Along with all the amazing customers we deal with week to week here at Finance Today, we always receive more than our fair share of hate mail.
So today, we thought we’d take a little time to address a few of the recent accusations that have popped up on our social media pages.
There’s clearly a lot of Kiwis out there who don’t understand the realities of personal finance and debt consolidation… or who believe anyone who lends money is automatically a “loan shark” who’s out to get you.
The truth about Loan Place is a lot simpler and a less scary than that.
So let’s look at a few recent accusations we’ve seen.
Accusation: It’s A Scam
Truth: Hundreds Of Happy Customers Prove That’s Not The Case
As you’ll see in our post about responsible lending, we actually turn down a LOT more finance applications than we approve.
Why?
Because our mission is to help everyday people get finance solutions that will improve their financial position.
For most applicants, getting a loan is not the best option.
Naturally, some people get angry when we turn them down for a loan.
There are literally hundreds of Finance Today customers who’ve come to us for personal loans, car loans, business loans and debt consolidation…
…and who have been thoroughly impressed by our service and the solution we helped them find.
In other words, our growing community of happy, loyal Finance Today customers is living proof our business is not a scam.
Accusation: ‘Mature People’ Don’t Consolidate Debt
Truth: Consolidating Debt Is Often The First Step To Repairing Your Financial Position
One comment we saw recently concerned our debt consolidation service.
The gist was this: Taking one loan to pay off another loan doesn’t make sense.
Now, that might be true, IF you took a new loan to pay another at the same — or higher — interest rate.
But if you have multiple loans and the average interest rate across those loans is, for example, 25%…
Then you would be in a much better position if you took a debt consolidation loan and dropped the interest rate to, say, 19%.
It’s simple maths.
We wouldn’t offer debt consolidation to our customers if it didn’t help them improve their financial situation.
Accusation: ‘Be Careful Of The Broker Fee’
Truth: Our Consultants Work Tirelessly To Find Great Finance Solutions, Tailored Specifically To Our Customers
One way to think of Finance Today is like an air travel aggregator website for finance.
We don’t lend money ourselves. We broker finance agreements on behalf of our customers using our working relationships with multiple lenders across the country.
We do charge a modest broker fee to provide this service. We have never and will never hide this simple fact of our business model.
While some people online seem to think we are ‘working for third parties’, the truth is we are working for our customers.
Our consultants work one-on-one with each of our customers to match their specific situation and goals to the right loan from the right lender.
We are proud to provide this service to everyday Kiwis.
If you have any questions about our business or the services we provide, don’t hesitate to get in touch with us
Posted in Business Loans, Car Finance, Debt Consolidation, Mortgages, Personal Finance
OK, it is only October, but before you know it, the rush of Christmas is going to be upon you.
Most of us tend to leave our Christmas shopping to the last minute.
According to The Register, in 2016 Kiwis spent about $6 billion in December alone.
The busiest day is December 23.
That means most of us do the bulk of our spending at the last minute, often paying premium prices to get our hands on the gifts we want right before Christmas Eve.
In other words, chances are you’ll be approaching Christmas this year in a mad last-minute rush.
That might mean you spend more than you planned and end up letting the pressures of the festive season put you or your family under unnecessary financial stress.
So, well ahead of time, we’ve prepared a brief post to help you ace your financial preparation for Christmas 2019.
Christmas Money Tip #1: Start With What You Can Afford — Not What You Want
We’ve all been there.
Christmas sneaks up on us and all of a sudden it’s Christmas Eve and we’re at the mall scrambling to buy gifts using our credit card without a second thought.
Then, by the time the holiday season has ended, we’re left looking at a hefty credit card bill and find ourselves starting the new year financially on the back foot.
There’s an easy way to avoid this.
Forget about what you want to get your family and friends this year…
And instead start with what you can afford.
Set a budget now and then keep careful track of your spending as you do your shopping, making sure you don’t excess the level you’ve set.
Of course, this will be much easier to achieve if you don’t leave it till the 11th hour to get your shopping done this year ☺
Christmas Money Tip #2: Recycle Last Year’s Unloved And Unused Gifts
Books, toys, gadgets, clothes — whatever you bought last year, chances are those you gave gifts aren’t still using all of them 10 months later.
(Perhaps you also received a few things you no longer use.)
If this is the case, a great way to quickly create some extra cash for your Christmas budget is to sell your unused gifts from last year online.
You’d be amazed how quickly you can turn unloved items into hundreds of dollars of extra cash — helping you avoid getting into money trouble this year.
And speaking of money trouble…
Christmas Money Tip #3: Get Your Finances And Existing Debts In Order Before The Christmas Rush
As personal finance and loan service experts, we know that a sound, realistic financial plan is key to making sure you don’t let unexpected events — like last-minute Christmas shopping — damage your financial position.
So if, like many Kiwis, you have existing debt you’re paying off, it could be a smart idea to analyze those debts with one of our debt consolidation consultants.
They may be able to help you lower your repayments by restructuring your existing debt.
This, in turn, may help free up some extra cash flow and stop you getting further into debt this festive season.
If you have any questions about obtaining fast, fair finance, we’re always happy to help.
Posted in Debt Consolidation, Personal Finance
This week on the Finance Today blog, we’re pulling back the curtain on three real-life success stories.
When people apply for a loan with us, no matter whether it’s a small loan or finance for a major purchase, our aim is always the same:
We want to help our customers improve their long-term financial situation by access fast, fair finance solutions that suit their specific needs and background.
And we’re pleased to be able to share with you today three stories of customers we’ve proudly served in the past few months.
These are everyday Kiwis who found us online, applied for a loan and worked with one of our dedicated consultants to find a solution that would allow them to borrow the right amount of money under the right conditions.
See for yourself!
(We’ve changed their names to protect their privacy.)
From Out of Business to Making $40,000 a Month
Rob is a business owner who unfortunately had to deal with the failure and closure of his business.
Not long after though, he got the opportunity to become an ‘owner driver’ for a container transport freight company.
The only hitch was that he had to find $140,000 to buy his own truck and trailer before he could get started.
How could Rob possibly go from dealing with a collapsed business to finding that much money to start work with the new firm?
He called us.
We quickly analyzed Rob’s situation and income potential, and helped him obtain a loan for the new truck.
Rob only had to provide a small deposit and use the truck as security on the loan.
He’s now up and running with his new small business, generating $40,000 a month in revenue.
Mortgage Cleared and Property Project Complete!
Damian had been building a house in Queenstown over the past couple of years but had gone over budget (as building projects often do) and found himself $100,000 away from finishing.
Because he was self-employed, the banks required two years’ worth of financial statements in order to lend Damian the funds he needed to complete his new building.
Luckily for him, Damian found Finance Today.
We were able to help him arrange a $780,000 mortgage refinance that cleared the existing mortgage and advanced him the funds to finish the project.
Today, the building is complete and Damian recently rented it to his first tenants.
A $50,000 Loan Facility Approved in Just 2 Hours
Janet runs a food truck company. Business had been going well, so she was looking to expand her fleet and buy a late model Isuzu to help serve more customers.
She started looking around for a lender to help her finance the new truck.
Unfortunately, Janet had difficulty proving a stable income and found that most lenders deemed her to be a high risk customers (she already had multiple trucks on finance).
But when she spoke with us, we dove a little deeper into her situation.
As a property owner who’d be running a successful business for 10 years, Janet was not the high risk our competitors told her she was.
In just two hours, we had approved a $50,000 loan for Janet’s new truck.
Her business is now growing even more successful and she’s thinking about working with us again to finance another truck!
There you have it.
These are just three of the hundreds of success stories we’ve shared with everyday Kiwis here at Finance Today.
If you have any questions about obtaining fast, fair finance, we’re happy to help.
One of the things some like to claim is that you are better off going to the bank for a loan than applying with us.
We thought it would be helpful for those considering applying for finance with Loanplace to get the facts straight first.
We’re a New Zealand Government Registered Financial Services Provider.
We have thousands of satisfied customers who’ve borrowed amounts from just a few thousand dollars up to several thousands, for reasons ranging from debt consolidation and home improvements to buying a new car or going on a much-needed holiday.
If you don’t want to take our word for it (we are, of course, biased), then read some of our hundreds of independently verified reviews.
We’re Agile: We Can Quickly Approve Loans Large And Small
The biggest advantage we have over the banks is that we are an impartial business that has strong working relationships with multiple finance companies in New Zealand.
That means we can match your application with the best lender based on your individual situation.
A bank, on the other hand, is only interested in lending you money itself — even if there’s a better option out there.
One of the best things about being a small, independent business is we can offer our customers great flexibility — often more so than the banks.
While applying for a loan through a major bank can require large amounts of paperwork, we pride ourselves on offering customers a quick, user-friendly online application that only requires you prove your income using our secure online portal.
Another advantage we offer our clients is our lightning-quick response and approval times.
If you apply for finance with a bank, you can sometimes expect to wait days for a result.
At Loanplace, our quick-and-easy online application process means we can process, approve and settle your loan within just two hours (that’s best-case scenario, of course — some applications are more complex and we rely on our customers providing their information quickly in order to deliver a fast service).
So while we are small and independent, we are not looking to scam anybody — just deliver fast, fair service.
We’re 100% Legit (And Fully Capable Of Beating The Banks’ Interest Rates)
Loanplace is a New Zealand Government Registered Financial Services Provider.
We’re in business to help everyday kiwis get access to fast, fair finance with friendly, one-on-one service.
We deliver our service via our website and our hand-picked team of consultants here at our office in Christchurch.
We’re also fully committed to responsible lending. Because we believe in only lending money to those who can afford to pay it back, plain and simple.
Our team assesses each loan application fair and square.
The interest rate we offer our customers is always directly in line with the information they provide in their application and their credit history.
While the banks tend not to offer interest rates on loans lower than 13.95%, we’re able to beat that by about 5%.
If you have a particular question you’d like to ask us, we’d love to help!
When we talk about your ‘credit rating’, we’re talking about your entire history of financial decisions.
That might sound scary, but it doesn’t have to be.
See, every time you apply for a loan, a mobile or internet plan, mortgage or credit card, for example, the provider has to check whether or not your history demonstrates you will be able to afford the payments.
Every time you apply for a financial product or service, the details of that application enter your credit report.
Your credit rating is the sum total of your applications and the rate of success or failure you have had in both obtaining and repaying loans.
This means that every time you apply for finance, you’re not really going up against some big bad company who doesn’t want to lend you money.
Really, you’re going up against your own financial past.
If your credit rating reflects a long history of successful applications and diligent repayments, you’ll generally stand a higher chance of succeeding with new applications.
But, if you have a long history of missing payments or being chased by debt collectors, for example, chances are you’ll find it more difficult.
Simple Ways To Protect & Improve Your Credit Rating
If you already have a good credit rating and you want to keep it that way, here’s three things to keep in mind.
Keep on top of all your accounts: Whether it’s your mobile phone, your Sky account, broadband connection or home utilities accounts, make sure you stay up to date with payments.
This shows the credit rating agencies that you can be relied on to meet your payment obligations.
Minimize your debt: OK, we know sometimes you have to borrow to improve or stabilize your financial position.
But think carefully before you borrow.
The more debt you have to your name, the riskier you might seem to potential future lenders, because this debt will show up in your credit rating.
Show stable income and living arrangements: The longer you’ve been earning income from a job, and the longer you’ve owned or rented your home, the more likely your credit rating will demonstrate stability and reliability — two things which finance companies like to see when assessing a loan application.
Common Pitfalls That Can Damage Your Rating And Make It More Difficult To Get A Loan
At Finance Today, we see a LOT of finance applications. Time and time again, we see people making the same mistakes and costing themselves the chance to secure a loan at a good interest rate.
Here’s three things to avoid if you’re looking to build a good credit rating:
Applying for heaps of loans: This is important. You don’t have to obtain a loan for your credit rating to change, you only need apply.
There’s no sense applying for 10 loans in a single day when each company you apply for can see you’re applying to the nine others.
The better option is to do your research and apply for one loan, not many.
Accepting payday loans: These high interest, short-term loans are sometimes necessary for those trying to alleviate urgent financial problems.
But the reality is that accepting a high interest loan like this demonstrates to credit rating agencies that you may be in financial hardship — making it tougher to get accepted next time you need finance.
Gambling before applying for finance: Successful loan applications require proving your income and financial behavior via bank statements.
Lenders will look for evidence of gambling.
This can negatively impact your chances of getting approved, because lenders ideally want to give you finance to improve your financial situation, not make it worse.
Posted in Car Finance, Debt Consolidation, Mortgages, Personal Finance
Getting approved for a personal loan in New Zealand depends on one thing; proving a steady and stable income.
That’s because lenders need to be able to see that those they loan money to have the means to meet their repayments.
You can’t lend someone money if you can’t reasonably expect them to pay it back, right?
For most finance customers in New Zealand, proving their income is easy. You simply provide a bank statement that shows regular income hitting your account, tell your lender the details of your employment or income source, and from there the finance company can assess your financial situation against your loan application and (hopefully) approve your loan.
But, what if you don’t have a regular employment income?
What if — like many Kiwis — you make a living working for yourself and you need access to finance.
In our experience, many hard-working self-employed people run into trouble when they apply for a loan.
Because most lenders simply don’t want to do business with customers whose income fluctuates and they can’t easily predict.
Maybe you’ve experienced this.
If so, we have some Good News For Self-Employed Kiwis Looking For Finance.
For many lenders, the words ‘self-employed’ are a red flag.
But in many cases, the reality is that working for yourself can be more rewarding and profitable than working for someone else — even if it does make your income more difficult to predict and forecast.
Here at Loanplace, we respect and admire those who are having a go at running their own business and working for themselves.
And we reckon it’s not fair that those taking a risk and backing themselves like that don’t get access to fair finance.
That’s why we want our customers to know that while it can be difficult obtaining a personal loan as a self-employed person…
You may be able to access a loan if you can show that you will use the money to develop or grow your business (and therefore potentially increase your income).
For example, if you’re working for yourself or running a business, you may need finance to:
We May Be Able To Help You Finance Your Business Up To $150,000
Loanplace exists because our founders quit their old jobs, took a risk and went out on their own to start their own business.
So we understand the challenges self-employed Kiwis face.
We think it’s important that you know — especially if you’ve already experienced the disappointment of being turned down for a personal loan…
That while it might be difficult to get finance as a self-employed applicant…
In other cases you may be able to get approved because you’re self- employed.
Of course, you do need to be able to demonstrate a good cash flow from your work.
(We can help you do that here)
You may also be required to use assets like a vehicle or property to help secure the loan.
But the point is, being self-employed doesn’t mean you can’t access finance.
Loanplace can help customers with a good cash flow and business plan access loans up to the value of $150,000 (this of course depends on individual circumstances and we can’t offer any guarantees).
Posted in Personal Finance
Your mortgage is not what you think it is.
It’s not just a debt to the bank that you have to pay off to live in the house you bought.
It’s not just another bill you’ve been dealing with every month since you moved in.
In fact…
It could be your ticket to accessing a pile of extra cash.
Let us explain.
Your mortgage is a measure of how much equity you have in your home.
The more you pay off your mortgage, the more your house belongs to you (and not to the bank).
As you build equity in your home over time, you don’t just chip away at your mortgage.
You create a financial and real asset.
See, you can — if your financials meet the lender’s requirements — use that equity as security for extra cash, or a ‘second mortgage’.
And you can use that extra cash pretty much any way you like; renovations, travel, consolidating debt or buying a new car.
If you’re a homeowner and you’re trying to obtain finance, then listen up.
Your Home Equity Could Be Your Ticket To Tens Of Thousands Of Dollars In Extra Cash
When finance companies and brokers in New Zealand assess your loan application, they’re bound by regulation and law to examine your income and assets.
That means you can’t borrow more than you can afford to repay.
If you own a home and you’ve been paying off a mortgage, applying for finance could be way easier than you might think.
That’s because having home equity not only shows that you have the income to pay off your mortgage…
It also proves to lenders that you own a valuable real asset.
You have the right to ‘borrow against’ the equity in your home.
In other words, the part of your home that you’ve paid off becomes the ‘security’ for any extra cash you might need to borrow.
Many people use the equity in their first home to borrow the money to buy a second property.
That’s why you’ll often hear this type of loan called a ‘second mortgage’.
It’s also called ‘caveat lending’.
The Reserve Bank of New Zealand limits this type of lending based on the ‘loan-to-value ratio’ or LVR.
The regulations mean you can access up to 80% of the equity you have in the home you live in and up to 65% on a property you rent to a tenant.
So, if you own a home and you’ve been paying down your mortgage…
We May Be Able To Approve Up To An Extra $150,000 For You Using Your Home Equity
To get an idea of exactly how much extra cash you might be able to access based on your home equity, speak with one of our caveat lending consultants today.
Some common reasons for accessing finance through caveat lending are:
Generally speaking, homeowners do enjoy a quicker and easier loan application process thanks to the security that owning equity in a home provides to lenders.
But, getting approved for a second mortgage or caveat loan will depend on your unique financial situation and the amount of equity you have available in your property.
So if you own a home — whether it’s your own or one you’re renting out — you may be sitting on a way to access up to $150,000 in extra cash.
To learn more about caveat lending and discover exactly how much you might be able to borrow, get in touch with us today for a free, no-obligation consultation.
Posted in Mortgages, Personal Finance
Chances are in the past couple of months you’ve seen or heard some rather scary stories about so-called ‘pay day lenders’.
TV news and social media ran stories in June about how the Commerce Commission is taking one business to the High Court of New Zealand over allegations of irresponsible lending.
Naturally, the story has caused everyday Kiwis to pay attention to this business, and others like it.
If the story worries you…
Or makes you second guess whether it’s smart or safe to borrow money in New Zealand right now…
Good.
Because here at Loanplace we think the more educated and aware you are about borrowing money, the better.
The better it is for you, for businesses lending money… for the whole industry.
So, in this brief post, we’re going to address a few important points.
The point isn’t to sell you anything (though of course our business is providing fair finance to everyday Kiwis — more on that here).
Our objective here is to explain what’s going on with the Commerce Commission’s case… and show why the kind of lending practices they are aiming to crack down on are, in fact, bad for everybody in the finance industry.
‘Finance Company’ Does Not Equal ‘Pay Day Lender’
547.5%.
That’s the interest rate some people have been agreeing to when they’ve taken on what’s known as a ‘pay day loan’.
If someone is in the position where they need to borrow money at an interest rate that high… how can they reasonably be expected to repay more than SIX TIMES that much money?
It’s pretty basic.
If you find a lender offering money at an interest rate like that, you must understand the repayment demands.
For now, this sort of thing isn’t illegal. That’s probably going to change very soon.
But in the meantime, we advise you not to accept any loans at interest rates that could make your financial situation worse, not better.
(Loanplace doesn’t ever approve a loan with an interest rate higher than 25%.)
Why We’re HAPPY There Are People Complaining About Us Online…
If you look around our social media pages, you’ll find people commenting that Loanplace is “a scam” and complaining that we’re discriminating against people by not lending money to those who don’t have enough income or assets.
This is criticism we’re happy to have.
Here’s why.
Loanplace exists to provide fair finance to everyday Kiwis with friendly, fast and personal service.
We aren’t here to arrange finance for people who can’t afford it…
Whose financial situation means a loan would actually hurt rather than help them…
Or to force those who don’t understand the rules of borrowing money to pay back four, five or six times the amount they borrowed.
In other words…
We feel it’s far better to have people complaining that we won’t approve their finance application that to have customers who can’t afford to make the repayments on their loan.
If A Loan Is Bad For You, It’s Ultimately Bad For The Business You Borrow From
A high interest loan that takes you years to repay and potentially damages your credit rating is, obviously, not the most sensible option.
But it’s not just bad for you if you can’t afford to pay it back.
It’s actually bad — over the long term — for the business who lends you the money.
Think about it.
If a business approves loans for 100 customers and only, say, 10 of those customers actually manage to repay it, then the business is in trouble.
This is why you find companies like those the Commerce Commission is targeting charging massive interest rates — they’re trying to cover their costs and protect themselves from customers failing to pay their loans back.
To us, that’s a pretty bad business model.
Not just because it puts customers in financial difficulty.
But because it creates uncertainty and unsustainable conditions for the business.
Our model is different.
We only approve loans for customers who understand their repayment obligations and have a reasonable chance of paying back their loan without entering significant financial hardship.
Our team of professional finance consultants don’t approve loans for everyone (see the complaints on our Facebook page).
In fact, we’re so serious about providing fair service to our customers and creating a sustainable business that we’ve invested in creating proprietary software that allows our team to accurately determine whether it’s sensible to offer a loan to a customer.
We also specialize in debt consolidation.
This involves looking at our customers’ existing loans and repackaging them into one debt at a lower interest rate.
In other words, we believe that what’s in our customers’ interests is in our interest (and that insanely high interest rates are not good for you OR us in the long term).
So, if you’ve seen the stories about the Commerce Commission’s case against ‘pay day’ lending in New Zealand…
And that’s made you think carefully about the rules and realities of borrowing money…
Great!
We encourage all our customers to familiarize themselves with the conditions under which they borrow money from any third party.
For more information, please check out this article about Responsible Lending: https://www.consumer.org.nz/articles/responsible-lending
Sources:
https://www.tvnz.co.nz/one-news/new-zealand/moolas-alleged-interest-rate-breaches-shows-system-not-working-like-should-finance-expert
https://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=12247594
Did you know you can get finance to purchase cars privately!? This means you can buy a car off TradeMe, off a friend, or even off the side of the road just like you would at a car dealer.
This gives you the power to find the exact car you want at a much lower price than you might find at a dealer.
Not at all! Finance companies are happy to lend you money for a car no matter if it is from a registered car dealer or for a private sale.
The conditions are the same however… The car must be fairly new, usually less than 5-10 years old and you must get full insurance for the vehicle.
This is actually a lot easier than it sounds. Usually the whole process is the following 4 steps:
That’s it!
Here at Finance Today, vehicle finance is our specialty. We have access to several Finance Companies and can get you rates that no one else can.
Our team will guide you through the entire process from getting approved for finance, right up to picking up your new car.
With decades of combined experience in the vehicle industry, we can provide you with advice on vehicles, insurance for the vehicle and getting you the best deal possible.
Posted in Car Finance, Personal Finance
Often in life you can find yourself in a bit of a pickle when it comes to money. Maybe some unexpected bills came up that you were not prepared for. Perhaps you needed to buy a car to get to work. Whatever the reason, it happens, and there are a few things you can do to help get yourself into a better situation fast!
If you have multiple debts, say a credit card, a hire purchase and an overdraft, it is important to pay these off in the correct order so that you can get out of debt fast and save the most money.
So the first thing to do is find out what the interest rates are on each of your debts. Often credit cards or payday loans are going to be the one with the highest rate.
Now you have figured out the highest rate debt, you need to pay off as much as you can each month rather than just the minimum payment. The reason for this, is everyday interest is calculated on your debt, so the lower the amount of debt on each day, the less interest you will be charged.
In the long run, this means you end up paying the debt off faster and also it costs you less because you are paying less interest.
Did you know that different credit card providers offer an interest free period when you transfer the balance of a credit card from another bank to them?
Often the big banks have a 6 month or even a 12 month interest free period when you transfer the balance. That means on a credit card debt of $5000 at an interest rate of 19.95% you would save nearly $500 over a 6 month interest free period.
Now of course this only helps you if once you transfer the balance, you pay off as much as you can each month. Don’t just pay the minimum amount. This is to drop the balance as much as possible while in the interest free period.
If you get to the end of the interest free period and still owe money, nothing is stopping you from doing another balance transfer to a different bank to take advantage of another interest free period.
Another option is to get a ‘Debt Consolidation’ loan, which brings all your debts together into a single, easy to manage repayment.
Often this winds up to be the most manageable solution for someone with many debts, as it makes the monthly repayment much smaller and can often be at a lower average interest rate.
When it comes to personal finance there are a lot of different approaches and ideas out there and often it can be hard to tell what is good advice and what isn’t.
Below are 5 of the most common myths around personal finance.
Often people confuse these two concepts as being the same thing. Surely people who earn a lot of money are wealthy right? Well that’s not always the case.
Many people earn more than enough money to become wealthy they simply do not hold on to the money they earn and end up spending it on various unnecessary things.
Likewise even on a low income, if most of the money is saved or invested that person can find themselves with a very healthy bank account.
There is a fantastic article on this very myth here.
You might have been warned about credit cards in the past by friends or family. They usually tell you some horror story about a person getting into mountains of debt at a high interest rate.
Now that scenario can definitely come true but with some financial discipline you can make credit cards work in your favour.
First of all, having a credit card and paying it off in full every month, not only incurs zero interest for you, but also helps you build up a healthy credit history that can help you with getting finance in the future like a car loan or a mortgage.
A second use of credit cards that not many people are aware of are their ability to earn you rewards points. Certain credit cards come with a rewards points scheme such as a frequent flyer program or flybuys.
How this works, is every dollar you spend on the credit card usually translates into 1 reward point.
So one strategy you might use is if you purchase everything on your credit card that you would’ve usually purchased on your eftpos card you will now be getting rewards points which build up very fast.
But wait, won’t that cost me interest!? If you pay off your credit card in full every month, you do not get charged any interest at all. That means as long as you stay disciplined, you will be earning rewards points absolutely free!
Often people say, that because they have a low income, there is no point in saving money. This couldn’t be further from the truth!
Even saving $20 a week would leave you with just over $1000 at the end of the year. Imagine how many presents you could afford with an extra $1000 at Christmas time.
Saving money, like anything else, is a habit. Once you get in the habit of putting money aside every week, it quickly snowballs and you end up building quite a healthy savings account.
A good strategy can be to put aside a certain percentage, say 10% of your pay into a savings account then as you earn more money, you maintain the same percentage. So if you earn $500 a week now, that’d be $50 into savings.
It’s never to late to start saving money and the sooner you do, the more wealth you will create.
This myth has been hanging around for many generations. It stems back to when the housing market was in very different shape and it often was the case that buying a home was a good investment.
In reality, people do not factor in all the additional costs to home ownership such as interest payments, repair costs, legal fees, rates and insurances, the list goes on.
Renting on the other hand, puts all that responsibility on the land lord and the person renting the house simply has to worry about paying the rent.
If you don’t like the house or the area anymore, you can simply up and move in a relatively short time frame. Selling a house can take a minimum of 30 days up to many months, if you can’t find a buyer.
Your monthly rent is also often much cheaper than the monthly mortgage payment for the same house. This allows you to use that saved money to put into better investments.
Only wealthy people invest in stocks or own investment properties right? Wrong.
Anyone can invest their money and you can start with a relatively small amount too. Often the first and best place to start, is investing in a whole market instead of a single stock.
This allows you to spread your risk and over the long term, usually beats a savings account interest rate. This can be done by purchasing shares in an ETF (Exchange Traded Funds), there is a fantastic guide here on ETF’s.
Like saving money, investing is a habit. As you form your good savings habit, you can easily move into investing as well.
Watching your money grow overtime is very exciting and even if you are only growing $100 you will still get great satisfaction out of watching it grow bigger!
Having to pay off multiple debts at once can often become overwhelming and easily spiral out of control. Perhaps you have a credit card payment due as well as your car loan payment and by the time you pay the credit card, there is no money left over to cover the car loan as well.
Consolidate means to combine things into a single more effective whole. When it comes to a debt consolidation loan, that means we are bringing all of a persons debts into one single more effective loan.
This usually results in a much lower interest rate than all of the individual loans and also makes it very easy to pay off as there is only one single repayment.
There are a few very good reasons why you would do this. Lets take a look at them.
Saving Money:
A debt consolidation loan can reduce the overall interest you are paying by bringing high interest debt into a low interest loan. It can also save you money by having less fees to pay. Often payday loans and credit cards charge you additional ‘payment’ fees or card fees.
Makes things easy:
Meet Sam. He always gets paid his wages monthly on the 20th of each month. His credit card payment is due on the 16th of each month and the hire purchase loan is due on the 23rd of each month.
He finds it easy to pay the hire purchase loan off, as it always comes just after he gets his monthly pay. But by the time the 16th rolls round, he often struggles to get the money together to pay the credit card and is worried he will start missing payments.
If Sam got a debt consolidation loan for both of these loans, he would now only have one single repayment that he can line up with his pay on the 20th of each month.
Now as soon as he is paid, he can pay his loan payment as well, which means he can live stress free for the rest of the month.
He also has flexibility with the loan term and could decide to spread it out over a longer term than previously which would allow smaller weekly repayments.
Helps your Credit Rating:
By having only one monthly repayment, it means you are less likely to miss a repayment which keeps your credit rating in good health. Also having only a single loan repayment in your bank statement history, looks much better to potential lenders in the future.
Becoming Debt Free Faster:
Because you would only have a single repayment, it makes it much easier to plan ahead and determine when you can become debt free. Use our loan calculator to see an estimate on what repayments might be.
Here at Finance Today, debt consolidation loans are our speciality. If you would like to know more, get in contact with us and one of our friendly team members can answer any questions you might have.
