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Interest Rates

What Is A Good Interest Rate?

Taking out a loan of any kind can be the perfect way to get the financial help you need to achieve your goals. From a mortgage to buy a house, to a personal loan to fund that next holidays, there is a large variety of loan options on offer depending on your needs.

The one thing all these loans have in common is that they charge an interest rate on top of the loan price. This means you end up paying back the loan amount, with interest, over a set period of time. It stands to reason you want that interest rate to be as low as possible to save you money. So, what is a good interest rate?

What Is The Interest Rate?

First, let’s take a look at what exactly the interest rate is. An interest rate is a percentage amount that the lender charges in return for lending you the money. It is additional money that needs to be paid off on top of the amount borrowed for the loan.

If you look at it simply, interest is the fee you pay for using someone else’s money. In this case, the lender. This is how lenders profit out of loans, giving them an incentive to provide you with one in the first place. Many people take out a loan when they don’t have the cash available for what they need to purchase. The interest rate is the fee for borrowing that money.

Here are some things you need to understand about your loan before working out the interest rate:

  • Principal amount: this is the amount you are looking to borrow.
  • Loan term: this is how long you will be taking to pay off your loan. The longer your loan term, the more interest you pay.

The best way to look at it is by using an example:

You have taken out a personal loan of $20,000. It has a set term of 5 years, with an interest rate of 8.40% and you are making monthly payments.

To work it out, you divide the interest rate by the number of payments in a year, then multiple this by the loan principal to work out the interest you will be paying.

In this case: (0.084 divided by 12) x 20,000 = 140

This is the amount of interest you will be paying when you take out an interest-only loan. This figure will change when you start paying the principal down the track.

With this in mind, what is a good interest rate?

fixed vs variable itnerest rates

Fixed Vs Variable Interest Rates

There are two types of interest rates you can lock in when you take out a loan. Knowing what is a good interest rate will help you work out the best options for your needs.

Fixed interest rate: this is where the interest rate is locked in at the beginning of the loan term and doesn’t change. They remain the same throughout the life of the loan. It means from the start of your loan, you can calculate the interest you be charge throughout and this figure won’t change. It is considered a safer option.

Variable interest rate: on the other hand, a variable interest rate changes with the market rate. When that rate rises, so will your loan payment. At the same time, if that rate lowers, you reap the benefits. This is considered a more risky option, but it can pay off in the long run.

What Is A Good Interest Rate?

Are you wondering what is a good interest rate? It all depends on the market at the time you are borrowing. Before you take out a loan, it is a good idea to shop around to see what interest rates are on offer. When it comes to comparing lenders to take out a loan with, you can look at the interest rates they were charging and use this to determine where the best value for you lies. You can often find a number of comparative tools online, which help you get a great overview of what a competitive interest rate looks like.

It all comes down to doing your research before diving in and taking out a loan. By determining what a good interest rate looks like you can save yourself plenty of money over the course of your loan and end up paying significantly less overall.

good interest rate

What Is A Good Interest Rate On Your Next Loan?

Are you on the hunt for a new loan for your situation? If you are looking to lock in the best interest rate, then speak to the experts at Australian Lending Centre. We will help you hunt down the best interest rates and provide you with a number of competitive options when it comes time to take out your next loan.

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Interest Rates News

When Will Australian Interest Rates Rise Again?

The global pandemic COVID-19 has had a drastic impact on all industries. People have found themselves out of work, businesses have been forced to close down and people have been self-isolating from home. Australia’s economy has deteriorated under the impact. To protect the economy, Australian interest rates have dropped to rock bottom, however, this can only continue for so long. In this article, we discuss when will Australian interest rates rise again?

The primary response to the crisis has been focused on public health. While the secondary response has been saving what’s left of the Australian economy. Back in March 2020, the Reserve Bank responded by slashing the interest rates to a record low of 0.25 per cent. As we slowly return to life as normal, we are left wondering when will Australian interest rates rise again?

The Current Climate

With the onset of the global pandemic and the situation changing daily, no one could have predicted the impact this health crisis would have globally. Yet, as soon as social distancing laws were placed in Australia, many businesses were forced to shut down. This lead to an immediate 5.5% slump in jobs. Data suggests that 780,000 people found themselves out of work by the beginning of April. Shockingly, restrictions were only introduced on 30 March. In addition to this, wages were said to be down 6.7% in the three weeks following this.

To combat this, the Government introduced the Job Seeker and Job Keeper packages. This was an effort to keep the economy flowing and as many people in employment as possible. The Reserve Bank of Australia also stepped up by slashing interest rates. They now sit at the lowest ever in Australia’s history.

interest rate increase

How Do low Interest Rates Help?

These interest rate changes have a huge impact on everyday Australians. However, the level of impact depends on whether they hold fixed or variable loans. If they hold a fixed loan, they will see no change. But those with variable loans will be able to save plenty of money with a reduced amount of interest charged on their account. This, in turn, impacts on their consumer behaviour. If they are able to free up more money, they will spend it in the economy. As a result, giving it a much-needed boost. It also lowers the cost of taking out a loan. Those struggling with finances during this crisis can use a loan as a viable option to help them out with the loan interest rates.

Now that restrictions have eased with children returning to school and people returning to work, where does that leave interest rates? When will Australian interest rates rise again?

When Will Australian Interest Rates Rise Again?

The simple answer: nobody knows. What we do know is that it is unlikely we will see a further drop in interest rates. But at the same time, they are also unlikely to rise any time soon. Reserve Bank governor Philip Lowe said the bank would hold the cash rate at 0.25 per cent “until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2-3 per cent target band”. While restrictions have eased, life is yet to return to normal. Unfortunately, it could be a long time before we see the economy make a recovery from the effects of the pandemic.

According to Dr Low, this rate could remain in place for years, as the economy slowly builds its way back up again.

At the moment, there are too many unanswered questions to be able to put in place an accurate prediction. With restrictions beginning to ease, we have to wait and see if we are hit with a second wave of the virus. This would result in stricter measures coming back into play. These are all new waters we are navigating. Sadly, it doesn’t look like we should expect things to change anytime soon.

The good news is, now is the perfect time to get your finances in order as much as possible in your situation. You can use the rate cuts to save your money so it is put away for a rainy day, pay off any existing debt while the interest is low, or even refinance your loans into one new low interest rate. Now is the time to start exploring your options.

rise in interest rates

Need Help?

With the current climate, now is a good take a good hard look at your financial situation. From here, you can see what changes you can make to secure your future. Work out which option is the best for your current situation now. From here, you can put a plan into place while the interest rates remain low for the foreseeable future. If you are looking for a helping hand to navigate these waters, contact the experts at Australian Lending Centre. We can help you get on track with your loans. With our assistance, you can capitalise on the low-interest rates.

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Short Term Business Loans

Are Short Term Loans a Good Option for Small Business Owners?

It goes without saying that a business is doomed to go under without proper funding. Small companies are more prone to dying out, at least in the beginning, if funding isn’t injected into them. If your small business is however growing, you may also need funding to help expand your operations.

In both cases, a short term business loan may be your saving grace.

What are short term business loans?

A short term business loan is a fast and flexible loan type, that can help improve your business cash flow. Short term business loans are typically quick to access and require minimal documentation. They are generally used for the following reasons;

Cover a business initial start-up costs

  • Pay staff
  • Purchase inventory or equipment
  • Pay for emergency situations
  • Purchase stock
  • Pay BAS or Tax Payments
  • Working Capital
  • Marketing or Advertising.

The benefits of short term business loans

Quick funding

Short term loans provide immediate aid to business owners that need it. The process is quite short, and the requirements are easy to fulfill. To give you a hint of how quick the funding is, the approval period of a short term loan can be 24 hours.

That, of course, does not apply to a large loan. Bear in mind that you can use this money to seize some opportunities; they’re not only for worst-case scenarios (going bankrupt or risking closure, for instance).

They are given to people with bad credit score

Not only are these loans given in a matter of hours (depending on the policy of the lender, really), but they are handed out to people who would be rejected by banks on account of their low credit score.

In this light, short term loans are life-savers. Given that they are short-term, creditors know that you will be able to pay the loan back, even if your credit score is a little low.

Short term business loans can be given for a variety of purposes

You can use the money from a short term loan for any business-related expense. This may include; an investment into a product or service that will better the business such as a marketing campaign. No matter what you need, you’re set with a short term loan.

Drawbacks of Short Term Business Loans

Smaller sums of money

Short term business loans may not allow you to borrow large sums of money. For example, If you need to borrow $50,000 you may not be eligible for a short term business loan. Bigger sums of money are not given out as a short term loan because of the nature of the loan, which has to be repaid in less than one year.

High-interest rates

Many lenders know that, once you’re looking for short term loans, you’re probably in dire straits. Unfortunately, this generally translates to higher interest rates. It is therefore important to do your research and make sure that you find the right lender. This way, you can at least make sure you’ll be going with the one that will take the least from you.

Other strings attached

Apart from the high-interest rates, you may be required to pay some other additional fees imposed by the lender (depending on each lender).

Risk of losing the collateral

Short term loans are usually secured by collateral, even though they’re basically to be repaid within a few months. Should you default, you could lose your car or whatever it is you secured the loan on.

People seem to think that secured loans are so much better than their unsecured peers. If you are 100% certain that you can repay the loan, consider a secured loan.  If possible, always get short terms loans without any collateral. There’s no way you will default on a loan like this. It’s almost impossible, given that the sum of money you’ve borrowed is quite small.

Loans with short term make sense for small business, but they also have some unpleasant downsides. If you have a financial advisor in your company, it would be a good idea for you to consult with him/her before making a decision. If you don’t have an advisor, you can speak to one of our expert loan consultants at Australian Lending Centre.

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Debt Consolidation Bad Credit Loans Personal Loans Short Term Loans

Quick Loan Myths Everyone Should Stop Believing

If we are honest, there are a lot of quick loan myths in the loan industry which have negative perceptions. There are many misconceptions as some lenders employed unethical lending practices. As a result, a range of false or exaggerated perceptions has emerged. Still, you should know there are always two sides to every story.

1. Quick Loans Are Schemes That Rip You Off

To start with, due to the bad publicity that quick loans have received in recent years, most people have come to believe that these loan products are rip-off schemes. This one of the main quick loans myths.

Quick loans are suited for people that are in urgent need of cash but cannot access it elsewhere. Therefore, as long as you meet the loan repayment terms, everything is fine. Things are likely to get off track when you miss making repayments or you default – which applies to all types of loans.

2. Quick Loans Are Beneficial to Lenders Only

Moving on, another of the common quick loans myths is that providers of quick loans want to rip-off customers. However, considering that the lending criteria for these loans are really permissive, it makes sense for the interest rates to be as high as they are – especially since these loans usually don’t imply a credit rating check.

People with poor credit rating can seriously find these financing options life-changing. The only requirement you should meet is to have a steady income so that you can repay the loan in time. Also, since this type of loan doesn’t require collateral, the additional costs are greater than in the case of other types of financing.

3. Quick Loans Have Concealed Fees and Additional Costs

The list of popular myths regarding short-term loans continues. Many people are under the impression that payday loans come accompanied by hidden costs and fees the lender hesitates to disclose. The reason behind this assumption is that the majority of borrowers aren’t responsible enough to go through all the terms and conditions included in the signing papers.

It is against the law to conceal fees and additional costs – that is to say, all lenders based in Australia must be 100 percent transparent and upfront concerning the terms and conditions of the loan. Therefore, in order to avoid such scenarios, borrowers should take the time to scrutinise all the information about the loan product.

4. Quick Loans Are for People with Serious Financial Problems

Furthermore, there are also quick loan myths that short-term loans are provided for poor people with unstable financial situations. As mentioned, quick loans do not reflect financial stress, they simply offer people with an immediate alternative to cash.

Additionally, all types of people deal with financial difficulty. Therefore, it would be wrong to assume that whoever gets a quick loan is part of a specific segment of the population. As a matter of fact, when you need money for an emergency, it simply means that you’re going through something and there’s no other way in which you can get the money you need.

5. Payday Lenders Use Threatening Strategies to Collect Payments

While it’s true, to some extent, that some payday lenders use aggressive marketing techniques to promote their loan products, this doesn’t mean that they use threats to collect the payments.

Truthfully, reputable lenders, such as Australian Lending Centre are transparent and upfront regarding the terms of the financing. At the same time, reliable lenders never use these tactics. This merely means that you should do your research before picking out a lender out of the sea of lenders.

6. Taking Out Quick Loans Means That You’re Irresponsible

There is a common misconception that those who apply for a quick loan are financially irresponsible. Nevertheless, as long as you consider both the pros and cons of this decision, this doesn’t apply. It is implied that each financial decision has a range of pros and cons. It makes total sense for quick loans to have both pros and cons.

Evidently, the pros are that you get quick access to cash when you need it, without having to worry about the application process, adding collateral or a co-signer. When you need cash ASAP you don’t have time for these.

On the other side, the cons are that the interest rates are high and that, if you default on the loan, you might end up in financial hot water. Still, this applies for all types of financing – meaning that, regardless of the loan product you want to apply for, you should be 100 percent sure that your financial situation allows you to cope with making repayments.

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Personal Loans Interest Rates

Why Patients in Debt Turn To Low Interest Rates When Applying for Loans

It’s definitely costly to be sick nowadays and patients in debt are particularly vulnerable. Despite the government’s efforts in promoting healthy workers, healthy eating and active living, illnesses still arise and more often than not people aren’t financially ready for it. No wonder many patients look for low interest rates loans when in need for financial security.

The No-Work-No-Pay Policy Scares A Lot Of People

Would you rather go to work than call in sick and risk losing your job in the process? Many people drag themselves into work while they are sick simply because they cannot afford to call in sick. If you are a casual or on a contract without sick pay benefits, you might be forced to report for work despite your doctor’s advice.

It’s not uncommon to hear stories of people suffering from injuries or illnesses to work through their discomforts so that they can still receive their wage. Some people don’t even bother applying for sick leave if they know their company is restructuring or cutting down on costs and firing employees.

Some people take a few days off but immediately return to work after using up their statutory sick pay, even though their doctors’ may advise them to take a longer break. This can actually harm your future health and mean you need to take more time off down the track.

Although the Australian law requires employers to give their employees’ sick leave benefits it is worth noting that the number of days covered may not be enough for a person to fully recover. That’s why some employees’ will come back to work earlier so that they can keep their job and receive their wages in full.

Many Self-Employed People Have No Comprehensive Medical Insurance

While Medicare, gives you access to free hospital treatment and subsidises your out-of-hospital medical treatment, you may still have to shoulder some out-of-pocket expenses if you need elective surgery. Some people still take out private health insurance products from top companies like Medibank, Australian Unity, HCF and the HBF. The most common health insurance coverage includes the following: Lifetime Health Cover, Medicare Levy Surcharge, and Private Health Insurance Rebate. But, there are times that the insurance coverage is not enough to foot the bill.

There are many things you need to pay for, and being sick doesn’t help at all. Patients in debt can save money by doing the following:

Groceries

Food takes up most of our money, with it being one of our basic necessities; we can’t really go without it, and so minimising the costs used for them might be the best option. If you’re used to eating out you should start cooking homemade food, not only is this cheaper, but it’s also healthier.

When buying groceries, you should make sure that they will last you an entire week without having to go back to the market again. Remember, this should turn out cheaper than eating out every day, so buy only the ingredients that you’ll need. If possible, look for discounts, or you could even look for some vouchers and/or coupons that might be lying around your home.

Transportation

Going to and from work can be such a hassle. Having your own vehicle might be more beneficial on your part because you can budget the money you use on fuel. However, as with everything in life there are other expenses attached to owning your own car; this is where public transport has the upper hand.

The key to budgeting your transportation expenses is to average your monthly expenses and then create a budget based off that figure.

Bottom Line For Patients in Debt

You need to pay your debts each month, and unless you find personal loans with low interests for patience in debt, it is difficult to keep up with your payments.

Bills might come knocking at your door on the 15th or the end of the month, so you should make sure that you have money set aside for them. Everyone has debts they have to pay. Do everything possible to pay on time and you’ll eliminate them in the near future. Australian Lending Centre offers loans with low interest rates that you can fall back on at troubled times. If you’re interested in applying for an affordable loan, make an enquiry today!

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News

How Are Interest Rates Made? 3 Factors That Increase Loan Interest Rates

Aside from your credit score, did you know lenders sometimes determine interest rate levels depending on the supply and demand of credit? Or that you might be able to get lower interest rates by applying for the same loan in another financing company? In fact, these could be some of the strongest factors that lenders would consider in charging an interest rate on your loan. Let’s discuss these factors that can increase loan interest rates…

Economic factors

Some of the most important basis of the banks in setting their interest rates includes some factors that can either push interest rates lower or higher depending on the lenders’ interest:

  • Gross Domestic Product-The growth of GDP or the monetary measure of Australia’s market value of the final goods and services produced within a specific quarter affects the interest rates of the loan. Australia’s GDP Annual Growth Rate increased by 3.4 per cent from 1960 to the last quarter of 2016. This means, the country’s economy is growing and so is the investment.
  • Inflation– or the continuous increase in the overall price level of goods and services in Australia’s economy over a period of time can result in a decrease in the value of Australian dollars overtime. Since inflation increases the value of consumer goods and services, it will also change interest rates on loans.
  • Interest rate volatility –Lenders watch the wild swings of interest rate closely and take measures to avoid loss of profits. While some borrowers may hold off from applying for financing and postpone important investments, there are those who settle for high-interest loans to address their current financial issues.

Income


Typically, more income results in a lower interest rate. Similarly, if you don’t meet the income requirements, you may find yourself on the higher end of the loan interest rate.

Borrowers with stable income plus a good credit score are most likely to pay back their loans. Some lenders may agree to waiving fees or lowering rates and could end up saving a good amount of money with high income.

Credit report


Another one of the factors which can increase loan interest rates is your credit report. Lenders typically adjust their interest rates when determining how much to give to a specific borrower depending on various factors. After they determine the eligibility of a borrower, they adjust the rates that would best match the borrower. So, if you have an excellent credit your borrowing capacity may increase significantly. When you have a good credit report, your borrowers would consider you as a responsible debtor that can handle more credit. You can also enjoy an attractive rate for your loans when you have a clean credit history.

While people with high credit scores have some bargaining power and lenders will be happy to offer you lower-than-average financing rates, the same thing is not true to those with poor credit rating. Most of the time, only those applicants that lenders believe would be paying back the loan on time enjoy this treatment.

Interest rates are made by creditors based on their own criteria. If you have bad credit and you need cash fast, Australian Lending Centre can provide you with easy-to-pay, low-interest loan solutions.

Contact the Australian Lending Centre today!

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Home Loans Interest Rates

Are You a Victim of High Mortgage Interest Rates?

In recent years, many of us became victims of high mortgage interest rates without even realising. This problem affects mostly the home loans because their term is the longest. But how can you know if you are in such a situation, too?

High Mortgage Interest Rates – Are you a victim?

Verify your current loan

In the case of home loans, the term is rarely shorter than 25 years. Most probably, when you have signed for the loan, you have checked it thoroughly and chosen what was the best for you at that moment. As the years have passed, the circumstances may have changed. For example, if you have opted for some flexible features, such as an offset account that you no longer need, it would be a good idea to downgrade your loan to a basic one now.

If, after verifying your current loan, you decide that you are a victim of high mortgage interest rates, you may consider getting a better rate from another provider.

Check the refinancing costs

As you decided to switch to a newer loan or provider, you may be so excited about the savings you can make that you simply forget about the refinancing costs. Don’t rush to conclude that your mortgage interest rates are the worst on the market and you can completely change the situation by changing lenders.

In most of the cases, calculating the refinancing costs will discourage you from making a change, as they are higher than the savings. Check to see if you have paid the lender the mortgage insurance and establish what are its terms and conditions, as well as the discharge fee. Also, calculate the costs of the application and valuations fees if you opt for a new lender.

Analyse the options

If, after calculating the refinancing costs, you still consider that you need to refinance, analyse all the options before making a decision so that you avoid being a victim of high mortgage interest rates once again.

This analysis should include a comparison of the loan types, in order to decide if a variable, split or fixed rate loan is suitable for you. If you don’t need any flexible features, don’t opt for them, because your mortgage rate will increase.

Another important aspect of this evaluation is to check the potential providers. Find out which of them have the best deals, who is reliable or not, etc. Moreover, read the contract carefully and don’t be afraid to ask all the questions you have before signing for a new loan.

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Home Loans

Home Loans – Do’s And Don’ts

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

Do’s and Don’ts of Home Loans

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

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

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

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

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

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Interest Rates

4 Reasons Why the Australian Reserve Bank has not Cut Interest Rates

Australian Reserve Bank has not Cut Interest Rates

The Reserve Bank of Australia (RBA) has slashed interest rates to 3%, a record low, in November 2011. For the last 15 months, it has refused to increase or further cut it. The central bank has decided to leave the rates unchanged during its first policy meeting for this year, which was held in the first week of February. As it seems, the monetary policy of the country keeps the mode on a wait-and-see program.

Interest rates were last trimmed down to help spur possible growth after the then decade-long mining boom had indicated clear signs of losing its momentum. The economy somehow slowed in the entire 2012 because export demand for raw materials coming from the country eased.

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Home Loans

4 Things to Do to Avoid Defaulting on Your Mortgage Repayment

If you have a current mortgage and you suddenly lost your job or your source of income, you surely are in trouble. Aside from making ends meet for your daily necessities, you have to find ways to continue repaying your home loan. That will be a big challenge especially if you are certain you cannot afford to shoulder your monthly mortgage repayment anymore.

It is a must to avoid falling into a default. Aside from possibly being evicted from your own home, you will not like its long-term effect on your credit history. Try to prevent it from happening. Here are four effective ways to do so.

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Bad Credit Loans

5 Ways to Increase Your Chances of Getting Loans Approved With Bad Credit

It will inevitably be more difficult for you to obtain a loan if you are suffering from bad credit. As you explore your options, you will realise that your choices are limited. Borrowing can also get more expensive. If you are struggling to get loans approved with bad credit then you’ll be pleased to know there are bad credit loan solutions available.

These days, it can still be possible for people with poor credit to get approval for their loan applications. Here are five ways that can help you increase your chance of getting loans approved with bad credit.

The Process To Get Loans Approved With Bad Credit

1. Apply for a loan from a credit union.
While most lenders use credit scores as a basis for approving loan applications, credit unions will be more sympathetic and considerate to lend money even if you have poor credit. Such organisations derive money from individuals and other investors, not from banks. But those are still profit groups. Credit unions, no matter how compassionate, will still aim not to lose money. Those can set specific criteria to approve bad credit loans.

2. Use security or collateral.
This really can give you the upper hand when it comes to getting loans approved with bad credit. Having an asset like your home, land, car, or boat can be an advantage. You can use any of those as collateral to secure your loan. This is because if you are securing your loan against a physical asset, then lenders are more willing to take a risk. Most loan providers will be more than willing to provide you with loans and implement competitive or lower interest rates. However, the loan amount may directly depend on the equity or valuation of the collateral. Just strive harder not to fall into default as it may lead to repossession of the property.

3. Find a guarantor or co-signer.
You can instantly increase your chance of getting a loan approval even if you have poor credit if you can have a guarantor or co-signer, who has a good credit score and a constant source of income. You may ask your family members, relatives, or close friends to do the favour. Just be aware that if you will default on the loan, your co-signer will be forced to pay the loan amount on your behalf. Convince your guarantor that you have no intention to put him/her into a compromising situation.

4. Try to correct your credit report.
If you have doubt about your credit score, then did you know you can check it for free? There can be significant errors that are currently affecting your credit rating. Poor credit may be due to previous unpaid bills that had already been settled. Or your record may have included loans or delinquencies that you really did not incur. Credit rating agencies may also commit errors in reporting. Don’t worry because they are also open to correcting their own mistakes.

5. Declare or present your savings account.
There is no need to have huge savings. Even with small savings, you can possibly prove to loan providers that you are financially stable and you are on track to rebuild or improve your credit record. This can also serve as an assurance that you will have funds to repay your loan if ever you experience a shortage on your regular or fixed income.

By following these 5 simple tips, you can boost your chances of getting loans approved with bad credit. It’s a lot easier than you might think, but if you have any questions then we’ll be happy to help. You contact a specialist here.

Categories
Financial Planning

How Can Financial Distress Impact Your Health

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

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

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

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Interest Rates

7 Things which Contribute to Interest Rate Cuts

Interest rate is the amount charged by lenders or loan providers against the borrowed money of consumers/borrowers. As a consumer, you probably are always monitoring it. When rates are low, it can be ideal to apply for and obtain loans. It is the time when borrowing will not be that expensive.
Interest rates usually go up, especially these days when global economies and finances turn volatile. But at times, governments and central banks also cut such rates. Here are seven factors that usually lead to reduced or lowered borrowing rates.

Categories
Interest Rates

Australian Economy is Growing – Interest Rate Impact

The Australian economy grew 1.2% in the second quarter of fiscal year 2011. That growth exceeded expectations of a 1% economic expansion. This surprised numerous economic analysts and market observers, who mostly predicted a slower growth in the period. According to some experts, the economic boost could be attributed to stronger performance of several sectors aside from mining, which for quite some time has been solely driving growth of national economy.

Investors look at this news as an additional positive development. A better performing Australian economy could translate to better profitability. Most company shares in the market have been rising following the announcement of the better-than-expected economic growth. The local currency is also gaining strength against the dollar, which is ideal for many businesses, especially those that require importation of raw materials. But what is the impact of this news to consumers, particularly to the interest rates?

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Home Loans

Is It a Good Time to Buy Property in Australia?

The Australian property market is not expected to drop, but it is projected to remain steady all throughout this year (2011). Price tags are set to remain within their current levels but would more likely grow moderately in the next two years. This is the unanimous forecast of numerous industry analysts and observers in the country.

Housing market experts note that local property prices could remain flat or slightly rise within the coming months. However, they assert that homebuyers need not worry. Price increases across the country are still low when compared to housing costs in most other developed countries. Thus, it is still the best time to find and buy Australian properties.

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Debt Consolidation

Unemployment Projected to Rise

The continuing interest rate squeeze and falling share markets, are expected to slice consumer spending habits, which in turn will slow the economy and force an extra 75,000 Australians into unemployment by the middle of next year.

While there has been a small concession for Australian households last week with the Reserve Bank’s first rate cut in 7 years, we are not out of the dark yet it seems. David Uren, the Economics correspondent for The Australian cautions the “Treasury expects the unemployment rate to rise from its recent historic low of 4 per cent to reach 4.75 per cent by the middle of next year.”

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Interest Rates

First Interest Rate Cut in 7 Years

Australians have welcomed with open arms the Reserve Bank’s first official drop of interest rates in 7 years. The RBA on September 2nd, dropped its cash rate by 0.25 to 7%, its first cut since December 2001.

While this comes as a certain relief to many families struggling under the pressure of mortgages, many are still cautious. As Prime Minister Rudd announced “Interest rates took a long time to rise and they will take a long time to come back down. And the road will be a very uneven one on the way through.” However many remain optimistic, especially those struggling to make ends meet, and spiralling into debt.

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Interest Rates

Interest Rates on the Rise Again

After raising interest rates three times in quick succession in late 2009, the Reserve Bank of Australia (RBA) increased interest rates again in March – the first rate hike for 2010.

According to the Australian Bureau of Statistics (ABS), retail sales rose a higher-than-expected 1.2% to $20.14 billion in January – up from $19.91 billion in December. After the ABS announced strong growth in retail sales, the Reserve Bank decided to raise the official cash rate to 4.00%, marking the fourth rate rise in five RBA meetings.

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Refinance and Refinancing

Home Loan Stress from Interest Rates Hike

As some of the big banks have raised their interest rates higher than the Reserve Bank, many Australians are looking for a way to defuse their mortgage stress.

By refusing to pass on all interest-rate reductions, inflating the Reserve Bank’s increases or adding hikes of their own, the banks have widened the gap between the cash rate and their key interest rates by as much as 1%.

If you’re struggling with home loan repayments you may want to consider refinancing your home loan. Refinancing can allow you to access cheaper interest rates or even unlock the equity in your home to renovate, buy an investment property or consolidate debt. The Australian Lending Centre has years of experience helping people to refinance to achieve these goals.

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News

Inflation Rise Confirms a Rate Rise

Kevin Rudd admits record low rates are certain to increase after an inflation rise of 2.1%.

The inflation rate has economists tipping a fourth consecutive interest rate rise when the Reserve Bank meets next Tuesday.

Figures from the Australian Bureau of Statistics reveal headline inflation rose 0.5% in the three months to December, for an annual rate of 2.1%.

Mr. Rudd said interest rates would obviously rise again.

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Interest Rates

Budget Aims to Tame Inflation: Will Interest Rates…

16 May 2008

Many analysts have praised the new 2008 Rudd Government Budget for its spending cuts in an amiable move to stop the rising problem of inflation, however will it be enough?

The aim to put downward pressure on the inflation crisis has seen slashes to high income earner benefits, with the media responses generally positive towards the Budget’s target. However there has also been speculation about how far the budget can go in entirely tackling the monstrous inflation, “the Reserve Bank of Australia is not out of the woods yet” warned Bank economist Riki Polygenis.

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Debt Management

Australian’s Quest for McMansions Causing Debt to Sky Rocket

The idealism surrounding Australian home buyer’s quest for their own four bedroom McMansions, is causing debt to sky rocket. The need to obtain a piece of the Australian Dream with families entering hefty mortgages is causing added stress to household’s nation wide.

The McMansion, featuring four or more bedrooms accounts for 60 per cent of the 1.2 million houses and apartments erected since 1995, the Inquirer has found.

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Interest Rates

Homeowners Sigh Breath of Relief as Interest Rate Rises Halt

Homeowners Australia wide have sighed a breath of relief this month, as the Reserve Bank did not raise interest rates. There has been an ongoing climb in interest rates, with 12 steady rate hikes since 2002. This month signals the first time the RBA has remained static in 6 years.

As Icap senior economist Matthew Johnson discerned recently, “The bond market is saying pretty strongly that the RBA is not going to raise interest rates”. This is welcomed news for home owners struggling under the increasing pressures of mortgage repayments.

The stresses of mortgage debt is a wide spread problem across the nation, with homeowners’ living budgets suffering as they struggle to meet house basic repayments. The end to the rate rise crisis momentarily gives a cautious optimism for Australians.

If you are struggling under the rate rises and are falling into mortgage debt, ALC can help refinance your repayments into one easy monthly sum. For more information on the options right for you call us now on 1300 138 188.
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Home Loans

New Trend Forced in Mortgage Market

New figures suggest that there is a new trend emerging in the mortgage market; non romantic couples entering into a shared mortgage.

It is becoming more and more common for people to enter into a joint borrowing arrangement which maximises their deposit and lowers the ever increasing repayments. The alternatives of soaring rent prices or individually entering a staggering mortgage have forced these platonic loan applications. With debt rates rising, as individuals are struggling to meet repayments with the ever increasing interest rates, it seems the shared option is becoming more attractive.

However there are disadvantages and possible complications. As NSW Law Society president Hugh Macken warns, all parties need to “plan for contingencies”, and that there needs to be a written agreement to avoid discrepancies when it comes time to sell or renegotiate mortgage terms.

For more information on our range of competitive home loans contact ALC on 1300 138 188.

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Interest Rates

Flood Crisis Leading to Interest Rates Increase

As the rain has ceased and the flood waters have begun receding, we as a country are starting to feel some of the affects from the flood crisis. At your local market you may have noticed prices in the produce section are beginning to rise and are becoming scarce. For example, mangoes are nearly impossible to find. Along with mangoes, tomatoes and lettuce have become more expensive. Other produce starting to see changes are zucchini, bananas, broccoli, sweet potatoes, capsicum and watermelons.

The major supermarkets, Woolworths and Coles, have released statements claiming they are in the process of identifying whether it is more cost efficient to start importing primary produce to avoid massive influx in prices. As these two supermarket giants control 45% of the fruit and vegetable sales nationally, they play a major part in the control over prices.

In addition to the immediate affect of an influx of prices, there is also key concerns on how the farmers will be able to bounce back to plant the winter staples such as corn, cabbage, potatoes and chillies. With the floods washing away the majority of the crucial topsoil, the forecasts are declaring all crops will be low this year.

If the prices on all produce does skyrocket and nothing is done to counteract this, fruit and vegetable prices will force inflation upwards. With the already looming rumours of interest rates increasing in March, the flood crisis will undoubtedly make those suspicions true.

With inflation around the corner, interest rates will move upwards which may affect your current mortgage or additional debt, such as credit cards or personal loans. In order to avoid this increase and lock into the lowest rate you can – you should look into a debt consolidation or refinancing your loans now while interest rates are still decent.

With a debt consolidation at Australian Lending Centre, you will be able to roll all of your debt into one loan on a fixed interest rate that will not be affected by inflation. Through this option you will also be able control and pay off your debts faster since you will be using one low rate and not focusing on various payments with varying interest rates.

If you want assistance with your debt call the Australian Lending Centre on 1300 138 188 today to speak with a debt consolidation consultant. Alternatively, fill out the enquiry form to the right and a consultant will contact you shortly.

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Refinance and Refinancing Home Loans

Advantages of Refinancing

Refinancing refers to the process of paying off your current loan with a second loan.  If the timing is right for you, refinancing can be a very beneficial exercise and may ultimately save you thousands. Learn the advantages of refinancing here.

When is the best time to refinance your mortgage?

Refinancing your mortgage works best when the interest rates are low.  If they aren’t lower than your current rate, then refinancing is probably not worth your while.  The idea of refinancing your home loan is for the likelihood that the monthly repayment amount will be reduced noticeably resulting in a considerably lower home loan repayment in the long-term.

How do you measure costs and advantages of refinancing my home loan?

There are advantages and disadvantages to refinancing your home loan.  The idea is to understand what you’re in for with your particular situation.  For some people, the best method when considering whether to refinance is a simple comparison.

Compare all the costs of your current home loan to the new loan over a future period.  Since the loan period may vary according to how steadfast your repayments are, just make the best guess as to how long you will have the new home loan.  If the total costs are going to be lower with the home loan, then you should refinance.

How much are you able to borrow by refinancing your home loan?

Most lenders will consider the following four aspects when assessing your home loan refinance application.

  1. Your ability to pay. It is important that you have a regular income.
  2. Your credit history.
  3. All other monetary obligations. It is important for a lender to understand your current financial commitments so that they can determine if refinancing is going to be the best option for you.
  4. The value of your property.  This is usually in the case of home equity loans.

The advantages of refinancing are astonishing, provided that the situation is right for a home loan to refinance.  What makes it stand out is the fact that it can cost you less compared to most loans and refinancing can be very effective to consolidate high-interest debts.

If you would like to speak with a consultant to find out if refinancing is the best option for you, please call 1300 138 188 today, alternatively fill out an enquiry form on the right and a consultant will contact you shortly for a free appraisal.