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Debt Management Financial Planning Personal Loans

Dos and Don’ts of Getting a Loan on Centrelink

It’s true that when it comes to taking out a loan, lenders will assess your earnings as a part of the application process. If you are relying on Centrelink payments, it can make it a harder process. But there are other factors involved as well. This means that depending on your situation, you’ll still be able to take out a loan if you need it.

Getting a Loan on Centrelink

Wondering what the process is and how you can go about getting a loan on Centrelink? You’re not the only one. We have set up a clear list of dos and don’ts for you to follow when it comes to getting a loan whilst receiving Centrelink payments.

Check Which Benefit You Are On

For some lenders, Centrelink benefits can count as income. This means your chances of taking out a loan can be higher. This typically doesn’t apply to all payment types. For example: Youth Allowance, Newstart and Austudy are unlikely to be accepted as part of your income. Why? Because they are temporary payments. If your circumstances change, you will no longer be eligible to claim them.

The first step is to work out what benefit you are on. Next, you should calculate how much this benefit contributes to your income. Providing this information to your lender upfront will make it quick and easy to determine what you are eligible for when it comes to taking out a loan.

Don’t Focus On One Lender

Just like taking out a regular loan, it is important to shop around. Of course, you want to do this without it affecting your credit score. The trick is to do it in the space of a couple of weeks. This way, it will only count as one hard inquiry instead of multiple.

Take a look at different interest rates on offer to ensure you are getting the best deal. You can even shop between traditional (banks) and non-traditional lenders to find what works for you. There is no one-size-fits-all when it comes to taking out a loan. Therefore, it is important to do your research and shop around to get the best deal.

Do Look For Lenders That Work With Centrelink

Shopping around is important. However, it is even better if you can find lenders that state ‘Centrelink Accepted’ on their website. Of course, if you can’t find this straight up, it doesn’t automatically mean they won’t accept Government benefits as a payment. The next step is to call them up and chat directly to ask them. Many lenders will be upfront about their policies. Meaning they will communicate whether they accept Centrelink payments as a form of income when taking out a loan.

Don’t Borrow Above Your Means

Being on Centrelink payments already, you don’t want to borrow above your means. This can mean finding yourself unable to pay off the debt. It can actually end up quite expensive borrowing small amounts of money – and it won’t solve your problems. All loans come with interest, so if you are unable to pay them back in a timely manner, you will be left with increasing interest over time.

Do Look At The Types Of Loans Available

Personal loans aren’t the only types of loans available to you while you are on Centrelink. You can also look at what other loans you might qualify for. This way, you can ensure you are on the best loan for your needs.

Centrelink Advance Payment

Depending on what type of benefit you are on, you may qualify for a Centrelink advance payment. Usually these need to be repaid within six months, or they will be subtracted from the amount Centrelink pays you.

Payday Loan

Finding a lender who accepts Centrelink as an income means you are eligible for a payday loan. These are small loans that tide you over until your next payday (or Centrelink pay).

Car loan

You can also take out a car loan. Your payments are used as a security for your loan, which can offer your lower interest rates.

Don’t Limit Yourself

Just because you are receiving Centrelink, doesn’t mean you are limited in your options when it comes to taking out a loan. All it means is that you need to shop around and find the right lender for you and your needs.

Loans On Centrelink

Getting a loan on Centrelink is very possible, especially if you follow this guide of dos and don’ts. If you are looking for a lender who can help you out, check out Australian Lending Centre. With our expert advice, you will be back on your feet again in no time. Finding a loan when you are on Centrelink can be simple, as long as you know the right process involved and get the right advice.

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Financial Planning

Tips to Manage Financial Challenges

If you are in a difficult situation facing financial challenges, learning how to properly use loans, for bad credit applicants, can help.

Do you have a steady source of income which covers not only your needs but also your wants as well? If you’re one of the thousands of Australians who want secure finances but are also dealing with financial issues, you may be wondering how you can achieve that reality.

What Are Your Financial Challenges?

Like many individuals in serious debt, you are probably worried about trying to pay for your daily living expenses and outstanding debts, while wishing to buy a home, a car and probably take a vacation. If so, don’t ever think that you’re alone in this aspect. There are also many struggling parents who need to save for your children’s education while paying off debts and adults with elderly parents to support. And, things get worse when you are going through a divorce, dealing with a death in your family or probably looking for a substitute job for the one you recently lost.

The truth is that there are many events in life that test not only our ability to cope financially but to think positively and overcome these trials with a smile.

Use your financing options to manage these financial challenges

Learn how to take control of your finances, boost your borrowing power and secure a better financial life with the following tips:

Write down each of your goals

Are you really determined to pay off all your high-interest loans? Or do you just need to have a better credit rating so you can borrow even more? Sometimes, we don’t actually know what we want. We just keep on looking for solutions to our immediate problems without looking into their root cause.

For example, if you have $5,000 worth of debts, both in consumer credits and loans, do you trace back to the causes of those purchases? Or, do you simply skip the reflection aspect and look for better financing that could lower your interests so you can have more money to spend on your needs and wants?

While there is nothing wrong in looking for better deals, such as low-interest and easy to pay bad credit loans. Finding the root of the problem in your finances can help you make better decisions with regard to budgeting and balancing your sources of revenue.

Swap the present wants for future needs

Are you spending a few hundred dollars on things you can live without—such as a gym membership, magazine subscription and a trip to your favourite coffee shop? If so, think of how you could use the money to build wealth, like starting a retirement plan to secure your finances in later years.

The sooner you start saving for retirement, the more financially secure you can be when you finally stop working. These contributions are typically tax-deductible, so aside from getting a tax credit for starting a retirement plan, you can also grow your money faster because savings grow faster in a retirement plan as a result of tax-free compounding.  In the end, even small contributions can make a significant difference over time.

Diversify your investments

Do you know how to protect yourself against ignorance? Warren Buffet says that it is through ‘diversification’. Since you’re not really sure if an investment will appreciate over time, you should diversify your portfolio to ensure that your exposure to any individual asset is limited.

What are the asset classes that you currently hold?

Are you involved in alternative investments like real estate, or are you simply invested in stocks or bonds?

Instead of chasing performance for a single investment class why don’t you add a good mix of real estate, cash, bonds and stocks in your egg basket? This way, you can protect your financial portfolio from wreaking havoc when the market declines. If you put more than 15% of your money into a company’s stock, you may be heading for disaster. While you may not be thinking of the worst-case scenario, preparing for these things can help you when you lose your job and your other sources of income. Losing your investments as well, all at once is not an easy crash to bounce from.

Grow your wealth

One of the most important benefits of bad credit loans is that you can use it for wealth maximisation. Create a long-term investment strategy that requires adjustment in your personal budgeting and your appetite for risk. This helps to ensure that no major market glitch will pull your finances down. You never know what will happen tomorrow, but one thing is for sure… life goes on and with the right mindset and professional help, you can enjoy a comfortable and financially stable lifestyle.

Contact the Australian Lending Centre today and receive financial advice from our specialist loans team.

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News Financial Planning Personal Loans

Private Lenders: An Alternative Source of Financing

Whenever Aussies need a loan to finance a new car or house they go to the bank. Still, they seem to forget that there are also alternative sources of financing in the form of private lending. But what are private lenders and why should someone consider these alternative sources of financing when there are plenty of banks?

Sometimes, traditional banks don’t always approve your loan application due to many different reasons, so people have to look for alternative sources. With a private lender, maybe you will finally get that new car you have always wanted.

What Are Private Lenders?

They can be either an organisation or a private individual. Unlike traditional funding sources, like banks, private lenders don’t have traditional qualifying systems, meaning that getting access to a loan is much easier.

However, because of its “different” nature of funding, lenders come with higher risks for both the borrower and the lender.

What Are the Benefits?

To begin with, private lenders can easily approve your request for a loan. In other words, if you have bad credit or are self-employed or cannot provide proof of your income, a private lender may be more accessible when it comes to requirements. So, no matter your income and your credit score, a private lender will get you the loan you need.

Another reason for applying for private funding is due to the straightforward process they have. Unlike traditional lenders, the private ones will accept your request very fast. Not only that, but your loan could be available right after your application is approved. This can bring a lot of advantages if you are on a tight schedule.

drawbacks

Drawbacks of Using Private Lenders

It almost sounds too good to be true, but private lenders do come with a set of drawbacks that can make them inaccessible to some Aussies.

The first thing to know is that their rates are typically higher than those of traditional lenders. This is how they compensate for the increased risk and they will have high interest rates for those with bad credit.

Some lenders may feature high fees, from the start until the finish of the loan term. In any case, be sure that you know what you are paying for.

Another drawback is that some loans are offered for shorter terms in comparison to what traditional lenders offer. This happens especially when it comes to mortgages. When conventional mortgages have a twenty-five to thirty year terms, private lenders offer smaller mortgages that just fill the gap until securing more traditional finance.

The private mortgages can also be used to cover needs like the construction of a house. They can also cover for the period between purchasing a house and selling one. The term on these mortgages is one or two years, which means that you will have to move fast to pay the loan back.

Another thing you should know about private lenders and their services is that some of them do not offer the same features as traditional lenders do. In other words, some loans may lack features such as redraw facilities or offset accounts. So, if you were hoping for these types of features, you might have a problem.

How Can Private Lenders Help Me?

Private lenders can offer you a lot of options when it comes to loans. Here are a couple of them:

  • Caveat loans are fast-settling loans secured against a property. These loans are short, last sixty to ninety days and settle very quickly.
  • Bad credit loans are the ones you need if you have a low credit score. Be careful though; these loans come with high interest rates, so use the money wisely and make sure you pay back the loan fast.
  • Bridging loans can be offered by private lenders and can be used by the customer to build or purchase a new home before the sale of their old home. These loans have a term of twelve months, and they are paid back when the old property is sold, making them quite useful in the long run.
  • Second mortgages are also offered by private lenders. These loans are available for those who already have a mortgage on a property who are in need of extra funds for multiple reasons. Depending on the lender and the loan terms, these loans could have high interest rates and extra fees. With all these factors in mind, any client should think twice before applying for this kind of service. So be very careful if you do.

Conclusion

Private lenders are here to stay, whether you like it or not. They have a lot of advantages in comparison to traditional lending systems, but they also have some drawbacks. At Australian Lending Centre, we offer second mortgages at competitive rates and flexible repayment terms that can be catered to your specific needs. Contact us today for a free assessment via our enquiry form now!