Tag: Non bank lender

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The difference between Non-Bank Lenders and Traditional Lenders

banks vs non-bank lenders
banks vs non-bank lenders

Years and years ago, if you needed a loan, you went straight to the bank to assess your available options. These days, non-bank lenders have emerged, offering a legitimate alternative to traditional lenders, and adding a competitive edge to loan marketing.

Depending on your circumstances, it may help you to step away from traditional lenders and hunt for a non-bank lender. But do you know exactly what the difference is between non-bank lenders and traditional lenders?

We will take you through both options and look at exactly how they differ in terms of what they offer to you, so you can judge which one would best meet your current needs.

What Are Non-Bank Lenders?

Essentially, non-bank lenders are exactly what you think. Non-bank lenders are alternative lenders who are not traditional banks. They don’t have a banking license and are not a mutual, ie a bank, a building society or a credit union. Nonbank lenders are called Authorised Deposit Institutions, or ADIs.

Unlike banks, they can’t accept deposits, so they have to source their money from elsewhere. They often take out a loan from the bank at wholesale rates and then lend this money on for a profit.

What are Traditional Lenders?

Traditional lenders refers to banks and other ADIs defined above. They have been the source of loans throughout history, and only recently has this turned around with the proliferation of non-bank lenders entering the market.

They are regulated very differently to non-bank lenders. Banks are largely regulated by the Australia Prudential Regulatory Authority (APRA), while non-bank lenders are regulated by the Australia Securities & Investments Commission (ASIC).

Benefits of Using a Non-bank Lender

While choosing to go with a non-bank lender may not be the obvious choice, there are a number of benefits that come with using one.Lower interest rates: They borrow their funds at wholesale prices, which offers them a larger margin to work with than the banks, and can often mean they have lower interest rates than the banks. They also have limited fees as they don’t have any of the overhead costs that traditional lenders face.

Regulations: being subject to different regulations means non-banks are often a lot more flexible when it comes to lending. This enables them to tailor the process to specifically meet your needs.

Take on high risk

Whether you have a bad credit history you are trying to repair, or a business start-up, non0bank lenders are more likely to take a risk on you than traditional lenders.

Better customer service

As they are smaller than the banks, non-bank lenders often offer a more personalised approach to their customer service, so you will receive more attention to your loan and what you want out of it.

Lower down payment requirements

While banks take about 20% down payment on mortgage loans, non-bank lenders take a lot less, sitting at about 3.5%. For those who have been turned away by the bank, this is a great option to make owning their own home a possibility.

Faster approval process

With fewer hoops to jump through, non-bank lenders have a much faster approval process than traditional lenders, so you have the money in your hands even faster.

Specialists

Often, non-bank lenders can specialise in a particular loan. While traditional lenders offer an array of financial services, by specialising in just one, non-bank lends have a greater insight into that type of loan and can help you out more.

Benefits of Using a Traditional Lender

There are also some benefits that come with using a traditional lender that shouldn’t be overlooked.

Security

One of the biggest, is course, security. The banks are well-established institutions with a degree of trust built into their name. Many people feel safer with this option and sticking to what they know – especially if they already bank with them.

Less vulnerable

As banks are much larger than non-bank lenders, there is a perception that they aren’t as vulnerable to any economic hardship that may come about.

Which One Is Right For Me?

Many people perceive that traditional lenders are the best and safest option, especially when it comes to taking out a big loan, such as a home loan. This just isn’t the case anymore, and by not considering all your options, you are limiting yourself and potentially missing out on the right fit for you.

Loans Based Upon Your Unique Situation

Working out which option is best for you really does come down to your individual circumstances. You need to make a choice based on what you need the money for, what your credit situation currently is, and which service is more compatible with your needs. Shop around and find the best option for you.

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Private Lenders

What Are The Benefits Of Using An Alternative Lender?

what are the benefits of using alternative lenders

Following the GFC, banks became very cautious with how they lend their money. They didn’t lend to certain borrowers particularly those with bad credit or small businesses – in the fear that they would not be able to get their credit back. As a result, many businesses fell into bankruptcy because they had no one to turn to for financing.

If you’re looking to start a business, it can be even more challenging to secure financing from a bank. To get your business operational you may need some sort of finance. This is because you cannot start a company without the necessary capital to sustain it. When banks close the door your business dreams, just remember that it is not over yet. Aussies have one more form of financing that they can use – and that’s alternative lending. Slightly different from the traditional bank, alternative lenders have become quite an attractive choice for those that are in need of a loan.

What Is an Alternative Loan?

Alternative loans are the kind of businesses that aren’t provided by traditional lenders – for example, banks or credit unions. Examples of these kinds of loans are private loans, bad credit loans, wholesale funds, peer-to-peer loans, start-up loans, and so on.

Each of these loans has its own terms and conditions – which is why you must research accordingly. Depending on the lender, you might be asked for a higher interest rate, or given a smaller loan amount. But depending on your preferences, you will choose the one that is most suitable for you. Overall, alternative loans offer a second chance at finance.

Why choose an Alternative Lender?

There are various reasons why you might want to go for an alternative lender.

The Application Process Is Quick and Easy

Every alternative lender will have a straightforward loan application process. Technically speaking, all you have to do is provide some basic contact (or business) information, along with some financial data. A lender will need to quickly assess your financial situation to see whether they have the right loan product available.

Depending on the lender, you can expect to have your application completed in as little as 15 minutes, provided you are working with a tech-savvy lender. If you are borrowing online, it is even more convenient, as you will not have to get out of the comfort of your home in order to make the application.

Funds can be released quickly

It takes a few minutes to a few hours for your application to be approved – all depending on the time at which you make your request. The quicker that you work with the lenders, the faster you can get your funds. At the Australian Lending Centre, we offer an easy way to upload your documents. It takes a matter of minutes and can be done from your mobile. From the moment your application is approved (assuming it is), it can take as little as 24 hours for the money to appear in your account (depending on the lender)

Some lenders do so in 48 hours, but this is still the better alternative to traditional banks, for which you will likely have to wait entire weeks. This way, it will be much easier for you to start off with your projects right away.

You May Borrow with Bad Credit

If you have no credit or bad credit, there is a high chance that banks will not lend you money. They will see you as a red flag – and they will believe that you will not be able to make your payments on time. Unless your credit is above a certain number, there is a high chance that your request for a loan will be denied.

However, alternative lenders such as Bad Credit Loans generally have far fewer requirements. Whilst they still asses your finances, they will still lend to bad credit borrowers. Therefore, if you had trouble making timely payments before or had no luck with traditional lenders, then there is a high chance that you might be luckier with an alternative lender.

You May Use the Funds However You Want

Certain lenders expect that you use the funds that they give you in a particular way. For instance, if you are the owner of a construction company and opt for taking out a business loan, then you need to specify what you plan on doing with that money. As an example, you have to specify in the application that you need the loan to buy a bulldozer – and the lender will know that your profits will start growing with that purchase.

However, with alternative lenders, this will pose no problem. For all they care, you may use that money to buy a bulldozer, pay old Jim’s paycheck, or purchase a new fancy pen for the office. Obviously, you will use that money wisely – but what matters here is that the lender won’t set conditions on how to use that money.

Should I use an alternative lender?

Alternative lenders represent a very convenient solution when you are running low on money, but the banks won’t give you a loan. Alternative lenders offer people who have been refused in the past with a second chance at finance. All that you have to do now is find the right lender that will provide low-enough interest rates.

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Fast Loans

Why You Could Afford Same Day Cash Loans

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Are your personal finances looking rather blemish?  Fortunately, you are not alone. Thousands of Australians get caught up with their finances. Do you need money right away to pay for rising electricity bills, an overdue credit card or the mispayment for after pay?

Some people have insufficient income; others are in between jobs while some people simply need to keep up with their rising business expenses. The fact is that sometimes we need money, and we need fast and flexible options. Same day cash loans with no credit check can help you get a grip of your financial situation and brighten it all up.

Whilst a loan may seem like a daunting option, it can be the saving grace. Managing and planning your small cash loan, can help you regain control and get back on the financial road to success.

Here are smart tips to manage your same cash loans wisely

Develop a desire to break away from a life of scarcity

Every problem is an opportunity to make that big step in life. Getting a loan is the first step to financial control. There are times that you may find yourself not getting enough money from your income sources.

Some projects don’t end up successfully and there are also life-emergencies that you need to deal with. But, it is the desire to be stable that can promote you to become productive and creative with your finances. At the same time, prepare yourself for a little discomfort. The road to success may not be smooth. In fact, you have to get out of your comfort zone so that you can use the challenges that come along your way in order to become financially stable.

Start budgeting immediately

There is no ideal time to start a budget. Once you decide to keep your expenses at bay, creating a budget becomes an urgent necessity. Write down your cash flow, assets, and liabilities. Allocate the money to your priority expenses. Make sure that you leave something for your daily expenses; otherwise, you may have to take out another loan just to get by before the next payday. Budgeting planners can make it even easier to visualise where your money is coming and going.

It is also important to consider your smart goals when making a budget. Remember that loans don’t make you rich, but it can make you worse off if you know how to use it. Debt is considered as a money management tool.  All it takes is intelligent goal setting and follow-up intervention to adhere to the plan.

Your budget can serve as a wealth management structure that helps you maintain financial discipline along the way. Don’t be afraid to set aggressive financial goals, as long as they are realistic. You must be able to confidently stick to these goals.

Work through these goals with a sense of urgency. Don’t put off budgeting for tomorrow – no matter how tempted you are to do so. You can maintain a logbook, to jot down all your daily financial activities. Note the expenses and debts you settled for the day and their value of importance in your daily life. This way, you can monitor your progress and evaluate your plans of action. In a month, you will already see how much of your plans are actually being carried out and which ones are not working. If you are moving in the right direction, your goals are realistic and obtainable.

Practice makes perfect

Develop the tools and learn how to succeed financially. When you can’t quite reach your goals the first time, keep trying. As long as you do your best, repeatedly, to make your budget work, you will definitely get better in time. Incremental changes are also worth celebrating. Small changes daily will make little gains and those steps will add up as you keep doing the work.

To be truly successful in budgeting and debt repayment, you need to have exceptional discipline and perseverance. Commit to live within strict budget constraits is crucial to living within your means. Don’t spend money your don’t have and you won’t increase your debt. By following your own budget, you’ll likely to have reduced debt, and you will also feel a high degree of satisfaction for being able to stick to your financial plan.

Financial stability is a goal we can all achieve

Stable finance is a goal we can all accomplish. Australian Lending Centre could provide a same day cash loan with no credit check if you qualify with our requirements, regardless of your credit score or the absence thereof.

We understand that people need financial opportunities to start or build a good credit file and a chance to improve their finance by way of a loan. If you are willing to learn the right ways of setting up a business, or for managing your debts and increasing your revenues, Australian Lending Centre can help you.

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Financial Planning

Tips to Manage Financial Challenges

family facing financial struggles

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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Business Loans Financial Fitness Financial Planning Low Doc Loans Self Employed Short Term Business Loans Tax Debt Loans & Relief

Questions for People Applying For Business Loans

Questions for People Applying For Business Loans

Are you applying for a loan so you can start your own business? Here are five questions about business loans to help you make the right decision.

Am I a manager or an entrepreneur?

Entrepreneurs and business managers face almost the same stress when it comes to operating a business. But the two are on opposite sides of the spectrum. They’re different. What is the difference? A manager operates an already-established business. They may not be the people who started it and founded it, but they are the ones who own it at the moment. A manager also has to make sure that the challenges the business faces are handled properly. He also has to hire and retain hard-working employees, know the niche their business in focusing on, and be able to improve whatever needs improvement.

Entrepreneurs Are The Innovators

An entrepreneur, on the other hand, is the one who creates the business. He looks for opportunities that are what the market needs, and converts them into a business plan. A real entrepreneur has the eye to identify opportunities needed in the market and also has the ability to turn those opportunities into businesses.

Managers Are Effective With Day To Day Operations

If you think you can be an effective manager but you don’t have the enthusiasm to start everything from scrap, you might consider franchising. It doesn’t involve the stress of putting up a new business altogether and you have tried and tested marketing methods and business plan to help you get started. But, if you think you have the heart of an entrepreneur, go for it! Get the business loan you need to kick start your business and you will surely beat the odds and succeed in your business.

What is my business model?

This is one of the questions about business loans with high importance. Are you putting up a home-based business, an online business or a traditional brick and mortar business that requires a good location?

Create a Business Budget

Create a business budget before you fill-up the application loan. It is important to include the annual budget for the upcoming year, based on the current year’s expenses. When making a budget, don’t forget to review you’re the actual expenses versus the budgeted amounts for the past two years of operation to get a good idea of your average income and expenses.

No Guarantees on Sales Forecasts

While it is important to make a sales forecast, bear in mind that you cannot guarantee the exact sales volume. So, when coming up with a budget consider your past expenses and profits as well as your realistic sales forecast.

Business Expenses

Create a ledger are of your business expenses based on your business model. For example, list fixed expenses such as:

  • administrative expenses
  • marketing expenses
  • payroll
  • rent or mortgage
  • utilities

These amounts are fairly consistent each month regardless of your sales volume. Don’t forget to include the list of variable expenses —or those that fluctuate each month. These include raw materials, inventory and manpower.

Is Self-Employment good for me?

Self-employment is starting your own business- with your own finances, own plan, own budgeting, own everything. Now it also has its own pros and cons like everything else. Being able to own a business may sound quite great at first. But sometimes, it gets tiring when you’re the only one working. Independence is a good thing. You wouldn’t have to rely on anyone else, which minimises the possibility of small quarrels between co-owners.

Are You After Fame or Freedom?

If ever your business becomes known, you’ll be known as the person who single-handedly founded your company. This is actually a great advantage. Imagine, being the only one who founded a huge business? That’s a big deal. To other people, owning a business means being able to control whatever happens in their lives. That’s what we all want right? Freedom to do what we want, say what we want to say.

Being Independent

The search for independence has struck many – this is the reason why the majority now wants to start their own business, for them to have more control over their lives. However, drawbacks exist- such as payoffs.

Loans Give Your Freedom To Chase Goals

When you have access to business loans, regardless of your credit score, you will have the freedom to set your goals.  It is also a good motivator to track spending—knowing that when you do, you’ll be an inch closer to the accomplishment of your goals. Finally, it is a good source of emergency funds. You can cover up to 3 months of working expenses in case you hit an unexpected situation.

Finances are the biggest sources of conflict

Financial issues are one of the commons sources of business conflicts-either with business partners, with suppliers or clients. That’s why it is important to have easy access to business loans to ensure that your business will go on as usual despite financial crises. But, you have to be careful with whom you borrow money from—a good lender would want its clients to move ahead in life. They will not charge hefty interests and unreasonable fees for a small amount, Look for a reputable lender that allows you to grow your business while you can comfortably repay your loan.

It’s common to have questions about business loans. After all, it’s a big decision which does come with risk. However, business loans can also bring great reward. Australian Lending Centre can provide the financial assistance that you need to push your business forwards.

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Personal Loans First Home Buyer Home Loans

Reasons to Pay Arrears with a Personal Loan

personal loan for arrears

Understand the main reasons why you should pay your arrears even if it means getting a personal loan to do it. We will also discuss a few tips on how to use your loans wisely to avoid getting into debt all over again.

There can be some confusion as to the differences between arrears and defaults. In simple terms, when fail to pay your mortgage, you call the unpaid balance, ‘arrears’. It’s ‘default’ when you missed payments on other types of credit—such as credit card or personal loans. Here are some of the most practical reasons why you should immediately settle your arrears—using a personal loan:

Save money on your growth asset

When you pay your arrears you are protecting your home equity. Instead of losing your home, why don’t you just pay your dues and enjoy the benefits of having a home which could increase in value overtime. Plus, you can also use a portion of you loan to make some improvements to increase your home’s fair market value. This is particularly advantageous for those who have obtained their first or second mortgage at a lower interest than the prevailing rates.

It protects your borrowing power

When you take out a loan, it has to be repaid at all cost. You will have to pay a fixed rate or variable interest rate on the loan. Since you put your home as a security to the loan, you have to give it up when you do not have enough money to pay your dues. When that happens, your borrowing power would diminish.

It is too difficult to obtain a mortgage when your home has been foreclosed because of unpaid monthly repayments.

Your home is one of the biggest financial resources. By building your home equity, you can also build up your wealth. You can take a home equity loan and use the proceeds to start a home small business. In addition, many businesses also start from home. You can take advantage of the fact that you don’t have to rent a business space nor commute. It offers flexibility and the perks of growing your business around your family.

You can build income overtime

By building your equity, you are producing wealth while literally living inside your investment.

When your neighbours of friends who are working from home think that their business outgrows their working space at home, you can offer a portion of your house as an incubator space or a co-working hub. Not only will you increase your home’s value, but you will also boost your income while helping other people establish their businesses.

Here are tips when using a personal loan to pay arrears:

Determine the exact amount of money you need

It’s not how much money you want, but how much do you need that really matters. Some borrowers waste money on unnecessary things because they fail to determine how much they really need in the first place. Take the time to pin down your intended loan amount, as accurately as you van before you fill out the application form. But, don’t forget to allow for contingencies, as emergencies may happen. While you should not borrow too much, it must also be enough to cover not only the arrears but other things that could put you in a much better financial position. Borrowing an exact amount may put you in financial trouble especially if you don’t have a backup plan on how to repay the loan when your income decreases or when emergencies arise.

Ask yourself how you will use the borrowed money

Though lenders offering personal loans will not ask you where the money is going, you must specifically know what it will be spent on to avoid wasting it. Simply saying, “to pay arrears” does not give you a specific guide on how to spend it wisely. List all accounts where you have arrears and if possible, include unpaid credit card balances and other debts that charge high interests. It is also important to put aside a certain amount for your emergency fund so you have enough money to cover contingencies when they arrive—and you won’t have to go back to your lender to borrow money again.

When will you pay the loan back?

You will need to decide how to pay the loan back and how will you pay it. Do you have a conservative cash flow projection? Do you have the capacity to pay back the loan, based on your current income or business standing? Will lenders approve your loan even if you don’t have adequate collateral to pledge? Make sure that you make the right decisions when getting another loan. It can save your assets for now by paying your Home Loan Arrears, but you can still lose them if you don’t establish your finances as soon as possible.

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Personal Loans Home Loans News

Mortgage Broker vs. Banks: Which Is Better?

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The verdict of a mortgage broker vs. banks contest may seem difficult to assess at first glance. Both can help you with good rates on your home loan, but there are some things they do differently. Maybe, after all, you’ll be the one to say who the winner is in the mortgage broker vs. banks competition.

Mortgage Broker vs. Banks – What Does a Broker Do?

A mortgage broker is fundamentally an advisor. This is the person that will investigate whether you are worthy of a loan or not. You guessed it – your credit score matters, but that’s not all. Your income and, subsequently, your ability to pay the loan back will be taken into consideration, as well. If you are eligible, the broker will look for the best offers that suit your needs.

The greatest advantages of using brokers instead of banks are their expertise and the fact that they may not frown at your bad credit. They know a lot of other lenders that can provide you with suitable offers. Because they are not affiliated with any banks, they are sure to find lenders that don’t really care for your stained credit file. They may even be specialised in serving people in predicaments. This particular section in the mortgage broker vs. banks contest is definitely won by the former.

A mild disadvantage when it comes to brokers is their number. There are so many that it may be difficult to choose the best one. Before you call on an agent, make sure that he has been in the business for a long time. Simple research can be very useful. Friends or relatives that previously used brokers to get good deals can also guide you.

What Do Banks Do?

In the same fashion, banks will assess your creditworthiness by having a bank loan officer to manage your files. Banks are often scarier than brokers because of the higher rates and fees. Loan officers have years of experience in banking and finances, in general, so you can rest assured that you’ll get the best rates.

Although banks are not inherently bad, they might prove to be an actual impediment in your way. In contrast with the brokers, banks always look at your credit score. They are not that eager to lend money to people who have a bad credit score.

Another disadvantage is that when you work with a bank, you will be given only the loans that the particular bank is offering. On the other hand, a broker can have access to a wide variety of lenders and loans.

Which One Is Best?

Both have their advantages and disadvantages. If you have bad credit or you want a wider array of options, a mortgage broker is a perfect choice. If you have good credit and the offers of the financial institution would suffice, a bank would do as well.

In other words, the verdict on mortgage broker vs. banks depends on your needs, the cleanliness of your credit and the deal you are trying to get.

If you still have questions, read more about non-bank lenders HERE.