How Does A No Interest Loan Work?
Money | 04 22nd, 2021|

Sometimes there are a few unexpected expenses that can impact on our financial situations, and make things just a little more difficult to deal with. The refrigerator breaking down the same week that the car registration is due could be too much of a financial burden for many individuals. With many credit-providing schemes and dubious loans advertised to the public, there is a simpler way to solve your financial issue if you are applicable.

The No Interest Loan Scheme is provided by the Australian government for individuals and families to have access to safe, affordable credit.

No interest loans are designed to assist people in getting back on a more stable footing financially, allowing them to borrow up to $1,500 to pay for essentials. The term for this loan is between 12 and 18 months, with no credit checks, interest, fees or charges. Repayments for no interest loans are affordable as you are only paying for what is borrowed.

To receive a no interest loan, you must:

  • Have a Health Care Card, a Pensioner Concession Card or an income less than $45,000
  • Have lived at your current address for more than 3 months
  • Show that you can repay the loan.

There are only a couple of steps that need to be completed to apply for a no interest loan under the scheme. A meeting must be arranged with a NILS provider through a telephone or website enquiry, in which you will be interviewed and helped through the application process. Then they will assess your eligibility and present you with an outcome. Loan assessments generally take between 45 and 90 minute, with the loans being approved within 2 days. If all paperwork is provided on the day, it can sometimes be same-day approval.

No interest loans can only be used for essentials. These can include:

  • Household items, like a fridge, washing machine, computer or furniture
  • Educational materials e.g. tablet or textbooks
  • Some medical and dental services
  • Car repairs and tyres
Here’s how to start investing
Money | 03 19th, 2021|

There are a lot of options when it comes to investing, but often people are daunted by the prospect. A lack of accessible information, misconceptions about investment opportunities and fear of losing money are often reasons people opt out of investing.

Investing can be as easy as a savings account separate from the account that is used for spending, in which a percentage of monthly income can go into. If there are adequate funds, consider investing in real estate for passive income. With real estate values growing over time, on top of earning rental income during ownership, there will be an opportunity to sell later on at a higher price.

Diversifying investment portfolios can seem overwhelming, but all that it takes is putting money into multiple investment avenues. This can be in shares or managed funds with a financial advisor, investments with different rates of return, or in startups or cryptocurrency.

These avenues of investment can still be a lot to take in for individuals, so financial advisors are always a good option for those looking for a little more of an expert opinion on the issue.

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Signs of unauthorised and mistaken transactions
Money | 02 25th, 2021|

When checking through your transactions, you might come across a transaction that doesn’t look right. If this is the case, you should get into contact with your bank as soon as possible.

An unauthorised transaction: Money transferred from your account without your permission

A mistaken transaction: Paying the wrong person by using the wrong details

Here are the signs to look out for to identify unauthorised or mistaken transactions:

  • Persons or companies whose names you do not know
  • Cash withdrawal from a place you have never been
  • Transaction date you don’t recognise
  • Payment that has doubled up

But keep in mind:

  • Transactions can take days to show up – they are not always immediate
  • Name of a shop or restaurant might not match the bank statement (they may have a different trading name which you can verify online)
Repairing errors in your credit score
Money | 02 18th, 2021|

Your credit score can affect loans and credit you apply for. You are able to have errors on your credit report fixed for free.

The following are typical errors in credit reports, that you are able to get fixed for free.

Errors by the credit reporting agency – there may be instances where the agency that reports your information has done so incorrectly. This can lead to errors about:

  • Your name, date of birth or address
  • Debt listed twice
  • Amount of debt

This type of error can be fixed by contacting the agency directly.

Errors by the credit providers – there may be instances where the credit provider incorrectly reports information. This can lead to errors about:

  • How long your credit is overdue
  • Whether you were notified about an unpaid debt
  • If your debt was defaulted as overdue when it is in dispute
  • Changes in your payment plan that were not appropriately represented
  • Accounts that were created as a result of credit fraud

These types of errors can be corrected by contacting the credit providers. If they agree that there has been a mistake, then the agency will adjust the details. If there is disagreement, then contact the Australian Financial Complaints Authority (AFCA) to file a complaint and receive a resolution.

Stay on top of your credit cards
Money | 01 28th, 2021|

The following are some tips which will make it easier for you to stay on top of your credit card payments so that you can worry less and save more.

Pay on time

Check when your credit card due date is and plan your spending so that you can always pay before the date. By paying before the due date, you will avoid paying interest or late payment fees but also keep your credit card score healthy.

When you have so much going on in life, it can be difficult to remember a date. To ensure that you’re always paying on the due date set a monthly reminder on your phone.

Pay as much as you can each month

Pay the most amount of money you can for each repayment so that you pay the debt faster and save money on interest and late fees – this means paying more than the minimum amount. If you are struggling to pay the minimum amount, contact your bank or credit provider to see if you can renegotiate. You should also consider talking to a financial counsellor.

Taking action earlier rather than later will save you money and prevent your debt from growing.

Cut back on your credit cards

Multiple credit cards can get overwhelming and result in you paying a lot more than you actually need to. Aim to reduce the number of cards you have one at a time. You might choose to prioritise by:

  • Smallest debt: Pay off the card with the least debt first and then move onto the next smallest debt.
  • Highest interest rate: Pay off the card that charges the highest interest and then the one after.

Regardless of which option you choose, continue to pay minimum amounts for all cards and only continue using one card. Once you pay off each card, remember to cancel it!

Reduce your credit card limit

The easiest way to avoid the temptation of overspending is by placing a limit on your credit card. You can do this by contacting the branch remotely or visiting in person and it takes at most, 2 business days.

Remember that you don’t have to settle on a bad credit card deal. If you realise that your bank is being unfair, or charging too much compared to other banks, make sure you get in touch with them to try and get the best deal for you.

Things you should do every time you get paid
Money | 01 21st, 2021|

It can be tempting to treat yourself on payday, but in the long run, planning your spending will be more rewarding. Creating a payday routine will help you pay your bills on time and save more money to put aside.

The very first step needs to be completed the night before payday. Transfer any funds you have leftover from the previous payday to your savings account. This will allow you to spend less money you consider ‘extra’ and save it for your long-term goals.

The second thing you need to do is pay as many bills as possible, rather than wait till the ‘due date’. As it is, once money comes into the account, a lot of it is earmarked for bills and payments that need to be made, so rather than holding off on them, you should pay them immediately. This will also give you a clear indication of how much money you have.

Finally, creating a to-do list on the day of your payday is an effective method of viewing or planning your expenses. This will give a clear indication of small and large expenses that need to be paid before your next payday. They will also help identify unnecessary expenses or when extra money is being spent when it shouldn’t be.

These are simple techniques that anyone can apply to get ahead of over-spending on payday.

Pros and cons of reverse mortgages
Money | 12 10th, 2020|

Reverse mortgages allow you to use the equity in your home as security to borrow money. The following are pros and cons of acquiring a reverse mortgage.

Pros

  • You will be the owner of your home and can continue to live in it
  • Some of the money you gain from it could be used to supplement retirement (especially relevant if your super isn’t covering all expenses
  • You could use the lump sum payment for renovations if your home is in a bad condition
  • You could put the money aside for emergencies that can arise
  • You won’t feel stressed about your living situation

Cons

  • Over time, your debt will grow while your equity decreases
  • Interest and fees will accumulate and contribute significantly to your loan balance
  • The interest rate that is charged on a reverse mortgage will be higher than on a standard home loan
  • Reverse mortgages could impact whether you receive Age Pension
  • Reverse mortgages could inhibit your ability to afford aged care
  • If you are the sole owner of your home, then if you move or pass away, the person staying with you may not be able to stay
  • If you plan to invest the money from your reverse mortgage, then your home is at risk (not just the portion being invested)

Planning for unforeseeable circumstances is especially important during retirement. Therefore before you choose to opt for a reverse mortgage, make sure you consider your options.

The risks involved in debt consolidation
Money | 11 25th, 2020|

Debt consolidation is a form of refinancing which involves taking one larger loan out to pay off multiple small ones. Although this might make managing repayments easier, you may end up paying more money interest rate or fees.

There will be companies that make offers which are too good to be true. If you feel that an offer is unrealistic and the company is promising that they can get you out of debt no matter what your situation is, you should reevaluate using their services. Don’t trust companies that:

  • Are not licensed
  • Ask you to sign blank documents
  • Refuse to discuss repayments
  • Rush the translation process
  • Won’t put all loan costs and interest rates in writing before you sign
  • Arrange a business loan when you only need a consumer loan

The goal behind the consolidation is to manage your payments, not create more fees and interest for you. Therefore, before signing onto an agreement, check how consolidation compares with your current fees and interest rates altogether. Also, take into account expenses and penalties associated with your existing loans and whether you will have to pay more money for paying off your loan early. If the expenses work out to be more, it might not be worth going through this entire process.

Debt consolidation isn’t the only option if you’re struggling with repayments. Other options may be available which are more suited to you. You should discuss with your mortgage provider, credit provider or financial advisors to determine if there is anything that can be done.

Tracking your spending to spend less and save more
Money | 11 12th, 2020|

It’s hard to know where to start when you decide to take control of your money. It can be helpful to know exactly how much money is coming in and going out to start this process.

Understand where your money is going

Although it can seem daunting to track every dollar you spend, it will give you a clear view of where you are spending your money. Small things often go missed when you estimate your spending, so taking note of these will help you understand the gap between your estimations and your actual spending.

Track your spending and expenses

You should start tracking your spending every day for a set period of time. This could be a few weeks or a few months. You will begin to notice patterns of spending the longer you track your expenses.

A simple way to track your spending is through a phone app. Certain apps will even allow you to limit your spending and give you an easy-to-understand overview of your expenses.

If you regularly use your card, then your bank statement will contain every translation detail. Views these regularly or at the end of the week.

Alternatively, you can also write down where you spend your money and how much you spent. This is especially useful if you regularly use cash.

Reflect on your tracking

At the end of this tracking period, you should be able to see where you most spend your money. Being aware of this might help reduce your spending but there are also other things you can do.

Take note of where you can save your money. There may be certain items that you regularly buy over time, which you might be able to cut down spending for by buying for the long term.

You should also distinguish between what you ‘need’ and what you ‘want’. This will give you a good estimate of what ‘wants’ you are spending most on and how to best cut down on them.

Test out a budget

Using this information, test out a budget and see if it works. This time, you should aim to set a realistic limit for the next week or month. You should account for some of your wants as well as your needs.

Your budget may require revising, but you should create one which balances your previous spending habits, and your future financial goals.

How to get the most out of your bank account
Money | 10 29th, 2020|

Banking is often more complicated than you expect it to be with different types of accounts, fees and fine print to take into consideration. You are able to get more out of your bank account if you pay closer attention to certain details.

Re-evaluate your bank

Due to the competitive market space, new offers that might be much better suited to your needs than the 10-year-old bank account you are using may be available. Keep a lookout for these offers so that your bank account is helping you put more money into your pocket.

You should also consider changing accounts if your bank is asking you to pay high fees or requires a high minimum balance. You may find that other banks are offering better options or attempt to renegotiate terms of your account with your current bank.

Don’t assume your bank is giving you the best rate

Your bank may not be giving you competitive rates and assuming that they will do right by you lets them get away with this. Make sure that you keep up to date with different types of rates and what they should be. Discuss these with your bank and how they might be able to give you more competitive rates to the ones you are currently receiving.

Plan interactions with your bank strategically

Other than when it’s regarding an urgent matter, plan interactions with your bank ahead of time. For example, if you need to visit the bank about your mortgage, aim to have a mortgage specialist with you, this will ensure that you get the best out of your visit.

You may be able to resolve your request by calling the bank. In this case, aim to call in off-peak hours to reduce waiting time. Before you call, make sure you’ve checked whether the bank has provided an online method to complete the process.

Don’t forget cards and bank accounts you don’t use

Carrying a spare credit or debit card is okay as long as you aren’t being charged annual fees on it. If you find that you rarely use the card but it has a high annual fee, it might not be worth continuing to pay for it.

The same applies to bank accounts that you may not be using or using rarely. Banks may charge a dormant account fee if there is no activity in the account over a period of time (check details that apply to your bank). However, using your bank account every few months should be enough to prevent dormant account fees from being charged.

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