Categories
Personal Loans

How Interest Works on Personal Loans

In the past, most people would stay away from personal loans. Nonetheless, this has changed considering that you might get more convenient terms on a personal loan than on a credit card. In some cases, it might even help you enhance your credit score. That’s because personal loans are fixed-rate loans, whilst a credit card is conveyed as a revolving line of credit. Thereupon, from a credit score viewpoint, getting a personal loan might be more convenient. Nevertheless, it goes without saying that personal loans aren’t made equal. Each offer has a specific interest rate and fees attached to it. That’s why it is mandatory for borrowers to comprehend their features before shopping for one. We explain further below how interest works on personal loans.

Types of Personal Loans

When you’re shopping for personal loans, one of your priorities should be to assess the interest rate. Evidently, the interest rate might be convenient or the other way around. This will usually be dictated by a number of factors.

Secured Loans

First and foremost, you may choose between secured and unsecured personal loans. Now, if you wish to purchase a car or a large asset, a secured personal loan might work better for you. That’s because you may add the asset as security for the loan. In the event in which you default on the loan, then, the lender is entitled to repossess the collateral in order to sell it and use the money to recover the unpaid debt.

In this case, you might ask why someone would choose a secured loan over an unsecured loan. For one thing, secured loans are less risky for lenders. This safety net allows lenders to provide a better deal in the form of lower interest rates.

Unsecured Loans

On the flip side, if you are in need of some extra cash for an upcoming holiday, renovation, or debt consolidation, an unsecured personal loan might be a preferable choice. This type of financing doesn’t require collateral – making unsecured loans more flexible than a secured personal loan. The risk to the lender is significant and higher interest rates reflect this.

Types of Interest Rates

There are two types of interest rates – namely variable and fixed.

Variable Interest Rate Personal Loans

Variable-rate personal loans feature a rate that is likely to change during the lifespan of the loan. As a result, the amount of money you must repay on a monthly basis will fluctuate depending on the interest rate. This could be inconvenient for some borrowers, especially those that budget their finances in advance.

In plain English, if your interest rate diminishes, the monthly payment will be reduced. In the meantime, if the interest rate increases, this will increase the monthly payment as well. As a rule of thumb, variable interest rate personal loans tend to be more flexible and advantageous, providing a range of benefits and features.

Fix Interest Rate Personal Loans

Fixed-rate interest loans charge the same amount of money for the duration of the personal loan, so you don’t have to worry about interest rate fluctuations. The disadvantage to this that if the average market interest rate were to drop, there would be no benefit to you.

How Is the Interest Rate Calculated?

The type of loan you pick, as well as the type of interest rate,  will influence the amount of money you end up paying over the course of time. Still, aside from that, we’d like to briefly explain the elements that matter most when the interest rate is calculated.

How Your Credit Score Affects Interest

To start with, your credit score is the factor that matters most in the equation. Still, the exact rate you’re likely to get will depend on the lender. For one thing, how much you borrow and how often are factors that are widely considered by lenders. At the same time, your overall creditworthiness and reliability as a borrower are just as critical.

At the same time, if you decide to place collateral, you’re likely to benefit from a more convenient offer. Of course, the duration of the loan matters just as well. A loan with extensive repayment terms includes a higher risk of default; therefore, the amount of interest rate you’ll end up paying will be higher than in the case of a loan with shorter terms.

In summary

Bear in mind that the way in which lenders make a profit is by charging interest rates. On the other side, consumers want to get the best bang for their buck, and this makes sense – for both sides. A common-sense approach would be to do your part and research. After determining what lenders expect of you, try to enhance your credit rating and consider placing collateral if that can help you to get more beneficial loan terms. Get in touch with us for excellent loan offers for every budget!

Categories
Car Finance Tips

How to Get A Classic Car Loan on a Budget

Collecting classic cars is one of the costliest hobbies around and it is a little trick to get a classical car loan. The price tag on such a baby is sure to cause a panic attack in many people. People found ways of getting a classic car loan despite having a normal budget that in certain circumstances would destroy their dreams of being at the wheel of a vintage beast. If you’re aiming at getting a classic loan but your budget is nothing out of the ordinary, you might find this guide very handy. Let’s take a look at the steps you have to take in order to get classic car loans on a tight budget.

Classic car loan Guidelines 

Consider private lenders 

Credit unions and banks are not a good source of car loans, especially when you juggle with a couple of loans already. And even if they offer you the car loan you require, it will probably have a huge interest rate and it will be secured on your house. Private lenders, on the other hand, have a wide variety of car loans that come with affordable interest rates. What’s more, many of them are willing to tailor repayment plans for their clients.

You can find a private lender pretty easily. Just surf the Internet for a while and you’ll definitely find one. Stay away from lenders who ask for deposits or any other sort of down payment.

Hire a broker for your classic car loan

One that specialises in car financing, to be more precise; if you can’t seem to find a good deal, no matter how hard you try, such a broker can do some research and get back to you with one.

Moreover, a car broker can easily save you some funding, as well as the hassle of doing all the research on your own. Brokers collaborate with a lot of lenders. Sometimes you don’t even have to pay the broker because he works on a commission. In other words, if he gets you the dream-deal, he’ll get a certain sum of money from the lender he hooked you up with. This is how you save money by hiring a car financing broker.

Leasing

Tons of classic car enthusiasts choose to lease vehicles and then purchase them. This works perfectly for those people who can’t afford to buy a classic car with a down payment or can’t find a lender that’s willing to hand them some dough. After leasing, you can purchase that vehicle outright and you’ll know for sure how efficient the car is and whether or not it’s as worth it as you thought it would be initially. This is the best alternative to car loans you have (and the safest, to be completely honest with you).

A HELOC 

A Home Equity Line of Credit could actually provide you with enough funds to purchase the classic car you’ve been dreaming about for so long. Of course, you have to own quite a large, modern house that has a lot of equity in it. As you might know, a HELOC is a loan that’s secured on your house, which serves as collateral. If you fail to repay the loan, the lender can place a lien on it and sell it. The HELOC, therefore, should be your last resort. The Home Equity Line of Credit usually serves other purposes, but it’s totally possible to get a car with the money that comes from it.

Secured or unsecured

You’ll have to determine if you want an unsecured loan or a secured one. Under a secured one, you’ll get more money and lower interest rates. Under unsecured car loans, you’ll get a more limited amount of money and higher interest rates. But then again, an unsecured loan doesn’t pose a threat to your assets. If you fail to repay it, the worst thing the lender can do is to sue you. Keep in mind that he can get the right to place a lien on your assets even in this circumstance.

Extra caution is therefore advised. You certainly don’t want to be living in a Cadillac, as cosy as it might be. Think twice or even thrice about this issue and make a decision you won’t live to regret after a while.

Concluding Remarks 

Classic car loans are a great way of finding the car you want to get but can’t afford to purchase outright. Australian Lending Centre can provide some really valuable advice when it comes to taking advantageous car loans, as well as the financial products themselves. Make an enquiry on the website and you’ll most definitely find a car loan that suits all your needs and comes with an affordable interest rate and a good repayment plan. We hope you’ll get to be at the wheel of that shiny, vintage car you’ve been dreaming about for years on end.

Categories
Financial Planning

How To Create A Retirement Spending Plan

Learn how debtor finance can help you find retirement money and build its sources. A strong retirement spending plan can help you to enjoy the life you have worked so hard to build.

If you want to create a retirement spending plan, make sure that your expenses are lower than your income. But, if you have troubles in making ends meet, how will you do it? Good thing debtor refinance can help.

Retirement is something that you buy, that’s a fact, whether you agree with it or not. It’s a plan on how you plan to spend your retirement income. But how do you intend to spend money that does not exist?

Here are simple yet effective tricks to create a retirement spending plan when you have limited resources:

Add up your income

Everything that adds up to your wealth is considered an asset, including consistent income, but not those earnings that are not definite. For example, while you can expect tips as a waiter on a daily basis, you cannot count on them so instead of writing down the total tips you received in a month, just get the average tips. Here are common sources of income that you can include in the list:

  • average tips
  • alimony payments
  • bonuses
  • investment income
  • wages

Track down your expenses

Okay, you probably heard about budgeting a lot, and maybe you’re already fed up with the tips that budgeting is crucial to retirement savings. But, it’s a hard reality that we can’t do anything about.Include everything you spend for. When you add up monthly expenses make sure to include your average food bills, transportation, clothing, entertainment and utility bills. It is also important to take in your credit card payments, loan repayments and if you have a mortgage and auto loan payments, write them down.

Calculate the average expenses you incur each month

Even those things that you seldom buy, such as:

Household items, minor house repairs and clothes

For example, if you buy clothes every three months, get the average cost of the clothes and allot them in your monthly budget.

Don’t forget the add-ons

If you’re paying for self-employment taxes, business taxes and insurance, put them in the expenses list. You can also collect receipts, get a copy of your credit report and track how you spend your cash and borrowed money each month.

Review your debt and credit card statements

If possible, make it a habit to review your debit card records as well as your checking accounts. A lot of people have been surprised how much their money ‘vanishes’ each month, but they’re more stunned by how they spend it.

‘Pay’ your savings account

You only have two options, consider your savings as a top expense you can’t live without, or a debt that you have to pay for a very high interest. You’ll thank yourself later, especially when you’re too old to work.

Here are some barriers to creating a retirement spending plan:

Retirement is not something that people really look forward to

A lot of people have troubles saving for their retirement income. It’s because many people are not really looking forward to old age – the days and years where they will no longer feel in control of their finances. Who is excited to stay in a retirement home? But, if you change your perspective and consider retirement as a adventure, a new beginning that can give your life a new meaning, then it will be an exciting event that you will work hard for.

With a retirement spending plan here’s never ‘enough’ money to save

You have goals and you really want to put away the money for them. But, you have lots of expenses, despite a stiff budget. If that’s the case, why don’t you set up an automatic savings plan? This way, your money will be automatically withdrawn from your checking account and deposited in your retirement plan, savings account or investment accounts. While you can deposit the retirement savings yourself, automation will ensure that you won’t miss doing so. If possible, put all your bonuses, raises and tips to your savings accounts. Make it a habit to reduce your expenses and set aside money for the future.

You can also revisit your retirement spending plan once and a while to adjust to income changes and other conditions that may require additional expenses such as: illness, job loss and other money-related concerns.

Take advantage of the power of compounding interest

If you want to make your small investments large enough to cover your retirement expenses, it’s time to consider investments with compounding interest.

Any amount of money you put into real estate, bonds, stocks, cash savings, or a mixture of these financial portfolio, will work for you, given enough time. The interest on the money you invested and the accumulated interests will eventually increase the size of your savings account. The longer you invest, the bigger the pool of money for your retirement.

Do you need help in obtaining debtor finance so you can save for retirement? Talk to our trustworthy loan experts at Australian Lending Centre. Enquire now!

Categories
Financial Fitness

How Do I Fix My Credit Score?

A bad credit report can cost you thousands of dollars in interests, penalties and fees and many people have asked us “how do I fix my credit score?”. It may also block you from getting a promotion or possibly from getting a promotion or the best deals for a dream car. Here are tips to answer your question.

Request for free copies of your credit file 

…from the major credit reporting bureaus in the country. It is important to check your file if you want to start repairing your credit score.

Examine your files to know exactly the areas that you need to work on. For example, if you have a terrible credit history, it will be helpful if you can check which accounts you have missed paying, and when you started doing so. If you have done poorly because you always maxed out your credit cards, it may be time to refer to those accounts so you will know which card to stop using for the moment. At the same time, it would also help you check whether you have defaults on old accounts so you can settle them as soon as you can.

Dispute credit errors

It is your right as a consumer to get correct credit report. The law allows you to dispute errors by sending a dispute letter to the credit bureau that listed inaccurate entries.

Remember that errors are costly. They can seriously hurt your credit score and bring it down by over a hundred points. What’s worst, you may not qualify for low interest loans simply because of data entry errors or failure on the part of the creditor to update your credit information. It is also a good opportunity for you to correct wrong information that indicates identity theft or credit card fraud.

Minimise your credit card balances

Don’t go beyond 30 percent of your credit limit. Pay all your balances for the month, and when you use a card, make sure that you keep those card balances low to boost your score. If you are having a hard time in paying multiple credit card balances, you can get a personal loan to consolidate them—not only to boost your score but to save money on interests. It is also easier to remember repayment schedule because you only have one lender to think of, so your chances of missing payment is very low.

Lower your utilisation rate

It is not enough that you pay balances in full each month. If you have a higher utilization ratio than 30%, they will still add weight to your monthly balances. One of the best ways to deal with it is to make sure that you make multiple payments throughout the month, to lower your balance. But, not all credit card providers allow this. So, it is important to stick to your credit limit at all times.

Will paying nuisance credit card balances fix my credit score?

Do you have small balances on a number of credit cards and you haven’t paid them yet?

If you want to boost your score, eliminate all the balances on your cards. Instead of charging $50 on credit card A and another  $50 on credit card B, why don’t you just charge them all in one card with a low interest rate, and pay it all off each month?

Don’t get old accounts off your credit report

True, you want to get rid of negative items because they are bad for your report. But, your score will improve when the oldest paid account remains there. The old debt on your credit report like a mortgage or car loan is not bad, so don’t be in a hurry to get it removed from your file the minute you get your debt paid off.

Most of the negative items are really bad for your credit score. But, they just disappear from your credit file after seven years so don’t argue to get your old paid accounts eliminated from your file. Even if it showed that you missed a lot of payments—just keep them there. At least, you were able to show that you managed to repay after all.

Then of course, there are good debts. A good debt is the account that you’ve handled well and paid on time. When it appears on your file—your score will be better simply because you have a long history of good debt. Lenders will also look at your application favorably knowing that you have been a responsible borrower for a long time.

How do I fix my credit score when I have good and bad debts?

In a nutshell, leave your old debts alone, pay all your balances. Don’t close accounts, especially those where you had solid repayment record—because it will eventually boost your score and increase your chances of getting favorable loans. For a shortcut to fix credit history, contact Clean Credit.

Categories
Financial Fitness

When your credit file is filled with unpaid defaults

This article discusses ways to repair your credit rating by removing unpaid defaults. Are you experiencing financial hardship? Is this leading to unpaid defaults? You are not alone.

Identify the reasons why you have unpaid defaults

Understand that life happens and sometimes, you must deal with financial setbacks. Loss of employment, illness and relationship breakdowns may make repayments difficult.

In other instances, it could be as simple as poor bookkeeping practices, not keeping your receipts, moving to another address or data entry issues on the part of your credit provider. But whatever the reasons are, don’t let them deter you from pushing for a stellar credit rating.

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

Clean up your credit file

The best way to do this is to simply update your payments. You may think about debt consolidation if you have multiple credit card debts and other consumer debts. You can get a new loan to pay off all your debts. By doing this, you can reduce your monthly payments, possibly reduce the overall cost of the loan and simplify your payment. It could help you build up your credit again by reducing your debts and making it easier for you to pay on time.

By fixing your impaired credit file, it would not only become easy to obtain finance but cleaning up your credit file can also give you a wider range of lending options. Remember that lenders approve clients based on their borrowing capacity.

This refers not only to their ability to repay their debts but also to their credit score. You may also qualify for low-cost loans which may not be possible if you have a poor credit score unless you opt for specialized lenders who provide affordable loan products for bad credit borrowers.  Of course, the interest you pay on a loan would dramatically decrease as well.

Request a copy of your credit file

You can request a free copy of your credit file from the major credit bureaus in the country. Check them for errors, and if you see inconsistencies or inaccuracies. Sometimes unpaid defaults on your file are a consequence of an error made out of your control. You can file a dispute at the credit agency involved.

Or, you may also file a complaint with your credit providers and ask them to update the report.  Sometimes, there are unjust listings or mistakes due to human error. So, make it a habit to ask for a copy of your credit file each year so you can easily contact the creditor concerned and talk over the issues with them.

While it is possible to directly file a dispute with the reporting agency, they will not remove the negative entry without the approval of the creditor or at least valid proof that the entry is erroneous or inaccurate. There are also credit repair specialists that remove defaults on your credit file.

Consolidate your loans

You can apply for a second mortgage to consolidate all your high-interest loans into a single, easy-to-pay loan. You could save money on unpaid interest and late fees by rolling all your debts into one. It is also a lot easier to remember because you only have one due date to recall each month.

If you’re still unsure whether you can make timely payments because of your busy schedule—you can automate payments to ensure that you can pay on time.

This will not only clear up your old debts and help you start with a clean slate—but debt consolidation can also help you rebuild your credit score fast your potential lenders would also see the improvement on your borrowing habits and you are most likely to qualify for low-interest and bigger loans in the near future.

Develop good financial habits to prevent unpaid defaults

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

You can stretch out your dollars and avoid debts by sticking to your budget. Budgeting is important not only for low-income earners but for high-income earners as well.

It is important to make the most of your incoming savings so you have some money to tap into when emergency situations like car repairs, urgent home renovation hospitalisation arise. By doing so, you can avoid being chased down by debt collectors for your unpaid defaults and you don’t have to rely so much on another loan to bail you out.

Categories
Bad Credit Loans

No Guarantor Bad Credit Loans Explained

Having bad credit can be stressful. That’s because a bad credit history has immediate consequences on your financial future. It impairs your ability to get a home loan, a personal loan or any other form of credit. If you’ve defaulted on loan repayments, applied for a credit card or entered a debt agreement, all these aspects can significantly affect your finances for years to come. Fortunately, no guarantor bad credit loans are a possibility. Find out your options below.

How can I get approved for bad credit loans?

Obviously, there are some things you can do to maximise the likelihood of getting a suitable loan, such as the following:

Avoid making numerous credit applications simultaneously

This may seem like the guaranteed way to obtain a loan; in fact, the more applications, the higher the odds of getting a loan, right? In fact, that is far from being true. This is a red flag to lenders, even for those who provide bad credit loans. This strategy could deter you from accessing credit in the future. If you already did that, you should at least wait for a while until you make other applications.

Use a personal loan calculator

Personal loan calculators can be genuinely helpful. You can use one to determine if you can afford to make repayments for a certain loan or not. Bear in mind that lenders will accept your application only if you have the financial means to make repayments. This applies to both bad credit loans and conventional loans.

getting-loan

Check your credit score to know where you stand

Let’s say that you already know that your credit rating isn’t the best. However, we advise you to have it checked. This way, you can verify your standing point. Apart from that, your credit rating may contain mistakes and inaccuracies. In this case, you can have them corrected.

What are my loan options if I have bad credit?

If you want to get approved for bad credit loans without a guarantor, this reduces your options. The primary reason why it is recommendable to opt for guarantor loans is that this increases your reliability as a borrower, maximising the likelihood of obtaining the desired financing. However, you can also opt for the following:

Secured personal loans

An option would be getting a secured personal loan, involving collateral such as the equity in your home or another significantly valuable asset. This way, a lender would be more willing to provide you financing, overlooking the negative listing on your credit history.

However, the obvious risks that come with the territory are that if you default on the loan, you’ll end up losing the asset placed as security. Even so, without collateral and guarantor, your chances of getting a loan are minimal, unfortunately.

Short term loans

If you want to borrow a fixed sum, up to $2,000, you could pick a short-term loan from a payday lender. The thing is that these lenders don’t concentrate on your credit history. In fact, they are much more focused on your current financial possibilities and capability of making repayments.

check-options

What Else Should I Consider?

It’s important to note that bad credit loans with no guarantor are high cost. This is a general rule. So, you should know what to expect if you do decide to go for it. Obviously, these loans involve high risks for the lender. Therefore, it makes sense that the lender would charge enormous fees.

And lastly, bear in mind that numerous disputable lenders operate in the realm of bad credit loans. In other words, you should pay attention to scammers that might claim to solve all your financial difficulties, irrespective of their severity.

So, we strongly recommend you to double-check each loan and its specifications noted in the fine print before signing any documents. ASIC has actually warned Australians that they should be doubly wary when it comes to applying for bad credit loans due to the high-interest fees and inflexibility. Apart from that, the repayment period could be shorter than in the case of conventional loans, which would make it even more challenging for you to deal with the situation.

Additionally, make sure you factor in the additional fees, which are added to the costs of the loan, aside from the interest rates.

Conclusion

When you apply for a no guarantor credit loan, you should be wary and attentive to the loan terms. If your financial position allows you, you should wait a while until you may afford to get another type of loan, to avoid paying a significant amount of money in interest fees and other charges.

By all means, choose a reliable lender. On that note, contact us for a free consultation and assessment for your loan enquiries as our experienced specialists are keen on helping people with bad credit and provide them with excellent services. Call us now on 1300 138 188 or enquire here for our bad credit loan option today.