The concept of debt consolidation is very attractive when there is a large amount of debt. The attraction is the potential of reducing your outgoing payments and improve your lifestyle.
However, not all situations are suitable, or more often, able to use debt consolidation loans to reduce outgoing payments. Lenders have a multitude of policies designed to ensure that borrowed money is secure.
The issues may result from:
- insufficient security for the loan. The new loan excedes the value of the security.
- the loanamount is too high for the lender to feel comfortable.
- income servicing is insifficient or the oncome isn’t accepted.
- the loans to be consolidated aren’t conducted well.
- credit defaultsIn these circumstances its advisable to discuss the dituatipn with your financier. Not all lenders ate the same. If you need assistance, or someone to discuss you situation, feel free to contact Colin from Loan Saver Network or Apply for a Loan.
There is a variety of information contained in your credit file. The information is contained to provide information for creditors to assess applications for credit. The various listings could be any of the following:
1. Credit Defaults - listings can be noted as paid / unpaid / settled (payment agreed upon) / clear out (client not found).
2. Court Judgement - listed when a court rules judgement in favour of your creditor.
The following would be listed under the bankruptcy section of your credit file.
3. Part 9 Debt Agreement - A debt Agreement that is rstablished by a Debt Administrator. The adminisrator is tequired to obtain aproval from the various creditors. There are tequirements to be met for a debt agreement to be set up.
4. Part 10 Insolvency - insolvency agreement mansged by a trustee.
If you need to discuss the contents of your credit file; contact Loan Saver Network at 1300 796 850, or Apply for a Loan.
Once your debt consolidation has been finalised, the next step is to look at your savings accounts and how your money flows. Setting up your accounts properly can prevent the feast and famine approach to managing bills, mortgage and other loan payments. The feast and famine approach is where the cyclical nature of bills ie quarterly electricity and gas, annual rates, etc. causes periods of no bills and over spending, then being low on funds to pay when the accounts arrive. Here are some tips to smoothing out your cash flow:
1. Calculated (or approximate) your annual cost for all your bills then divide by 12 months and set the monthly figure to be paid to the respective accounts. Add a small amount and over time you will be further in front and can usually obtain bettrr discounts on bills.
2. Do not have the billers draw the payment from your account. You should setup auto pays so they can be turned off as required. Failed payments can be expensive with fees by the billet and your bank. When your low on funds turn the auto payment off and inform the billet you will pay at a later date.
3. Arrange your home loan payment to come out of a single account (account 1) with no other direct debits - this is so no surprise direct debits or auto payments cause a mortgage payment to be missed.
4. Set up your wage into a seperate savings account (account 2) where the direct payments for bills are paid.
5. Auto pay the mortgage payment from the wages account (account 2) (+$100) into account 1.
This structure may seem complicated but is very simple once set up. All you need to do is monitor the money going in. The effect of this structure is amazing. You will never feel the stress of a large bill again.
If you would like to discuss this structure further, feel free to call Colin at 1300 796 870, or Apply for a Loan for more information on our Debt Consolidation Loans.
Under the new NCCP (National Consumer Credit Protection) Legislation which effectively was introduced on July 1st, credit legislation has had an impact on obtaining a Bad Credit Mortgage and Bad Credit Home Loans considerably. Non Conforming and Bad Credit Lending is much more of a specialised area of lending than ever before. Most brokers who do not focus on Impaired clients as their primary form of business will have enormous issues in placing loans, aloong with the additional requirements of the NCCP may additionally prevent lenders accpeting applications from being submitted.
Who is the winner? Who is the Loser?
In the short term i cannot see any winners or losers, but in the long term the winner will definitely be the client sourcing a Bad Credit Mortgage, as the broker writing the bad cr3edit mortgage will need to be compliant with legislation, have the lender accreditation and training in non conforming lending.
If you have any questions about obtaining a bad credit mortgage, please contact Loan Saver Network on 1300 796 850.