted accounts, focus on paying all bills (utilities, rent, phone) on or before the due date.

    • If you can responsibly manage a small secured credit card or a low-limit personal loan, use it as a tool to build positive entries. Make sure you never miss a payment.

    • Monitor your credit report regularly to ensure that settled defaults show “Paid” or “Closed” rather than “Unpaid.”

  3. Year 1–2: Noticeable Score Improvements
    • The impact of the default itself gradually lessens once you’ve settled the debt and established 12+ months of positive payment history.

    • Your credit score often starts climbing as new, on-time payments offset the negative weight of the default.

    • At this stage, you may begin qualifying for small unsecured credit cards (with higher interest rates) or slightly better loan products (e.g., personal loans with higher rates but lower than subprime).

  4. Year 3–5: Nearing Pre-Default Standing
    • By year three, if you’ve maintained consistent repayments and haven’t added new negative listings, your credit score may be well into a “fair” or “good” bracket.

    • Lenders typically consider defaults older than three to four years with less severity, assuming your record since then is clean.

    • Only in year five does the default itself drop off your credit file entirely. At that point, no mainstream lender will even see evidence of that default, provided no other negative marks were added.

Key takeaway: There’s no way to erase a default early. Instead, focus on mitigating its effects through responsible money management. After one to two years of on-time payments, many borrowers start seeing tangible improvements, even though the default remains on their file.

3.Negotiating Defaults with Creditors

Many borrowers avoid contacting creditors, fearing confrontation. Yet open communication can make a significant difference:

  1. Request a Statement of Outstanding Balance
     Before you negotiate, know exactly how much you owe (including any late fees, legal costs, or default listing fees). Ask for a current statement of account in writing.

  2. Propose a Reasonable Payment Plan
     If you can’t pay the entire default at once, lenders are often willing to set up an instalment arrangement. Even small, regular payments can help. When negotiating:
    • Be realistic about what you can afford, overcommitting and missing payments again will only worsen your situation.

    • Offer a proposal that covers interest and a portion of the principal. A 12-month or 24-month plan is common if the sum isn’t huge.

  3. Ask for a “Paid in Full” or “Paid in Part” Update
     Once you’ve completed the agreed repayments, request the creditor to update the credit bureau entry to reflect the account as “Paid – Account Closed” or “Partially Paid.” This notation is more favourable than “Unpaid” (which continues dragging your score downward).

  4. Request a “Goodwill” Update (in Select Cases)
     If your financial hardship was short-lived or caused by an isolated event (e.g., temporary illness, redundancy), some creditors may agree, after you’ve settled the default, to remove the default listing from your file entirely as a goodwill gesture. While not guaranteed, it’s worth asking, especially if you’ve been a long-time client with an otherwise good history.

  5. Obtain Written Confirmation
     After any agreement, get the exact terms in writing, both the repayment schedule and the promised credit bureau update. Keep these documents in case the creditor fails to report appropriately.

Tip: Communicating early, even before a default is officially recorded, gives you more leverage. Many lenders will pause legal action for 30–60 days if you propose a genuine repayment plan.

4. Rebuilding Your Credit Score by Leveraging Secured Credit Cards and Small Personal Loans

Once you’ve settled or negotiated defaults, the next step is to start demonstrating reliable, on-time payments. Two of the most effective tools for this stage are secured credit cards and small personal loans.

For more information on how secured credit cards work and tips for using them responsibly, visit ASIC’s MoneySmart credit card guide

a. Secured Credit Cards

A secured credit card requires a cash deposit (often equal to the card’s credit limit). If your limit is $1,000, you deposit $1,000, which the bank holds as collateral. This reduces risk for the lender but allows you to build a positive payment profile.

How to use a secured card effectively:

  1. Make recurring, small purchases.
     Use the card for a low-cost monthly expense, such as purchasing a utility bill, grocery item, or streaming subscription.

  2. Pay off the balance in full each month.
     Even if you only spend $50, ensure you pay the full $50 by the statement due date. Paying in full avoids interest charges and shows you’re a reliable borrower.

  3. Keep utilisation low.
     Aim to use no more than 20–30% of the limit. For a $1,000 limit, that means spending $200–300 per month. High utilisation can negatively affect your score, even if you pay on time.

  4. Upgrade to an unsecured card.
     After 12–18 months of perfect payments, some banks will consider upgrading your secured card to a standard (unsecured) card and refunding your deposit.

b. Small Personal Loans

A short-term personal loan (e.g., $1,000–$3,000) can also help, provided you can consistently meet repayments. The key is to choose a lender that will approve your application despite recent defaults (often at a higher interest rate).

Rebuilding your credit score after one or more defaults takes time and discipline but it’s far from impossible. By negotiating promptly with creditors, demonstrating consistent, on-time payments through secured credit cards or small personal loans, and carefully managing overall debt levels, you can gradually restore your financial standing. 

While the default itself stays on your credit report for five years, its impact diminishes significantly as positive payment entries begin to outweigh the negative. 

Start today by crafting a realistic repayment plan, and within 12–24 months you should see meaningful improvements, opening doors to better borrowing options down the track.

Contact us today for a free, no-obligation assessment, let’s find the path to your financial freedom together.

Categories
Personal Loans Debt Consolidation

Debt Consolidation vs Personal Loans: Choosing the Best Path to Financial Freedom

Debt Consolidation vs. Personal Loans: Choosing the Best Path to Financial Freedom

When debt starts to feel overwhelming, finding the right borrowing solution can be your path to financial freedom and a powerful step toward financial relief. Two popular options are debt consolidation loans and multiple personal loans. Although both can streamline repayments, they work very differently.

Below, we compare their key features, costs, and suitability so you can decide which path to financial freedom best aligns with your goals.

1. What Is a Debt Consolidation Loan?

A debt consolidation loan combines several outstanding debts, such as credit cards, store cards, and other high-interest balances, into a single new loan. You make one monthly repayment at a fixed rate, often lower than the rates on your existing debts.

Key Features

  • Single repayment: One monthly bill replaces multiple due dates

  • Fixed interest rate: Predictable repayments over a set term

  • Potentially lower rate: Especially if you have reasonable credit

2. What Are Multiple Personal Loans?

Taking out multiple personal loans means borrowing separately against each need or debt. For example, you might take one loan to pay off a car repair, another for a holiday, and yet another to clear a credit-card balance.

Key Features

  • Tailored borrowing: You only borrow what you need for each purpose

  • Flexible terms: Different loan amounts and durations for different goals

  • Variable rates: Each loan may carry its own interest rate

3. Cost Comparison

Cost Comparison

Debt Consolidation Loan: You pay fees once and lock in a predictable rate. Over the life of the loan, you may save on interest if your existing debts carry high variable rates.

Multiple Personal Loans: You face multiple sets of fees and potentially inconsistent rates. However, borrowing only what you need can keep total interest lower for smaller, short-term needs.

4. Suitability and Scenarios

Loan Suitability

Consolidation Loans work best when your goal is debt-reduction and repayment simplification, rolling high-interest credit-card and store-card balances into one fixed-rate loan can be your path to financial freedom, helping you avoid rate shocks and the headache of multiple due dates.

Personal Loans are ideal for discrete, one-off expenses, think car maintenance, medical bills or home improvements offering a focused borrowing solution that keeps everyday debts separate while still guiding you along your own path to financial freedom.

5. How to Choose the Right Option

  1. Audit Your Debts & Expenses
     List balances, interest rates, fees, and repayment dates. Understanding your current cost of debt is the first step.

  2. Check Your Credit Score
     A stronger credit profile typically unlocks better consolidation rates. If your credit is fair, smaller personal loans may still be accessible.

  3. Compare Loan Quotes
     Use a comparison site or talk to a mortgage broker to get multiple rate and fee breakdowns. Factor in establishment fees and any early‐repayment penalties.

  4. Calculate Total Cost
     For each option, project total repayments over the full term. Don’t just look at monthly instalments, consider how much interest you’ll pay overall.

  5. Plan for Repayment Discipline
     Regardless of which route you take, commit to on‐time payments and avoid accruing fresh high-interest debt.

Streamlining your debts can lift a heavy burden and set you on your path to financial freedom, but the “best” approach depends on your unique situation. If you carry multiple high-interest balances and want predictable repayments, a debt consolidation loan often delivers the greatest savings. If you need financing for separate, one-off expenses, multiple personal loans give you granular control.

Ready to take charge of your finances and stay on the path to financial freedom? Australian Lending Centre can help you compare tailored solutions and secure the right rate.

Contact us today for a free, no-obligation assessment, let’s find the path to your financial freedom together.

Categories
Debt Consolidation

Comparing Personal Loans, Credit Cards, and Payday Loans: Which Is Best?

Comparing personal loans, credit cards, and payday loans
Comparing personal loans, credit cards, and payday loans.

When you need quick access to cash, it’s important to choose the right borrowing option. Personal loans, credit cards, and payday loans all serve different purposes and come with varying interest rates, repayment periods, and pros and cons. 

By visualising these differences through a table or side-by-side bar chart you can see which choice might suit your financial situation best.

1. Key Differences at a Glance

When comparing personal loans with other borrowing options, it’s crucial to look beyond the advertised interest rates. Each loan type—personal loans, credit cards, and payday loans—has distinct advantages and drawbacks, often influenced by how much you need to borrow and how quickly you plan to repay.

For instance, personal loans typically offer a fixed repayment schedule spanning several years, which provides stability and predictable monthly costs. Credit cards, on the other hand, function as a revolving line of credit, allowing you to borrow repeatedly without reapplying, but you’ll pay more in interest if you carry a balance from month to month.

Payday loans stand out for their quick approval process and short repayment window, usually in a matter of weeks. While this can be helpful in emergencies, the high interest rates and fees often make them expensive over time. Borrowers who rely on payday loans for recurring expenses can easily get trapped in a cycle of debt. As a result, it’s important to assess whether you’ll be able to pay off the full amount by the due date.

In the table below you can clearly see how these products stack up. You might discover, for example, that a personal loan offers a more manageable interest rate if you’re borrowing a larger sum for several years, whereas a credit card might be the right fit for short-term borrowing, assuming you can pay off the balance quickly. By comparing average interest rates, typical amounts borrowed, and repayment periods in one visual, you’ll be better equipped to decide which loan type aligns with your financial goals and risk tolerance.

Key Differences at a Glance

 

2. Comparing Personal Loans: Longer Terms, Potentially Lower Rates

Personal Loans: Longer Terms, Potentially Lower Rates

Pros:

  • Fixed Repayment Schedule: Payments are usually the same each month, making budgeting more predictable.
  • Potentially Lower Interest Rates: Secured personal loans especially can be more affordable if you have decent credit or an asset as collateral.
  • Higher Borrowing Amounts: Personal loans can go up to tens of thousands of dollars if you qualify.

Cons:

  • Credit-Dependent: Those with lower credit scores may face higher rates or may not qualify for larger amounts.
  • Longer Approval Process: Applications can take days (or longer) to process, especially with traditional lenders.

Recommended Strategy:


When comparing personal loans, they’re often the best choice for borrowers with fair to good credit looking to consolidate debt or fund a major purchase (e.g., home renovations). If you can secure a lower rate, a personal loan typically outperforms credit card interest over the same timeframe.

3. Credit Cards: Revolving Convenience, But Higher Potential Costs

Credit Cards: Revolving Convenience, But Higher Potential Costs

Pros:

  • Convenience: Once approved, a credit card can be used repeatedly within its limit, no new application is required.
  • Promotional Deals: Some cards offer 0% introductory rates or rewards programs.
  • Flexible Repayment: Minimum monthly payment options can help in cash-flow crunches.

Cons:

  • High Interest Rates: If you carry a balance, interest can add up quickly—especially when promotional periods end.
  • Risk of Overspending: The revolving nature can tempt users into continuous debt.
  • Variable Rates: Rates can fluctuate, affecting monthly interest charges.

Recommended Strategy:
A credit card is best for short-term borrowing—e.g., if you can pay the balance off every month (or during a promotional rate period). Consistently carrying a large balance can become expensive.

 

4. Payday Loans: Quick Approval, But Beware of Costs

 

Pros:

  • Fast Access: Often approved within minutes to hours, suitable for urgent cash needs.
  • Minimal Requirements: Generally easy to qualify for, even with poor credit.
  • Short Repayment Terms: You typically repay the loan on your next payday, preventing a long-term commitment.

Cons:

  • Very High Interest Rates: This can lead to escalating debt if repayment is delayed.
  • Low Borrowing Limits: You might be restricted to smaller amounts, which may not cover larger expenses.
  • Debt Cycle Risk: If you can’t repay on time, additional fees can quickly add up, causing repeated borrowing.

Recommended Strategy:
Consider payday loans only as a last resort. Their short terms and high fees can trap borrowers in a cycle of debt. Explore alternatives like small personal loans or credit unions if possible.

5. Choosing the Right Option for Your Credit Profile

 

Varying Credit Scores:

  • Good to Excellent Credit: Personal loans or credit cards can offer favourable rates. A credit card might be ideal for ongoing flexibility, while a personal loan suits larger, one-time purchases.
  • Fair Credit: A personal loan with moderate interest may still be available; you can also consider a secured loan to improve your chances.
  • Poor Credit: High-interest credit cards or payday loans might feel like the only options, but these can be costly. Investigate debt consolidation or credit-building strategies before taking on more debt.

Tips for All Borrowers:

  1. Compare Offers: Don’t sign the first deal you see. Look at multiple lenders or credit issuers.
  2. Understand Fees: Watch out for origination fees, annual fees, or penalties for early repayment.
  3. Check Your Budget: Use a budgeting tool or calculator to ensure you can comfortably handle repayments.

6. The Bottom Line

When evaluating personal loans, credit cards, and payday loans, it’s crucial to consider the total cost of borrowing, how quickly you can pay back the debt, and your overall financial stability. 

For most people, lower-interest loans or credit cards with sensible limits are preferable to payday loans. However, every option has its place depending on urgency, credit score, and repayment ability.

Need Expert Guidance?

At the Australian Lending Centre (ALC), we help borrowers navigate their options and find solutions that align with their financial goals. Whether you’re looking to consolidate debt, secure a competitive rate, or simply need tailored advice, our team can provide the support and resources you need.

Contact us today to explore your best borrowing pathway. We’ll help you compare loan products, understand the fine print, and move forward with confidence.

 

Categories
Debt Consolidation

A Visual Guide to Debt Consolidation: How to Streamline Your Finances

A Visual Guide to Debt Consolidation
Learn the benefits and see real examples of how to take charge of your debts in this guide to debt consolidation.

Wondering how Debt consolidation works? It can be a powerful tool if you’re juggling multiple high-interest loans, credit card balances, or other forms of debt.

This visual guide shows how combining everything into one manageable repayment can reduce your monthly costs and simplify your finances. We’ll walk you through the process step by step and provide a before-and-after snapshot of your financial situation, illustrating potential savings on both interest and monthly payments.

 

1. Understanding How it Works

Debt consolidation essentially involves taking out a new loan or line of credit to pay off your existing debts. Instead of juggling multiple bills and due dates, you’ll have one monthly repayment, often at a lower overall interest rate.

Key Benefits:

  • Potentially lower interest rates
  • Single monthly repayment instead of multiple bills
  • Simplified debt tracking, reducing the risk of missed payments
  • Possible improvement to your credit score if you consistently pay on time

2. The Step-by-Step Process

Step 1: Take Stock of Your Debts

Create an inventory of all your debts—including credit cards, personal loans, store cards, and any outstanding balances. Record the current balances, interest rates, and monthly payments associated with each.

Take Stock of Your Debts

Step 2: Explore Consolidation Options

You have several pathways for debt consolidation:

  1. Personal Loan: Often unsecured, meaning no collateral is required. If you secure a lower interest rate, a personal loan can reduce your monthly outgoings.
  2. Balance Transfer Credit Card: Some credit cards offer an introductory 0% or low-interest period on transferred balances, which can save you money on high-interest debt.
  3. Home Equity Loan (if you own property): Using the equity in your home as collateral could offer lower rates, but this option carries the risk of losing your home if you can’t make payments.
  4. Debt Consolidation: Your interest rates could be lowered, and your debts can be unified into one package.

Step 3: Select the Best Fit

In this stage of your guide to debt consolidation, choose the option that aligns with your budget, credit score, and long-term goals. Look for lower interest rates, minimal fees, and repayment terms that make sense for both your current and future financial plans. You can use tools like Finder to compare loan options, interest rates and fees.

Step 4: Apply and Pay Off Existing Debts

After approval, use the new loan or credit line to clear your existing balances. Make sure to:

  • Close or limit access to the original high-interest accounts (especially if you’re tempted to spend more on these lines of credit).
  • Keep a record of each debt being paid off for proof and peace of mind.

Step 5: Stick to Your New Repayment Plan

One of the biggest advantages of consolidation is having just one bill to manage. Set up auto-pay or reminders to ensure you never miss a payment, which could otherwise affect your credit score.

Stick to Your New Repayment Plan

3. Before-and-After Snapshot

A before-and-after comparison is one of the best ways to see how debt consolidation might lighten your financial load. Imagine you currently have:

  • Credit Card 1: $3,000 balance at 18% interest
  • Credit Card 2: $2,000 balance at 20% interest
  • Personal Loan: $5,000 at 15% interest

Before Consolidation

  • Total Debt: $10,000
  • Monthly Repayments: $600 (collectively, on average)
  • Weighted Average Interest Rate: ~17%

After Consolidation (Example)

  • Debt Consolidation Loan: $10,000 at 10% interest
  • Monthly Repayment: $450
  • Interest Rate: 10%

Before and After Snapshot

By lowering the interest rate from 17% to 10%, you could save hundreds (if not thousands) of dollars in interest over the loan’s term. Not only that, but with one monthly payment of $450 instead of three separate payments adding up to $600, you’re potentially freeing up $150 per month that could go toward an emergency fund or other financial goals.

4. Potential Pitfalls to Watch Out For

While consolidation can be a lifesaver for many, it’s not a one-size-fits-all solution. Keep in mind:

  • Fees and Charges: Some consolidation loans have application or ongoing fees.
  • Unchanged Habits: Consolidation doesn’t fix overspending habits; you’ll need a solid budget to avoid falling back into debt.
  • Longer Repayment Term: While a lower monthly payment sounds appealing, stretching the repayment term means you might pay more in total interest over time, depending on your arrangement.

What’s next?

Use this guide to debt consolidation anytime you find yourself juggling more than one loan. Alternatively, speak with an expert at Australian Lending Centre for greater support.

If you’re considering debt consolidation but aren’t sure where to start, then learn all about it here.

It’s time to take control of your financial future!

Categories
Debt Management Tips

5 Common Debt Management Mistakes and How to Avoid Them

Common Debt Management Mistakes
Managing debt is a critical aspect of financial well-being

Managing debt is a critical aspect of financial well-being, yet many people find themselves stuck in a cycle of debt due to common mistakes.

If you’re looking to regain control of your finances, avoiding these frequent pitfalls is essential. 

Let’s explore five common debt management mistakes and how you can sidestep them to achieve financial stability.

5 Common Debt Management Mistakes and How to Avoid Them

1. Paying Only the Minimum Payment

One of the most common mistakes people make is paying only the minimum amount due on their debts, particularly credit cards.

While this may seem like an easy way to manage monthly expenses, it often leads to prolonged debt and a significant increase in interest paid over time.

How to Avoid It: Make it a priority to pay more than the minimum payment whenever possible.

Even an extra $50 per month can significantly reduce the overall cost of your debt. Consider creating a repayment plan that focuses on paying off high-interest debts first to save on interest charges.

Paying Only the Minimum Payment

2. Ignoring the Total Cost of Debt

Many people focus solely on monthly payments and overlook the total cost of their debt, including interest rates and fees.

This tunnel vision can lead to a false sense of financial security and make it difficult to recognise the long-term implications of your debt.

How to Avoid It: Always consider the total cost of your debt before making financial decisions.

Use a loan calculator to understand how much you’ll pay in interest over time and explore options for reducing that cost, such as refinancing or consolidating high-interest debts.

3. Taking on More Debt to Pay Off Debt

Taking on new debt to pay off existing debt—whether through loans, balance transfers, or credit cards—can create a vicious cycle if not managed carefully.

This strategy might offer temporary relief, but it often leads to even more debt if you don’t address the root cause of your financial issues.

How to Avoid It: Before consolidating or transferring debt, develop a realistic plan to pay it off.

Ensure that the new debt offers better terms, such as a lower interest rate, and commit to not accumulating additional debt while paying off the existing balance.

Focus on living within your means and budgeting effectively to avoid falling back into debt.

4. Failing to Prioritise Debt Repayments

When managing multiple debts, it can be easy to lose track of which payments should be prioritised.

Without a clear repayment strategy, you may end up making minimal progress on all your debts or even missing payments.

How to Avoid It: To avoid common debt management mistakes, adopt a structured repayment plan, such as the debt snowball or debt avalanche method.

The debt snowball method involves paying off your smallest debt first, which can provide a psychological boost as you eliminate each debt.

On the other hand, the debt avalanche method prioritize debts with the highest interest rates, helping you save money over time.

Choose the method that best fits your financial situation, and stick to it consistently to avoid falling into debt management traps.

5. Not Seeking Professional Help When Needed

Many people struggle with debt management alone, feeling too embarrassed or overwhelmed to seek professional advice.

This can lead to missed opportunities for better financial solutions, such as debt consolidation, negotiation with creditors, or even debt relief programs.

How to Avoid It: If you’re feeling overwhelmed by your debt management mistakes, don’t hesitate to seek professional help.

Financial advisers, debt counsellors, and other professionals can offer valuable insights and guidance tailored to your specific situation.

Many organisations offer free or low-cost services to help you create a manageable plan and get back on track.

Managing debt requires a proactive and informed approach.

By avoiding these common mistakes—such as paying only the minimum, ignoring the total cost of debt, taking on more debt, failing to prioritise payments, and not seeking help when needed—you can create a solid foundation for financial freedom.

Remember, the key to effective debt management is having a clear plan, staying disciplined, and making informed decisions. Take control of your finances today and set yourself on the path to a debt-free future.

If you find yourself struggling to control your debts, a certified specialist at Australian Lending Centre could provide Debt Management.

Our proven system has helped thousands of Australians to turn their finances around.

Not Seeking Professional Help When Needed

Categories
medical loans Tips

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

How to Pay Medical Bills When You're in Debt

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.

Categories
Short Term Loans

5 Benefits Of Short Term Loans

benefits of short term loans
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.

Categories
Fast Loans

Discover The Fastest Ways to Repay Loans

Fastest way to repay loans
Check out these tips on the fastest way 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.

Warning About Borrowing

Contact Australian Lending Centre to get back on track. 

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!

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Debt Consolidation

When Is a Debt Consolidation Loan Feasible?

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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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Debt Consolidation

Are You Falling for these Debt Consolidation Traps?

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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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Financial Planning

Making Sense of Australia’s Comprehensive Credit Reporting

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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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Financial Planning

How Can Financial Distress Impact Your Health

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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

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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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Tips

Christmas Shopping – Common Spending Habits

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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

how to calculate 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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Financial Planning

Australian Borrowers Cautioned to Curb Spending

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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.”

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Financial Planning

The Cost of Raising a Child is now $1 Million

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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.

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Refinance and Refinancing

Sub-Prime Crisis Heralds New Age of Debt

Sub Prime Mortgage Crisis

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.

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News

Celebrity Lifestyles Create Debt for Young Australians

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.

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living extravagantly

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.