Tag: personal finance

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Personal Loans

Questions to Ask When Applying for a Personal Loan

personal loan

Whether you want to go on a holiday, pay for medical bills, buy a new car or renovate your home, a personal loan can help you achieve whatever your goals are. Before you jump right into a fast loan application, it is important to ask the right questions. We’ve mustered up a list of some key questions to ask when applying for a personal loan.

Here are 4 questions for those considering personal loans

Is it the right loan for me?

People use personal loans for various reasons. Before you apply for one, determine whether or not a personal loan is the right loan option. Some of the main uses of a personal loan include;

  • Paying off medical bills
  • Car repairs
  • Home renovations
  • Wedding
  • Debt consolidation.

Compare loan products and make sure that your choice can serve your needs better. For instance, you could take out a debt consolidation loan instead of a personal loan to pay off your existing debts. If you want to renovate your home, you can tap into your home equity and possibly get a better rate than a personal loan. Research is therefore key.

What is my borrowing capacity?

One of the first questions to ask when applying for a personal loan is how much can you borrow. As with any loan, there is a borrowing capacity for each individual. Whilst personal loans are typically smaller in size, in comparison to a home or business loan, there is still a limit as to how much someone can afford to borrow personally. This limit will depend on various factors including income, expenses, debt, residency status and credit score.

So, before you rush into applying for a personal loan, you should consider establishing a budget. Determine how much you can afford to borrow by looking at your income and expenses. Use this handy online calculator to quickly create a budget plan.

Am I choosing the right lender?

There are many financing sources that offer personal loans and each source has its own range of interest rates, and terms vary. Find the best lender that fits your needs by shopping around.

Here are some tips in finding the right lender:

  • Start by asking someone close to you that has recently secured a personal loan. See if they can recommend their financing institution. You can also ask a financial adviser, to give you a shortlist of referrals.
  • Visit your lender’s website and investigate their offerings for details. At the Australian Lending Centre, we have loan experts online to tell you about the basic things you need to know about our loan products. We believe that advertising is glittery; so we will help you look beyond the advertisement and find out about eligibility requirements, fees, and other features of our personal loan product. Don’t be afraid to enquire online. We’ll explain to you the best options available, without placing a credit enquiry on your credit file.

Finding the right lender can help you get the most favorable loans to finance your needs. Remember that personal loan lenders not only originate, process, approve and close your loan application but also participate in one of the most important financial decisions you will make.

What are the terms of the loan?

Look into your obligations whenever you apply for a loan. Always read the fine print and ask for a full disclosure of the terms of the loan before you sign it. Don’t forget to ask about the monthly payment, the term of repayment, late fees and penalties for prepayment. When the lender offers lower interest rates, check on the origination fee that can eventually hike your interest rate.

What are the fees associated with a personal loan?

Find a lender that is transparent with their loan services. Make sure to look out for the establishment fee, servicing fee, early exit, early repayment and insurance fees. The last thing that you want is one of these hidden fees appearing in the fine terms of the terms and conditions. Take the time to consider these fees when assessing your personal loan options.

Are there different types of personal loans?

Personal loans can come in two main forms; secured or unsecured. The type of personal loan that you are offered will vary depending on each individuals personal circumstances and eligibility criteria. A secured personal loan is one that is guaranteed by an asset. The idea behind this is that if you default on your loan, the lender can take the asset if you default on the loan. Collateral can include anything from real estate property, motor vehicles or other property. This will vary depending on the lender.

What is my credit score and can it impact my chances of loan approval?

When was the last time you checked your credit score? Do you even know what a credit score is? If your answer to both questions is known, then you really need to quickly learn all about this. With lenders now stricter than ever, your credit score can directly influence your chances of being approved for a loan. Lenders will look at your credit file to assess whether or not you are capable of repaying a personal loan back. With the comprehensive reporting system in place, lenders can also look at your repayment history to see if there are late repayments. All this along with defaults, blackmarks and court judgments can be assessed by a lender.

Checking your credit score is, therefore, one of the most important things to do before you apply for a personal loan. Fortunately, you can access this online through credit reporting bodies such as Equifax, Ilion and Experian. At the same time, you can have a credit specialist assess your credit file for a small fee. Repair agencies such as Clean Credit offer a comprehensive analysis of your credit file.

How often can I make repayments on my personal loan?

One of the more important questions to ask when applying for a personal loan is how often can you make repayments. Depending on the lender, you have various choices of repayments. Whilst traditional lenders such as banks are typically stricter with their repayment policies, alternative lenders are not. Lenders such as Australian Lending Centre and Bad Credit Loans offer customers weekly, fortnightly or monthly repayment terms. So, before you apply consider how you will be making payments. If for example, you are paid on a monthly basis, it may be more convenient to make monthly payments. In this case, find a suitable lender.

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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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Personal Loans Business Loans Financial Planning Short Term Loans

Top Methods of Getting Personal Loans from Private Lenders

getting personal loans

Every individual or family may need personal loans from time to time. It may be for various reasons: the car broke down, the house needs some renovations, or their daughter is planning to get married in Spring. Regardless of the reason, money is needed as fast as possible.

The problem is that options such as credit card debt or bank loans aren’t always available. Once more, reasons may vary. It may be because you built up too much bad credit or you have no collateral to attach to the loan.

In these cases, a personal loan from a private lender may look like a very good option. They are fast, easy to access, and may overall improve your financial situation. And this article will tell you the top methods of getting a personal loan from a private lender.

#1: Figure Out If a Private Personal Loan is Your Best Option

Before going for personal loans, you need to learn the difference between public lenders and private ones. For one, private lenders aren’t banks, credit unions or financial institutions. They are simply individuals (or companies) with no attachments to a certain institution that lends money to other people. Those who receive a loan from a private lender usually have a certain relationship based on trust.

A personal loan taken from a private lender is different from other types of private loans, in the sense that you don’t need to specify why you need a loan. On the other hand, public lenders will categorise the loan based on your needs: student loans, car loans, mortgage loans, etc.

Keep in mind that personal loans are very different from payday loans. A payday loan will have to be paid very fast – usually within the first two weeks – and they carry a very high interest rate. A private personal loan will have a longer time frame and a lower interest rate – but will still be higher than the one offered by a bank.

There are also risks to personal loans from private lenders, such as shorter payback periods or costly fees. Most will require collateral to secure the loan. If by any chance, you find yourself unable to pay the loan, the lender will be entitled to sell that property to get his money back.

#2: Consider the Alternatives

The most important part of getting a personal loan from a private lender is knowing that there are other options aside from them. If the return of your purchase makes your loan worthwhile, then getting personal loans from a private lender might not be such a bad idea.

Still, before going for a personal loan, you may want to check whether you can use cash to fund that purchase or not (or at least some of it). This may reduce the costs in interest, resulting in a much smaller loan.

You may also want to evaluate all your alternatives. Consider opening a line of credit, or getting a public student loan. If the interest rate is more beneficial for you, there’s no reason for you to take out personal loans. Only do so once you’ve burned out all the other options and know for sure this is your best opportunity.

#3: Access Your Options for Personal Loans

When opting for personal loans from a private lender, you need to do your research on the options that they provide. You may want to focus on lenders that are accredited or have been approved by the government.

You can go for individual lenders or companies. Browse through your options, and see which one is a better way to start. After learning of all the options, you may settle on the one you believe is more convenient for you.

You should also try contacting your family, friends, or business acquaintances. They may be able to offer you a personal loan quickly, with a smaller interest rate. Still, you may want to make sure that there is also a written agreement next to your verbal one. And you should keep in mind that failure to repay this loan can result in damaging your relationship with your lender.

Once you have explored all of your options, collect all the documentation that you need. You need to appear as creditworthy as you can. Show your income sources, your savings, or any physical assets that you use to secure your debt.

Final Thoughts

Personal loans from private lenders can be tricky to deal with – but they are also convenient if bank loans are not an option for you. All you need to do is research your options and come up with a convenient provider. Contact us for a free assessment that has no effect on your credit file and get one step closer to a suitable personal loan.

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News Financial Planning Personal Loans

Private Lenders: An Alternative Source of Financing

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

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

What Are Private Lenders?

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

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

What Are the Benefits?

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

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

drawbacks

Drawbacks of Using Private Lenders

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

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

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

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

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

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

How Can Private Lenders Help Me?

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

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

Conclusion

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

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Personal Loans

Does Getting a Personal Loan Affect Your Credit Score?

Bad Credit Personal Loans

Personal loans can have a negative impact on your credit score if you fail to repay them on time. Just like it is the case with types of loans, if you’re failing to make monthly repayments, then your credit score deteriorates. But does getting a personal loan affect your credit score?

Problems can start to appear when you’re trying to get a home loan and financial institutions dismiss your application. On the other hand, taking personal loans can actually help your credit score if you’ve never applied for a loan, or dealt with banks up until now. An absent credit score doesn’t mean you have a good credit score. It means that financial institution will be sceptical about you, due to not having any type of information regarding your income or taxes.

Let’s take a look at the impact that personal loans can have on your credit score. Also, let’s see why and how we can address this situation.

How Can Personal Loans Improve Your Credit Score?

  • Just by taking a loan, you start to build up your credit score
  • Paying back the loan proves that you are a worthy and valuable borrower
  • Repaying the loan even faster than the due time shows that your finances are doing great
  • Never skipping payments is a sign that you haven’t taken more than you can afford
  • An active credit history will get you extra points on your credit score
  • Maintaining your account open, even after you’ve settled your debt shows you are a loyal client
  • Personal loans registered on your name reveal that you are mature and Thus, you’ll receive another couple of points on your credit score.
  • The fact that you’ve taken and repaid a personal debt makes you eligible for a home loan, or car loan if the need arises.

How Can Personal Loans Lower Your Credit Score?

  • Failing to make regular payments for your loan will bring you a bad credit score
  • Co-signing on someone else’s loan can affect your credit score as well, for the better or for the worse, depending on whether that loan was paid on time or not
  • Payment defaults and overdue bills do not reflect well on your credit score
  • Refused personal application loans will make it harder for you to get a loan in the future
  • Taking personal loans without first calculating how much you afford to pay each month will not benefit you in the long run
  • Having no sort of credit history also means having a zero credit score, which again, is not good
  • Paying a personal loan 60 days after the due time will lower your credit score greatly
  • Increasing the usage of your personal loan by more than 30% is not recommended.

Personal loans can affect your credit score for the better or lower it up to the point where we’re no longer eligible to apply for a home loan with fixed interest rates or different features that we may like. Keeping your credit score balanced can be done so always try to make regular payments.

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News Debt Management

Many Australians Are Turning to Debt Agreements

part 9 debt agreements

Debt agreements are an alternative to declaring bankruptcy. Rather than be haunted by the irreversible effects that bankruptcy can have on your credit record, entering into a debt agreement can give you a debt-free fresh start. They’re becoming the popular choice for Australians in need of debt solutions. Debt agreements are overseen by the Australian Financial Security Authority (AFSA). As a government body, it’s AFSA’s job to regulate debt agreement administrators, in order to ensure they are resolving debt at the highest standard possible. The AFSA has been finding an increasing number of Australians are turning to debt agreements to solve their debt problems.

Why So Many Australians Are Turning to Debt Agreements

Although a debt agreement is technically an act of bankruptcy as it is under the Bankruptcy Act of 1966, it is considered another option to going bankrupt. There are also many differences between the two, making one look like a much better option to thousands of Australians. A formal debt agreement will appear on your credit file for five years and can prevent you from obtaining further finance during that time.

The AFSA has reported that there were 28, 288 personal insolvency cases reported across Australia during the 2014-15 financial year. Additionally, their June report found that there was an increase of 4.3% for people who entered into Debt Agreements compared with the March quarter. That figure rose from 2,568 to 2,678. Of the Australians who entered Debt Agreements, only 7.7% of them were for business-related reasons, which suggest that the rest were personal debts like credit card debt from overspending.

The amount of Australians entering into debt agreements for personal reasons shows that as a nation, we frequently get over our heads in arrears. Whether getting into uncontrollable debt is due to living beyond our means or just poor budgeting remains to be seen. Debt agreements are for unsecured debts; unpaid credit card, telephone and utility bills. The Australian Securities & Investments Commission (ASIC) puts the nation’s credit card debt at nearly $32 billion, which works out to approximately $4,300 per cardholder. That’s quite a lot of unsecured debt. It’s no wonder people are having difficulty making repayments.

Debt agreements are for people without a former bankruptcy on their credit record, who want to pay back their creditors. Going through a practitioner who specialises in agreements, your debt is negotiated with creditors and merged into a big sum that you pay back over time. If you have a debt agreement, the interest is frozen and anyone you owe is no longer able to contact you to request payment. It takes away the multiple burdens of debt collectors sending letters and making phone calls.

If you’re in need of a solution to your financial burdens, fill out our enquiry form and find out how we can help you.

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News

How Pet Owners Can Save on Pet Food

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Owning a pet can be incredibly rewarding, fulfilling and fun over the course of your furry friend’s life, but it can also get quite expensive. We don’t always consider the long-term costs of pet ownership because let’s face it; they’re cute and cuddly so the benefits usually take precedent over the practicality. Adding a bag of dog food and treats to your shopping list won’t break your budget but there are always ways to save on pet food. Here are a few ways, and why they’re financially viable for you:

How to Save on Pet Food

1. Cook it yourself
Cooking your pet’s food sounds like extreme dedication, right? You might think that only people with plenty of free time and plenty of spare cash would bother to cook for their pets but it’s not the case. Cooking for animals can be cheap and a set-and-forget approach if you do it right. It’s very, very similar to meal preparation for yourself (or any human) – basically you purchase some cheap meat cuts, veggies that your pet can eat, and voila. Throw it all in some stock and you’ve essentially made a cheap soup that you could eat if you wanted to! Freeze it in portions if you’ve got freezer space, or keep it in the fridge and dish it out each night. They’ll love it, and it will work out better for their health and easier on your wallet. You can also make your own treats for little cost and effort! There are various recipes online for the keen owner who’d like to try making their own pet food.
2. Pay for ingredients
So if you’re not into the idea of cooking food yourself, make sure you’re not ripping yourself off by being drawn into a fancy name-brand food that is actually made of the same ingredients as its cheaper counterparts. Do some research, read some labels and don’t overpay. On that note, find out what brands or ranges of food is the best value for money. You’ll find that higher quality foods equate to smaller portions for your animal, so although you feel like you’re spending more at the time, you won’t need to replace the food as frequently.
3. Buy in bulk
This is a rule for either buying food in store or making it yourself. Keep track of specials at the supermarket as well as the pet shops to maximise how much you can save, sometimes it works out cheaper to grab a huge, seemingly endless bag of dog-chow because it will last you for four months instead of the smaller bag you’re replacing each fortnight. If you’re buying ingredients, buy in bulk when you have fridge or freezer space.

Pets are fun, but man do they eat. If it feels like your animal is eating you out of house and home – take a look at their diet. Better food can save you money; not only at the checkout but on the vet trips you won’t have to take because your dog or cat is less likely to suffer from skin conditions and organ problems. Plan ahead, save some money and make you and your furry friend’s life just that much better!

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Tax Debt Loans & Relief

Tax Time – How to get organised to make most of tax deductions

how to maximize tax deductions

It’s that time of the year again, filing for taxes and making the most of tax deductions. It also marks the end of the financial year.  It’s the time of sending paperwork to their respective accountants, the time when their tax returns must be compiled. Finding needed receipts can be a hassle if not a waste of time, and the situation is not something new to many Australians. In fact it is a routine every year. The general consensus is that paying taxes is a stressful time for most people, but it doesn’t have to be like finding a needle in a haystack every time. With some planning and preparation throughout the year, you can significantly reduce the amount of taxes that you owe.

The months of May and June provide a perfect opportunity to start getting organised and plan to make the most of those tax deductions. The following tips should help to guide you on creating a stress free plan, to get organised and maximise your tax deductions.

Planning for Maximum Tax Deductions

Claim any potential deduction that you are aware of: Know your potential deductions. A deduction is something that reduces the amount of your income that is taxed. These can include charitable donations, job-related expenses, interest paid on student loans and mortgages, energy-efficient home improvements and more. Make sure you keep track of all your assets and claim any potential tax deductions. You can also claim, if you’re into business, a tax deduction on pre-pay or stock up on supplies that you buy regularly like office equipment. Even bad debts are tax deductible. To know more about tax deductions you are eligible for, it is best that you review your tax form.

Know Potential credits you are eligible for: Being eligible for credits on taxes entitles you for a reduction on the actual amount of money you have to pay for your taxes. Examples are child tax credit, earned income tax and student tax credit. Furthermore any business with a turnover less than $2 million is potentially entitled to a range of tax benefits, like capital gains tax, income tax, GST and fringe benefits tax. Knowing potential credits may help you get the most from your tax deductions

Evaluate your Financial Position: Having a stable financial position is important in maintaining financial life and business. A stable financial position lessens your burden on taxes. More importantly, it will give you peace of mind knowing your finances are stable.

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Financial Planning

Good Resolutions You Should Know About with the New Financial Year

Bad Credit Personal Loans

Good Resolutions You Should Know About with the New Financial Year

You may agree that New Year resolutions tend to be very difficult to keep. As the months of the year move on, you may realise that you have already failed in keeping those. More difficulty comes with the financial aspect. It could be very hard to keep the resolve not to overspend or not to make bad financial decisions.

Fortunately for all of us, the new financial year comes to bring a second chance. If you faltered in your New Year resolutions especially those involving personal finance, you may still do better and catch up in the new financial year.

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Financial Planning Personal Loans

5 Personal Finance Resolutions

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Your personal finance may not have run well in 2011. That is why you must be looking forward to make 2012 a better one financially. You may not have to rely on luck. You could actually make a difference on your own if you would be more determined and disciplined.
Now could be the best time to make your finance resolutions. Take your time and assess your personal finance in 2011. For sure, there are many aspects that need improvement. You could make resolutions and intend to make you personal finance better not just in 2012 but also in the many years that would follow. Here are top 5 of those finance resolutions you should have on your list.

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