Author: yesloans | Page 9

What is Debt Consolidation and Should I Consolidate?

Posted on 27/09/2019 at 5:11 pm.

Should You Consolidate Your Debt?

Having to pay off more than a single debt at a time isn’t uncommon. But for those of you who are struggling to achieve your debt repayments, perhaps debt consolidation may help. We have a dedicated debt management team that has a proven track record of helping people get their finances in order.

The idea behind this is that you bring together all of your existing debts into one, new debt. Doing so can help you manage repayments while also giving you a better view of your financial future. Debt consolidation is normally done by getting a new personal loan which will be used to repay existing debts.

Is Debt Consolidation Good For Your Credit?

Let’s say for example that you have three different cards with varying debts. Your situation here would most likely mean that you have to deal with three different interest rates as well. On top of that, you also have to repay them at separate times in a month.

Managing this type of cash flow can be quite overwhelming and complicated. You may also find that your interest rate in one card is significantly higher compared to the others. In the end, you might be paying a lot more each month just to cover the interest, besides having to pay for the debt itself.

Let’s find out more about how it works.

How Does Debt Consolidation Work?

One way you can consolidate debts is by signing up for a personal loan. This loan is going to pay for each of your credit card debts and their following interest rates. With a single personal loan, you only have to worry about one repayment. You can sometimes choose how frequently you want to repay – weekly, fortnightly or monthly.

If your personal loan’s interest rate is lower compared to the credit card rates – and this is often the case – you can get ahead in reducing financial debt overall.

Reasons to Consolidate Debt

When consolidating debt with a personal loan, you’ll get a lump sum cash loan which you can then use to pay off your existing debts. Once you’re done with that, all you have to do now is to repay the personal loan itself.

Here are several reasons why you should choose to consolidate your loans today.

You Can Pay Off Your Debt for Good

When utilised in debt consolidation, a personal loan can be that stepping stone to get you out of debt – and for good! This works if you:

Ensure that you base the monthly payment you can afford on your budget

Avoid using credit cards and other debts that can accumulate once you’ve repaid all of the balances in your personal loan

Once you’ve paid your loan – and if you haven’t collected any other debts – then you’re good to go!

You Know How Much You Owe Each Month

Since a personal loan is based on instalments, you get to pay it back in equal portions over time. Its fees and interest are included in the monthly repayment, which unlike credit card debt, will have the same amount each month. Being able to know how much you owe beforehand can help take the guesswork out on your budgeting. It also sets you up so you can plan and save for your personal loan payments easily.

You Only Have to Pay for a Single Loan

If you want to get organised with regards to handling multiple payments and debts, debt consolidation via a personal loan is a good start. By doing so, you don’t have to worry about juggling several debts as mentioned earlier. You only get to focus on paying back one loan and on a specified date each week, fortnight or month.

You Get to Pay Loans at a Fixed Rate

The great thing about personal loans is that you get charged at a fixed interest rate. This means that you won’t get caught off guard by any immediate rate changes such as with credit cards. Consolidating all of your variable-rate debts with one personal loan lets you get rid of all those problems.

You Can Rebuild Your Credit Score

When using a personal loan to repay your credit card debt, this can help lower your credit utilisation rate. The utilisation rate is the amount of your overall credit limit that you are consuming and is the second key factor that determines your credit score.

Since a personal loan is repaid in equal amounts and on a fixed schedule, you can budget all of your future payments for it. Once you’ve established a pattern of paying on time, you can contribute positively towards your credit score.

You Get Your Money Immediately

Majority of lenders will let you apply for a personal loan, no matter your credit score. The process of being approved and knowing what the terms are is fast. If you accept their proposal, you can find your funds within your account in a few days. This speed can be very useful especially if you need money right now to get something started.

We are here to help if you have a feeling that your finances are getting away from you or you want to roll a few loans into one more centralized loan we can help you. Contact our team of professional brokers and let Yes Loans help you get back on track.

A Complete Guide To Car Finance Terminology

Posted on 31/07/2019 at 6:10 pm.

Written by yesloans

Speak The Same Language As Our Car Financing Team With This Guide

When it comes to car financing, it seems to have a language of its own. Buying a new or used car may be as easy as you think especially with the variety of finance products available today. But once you get there, it can be difficult to work out which one you need since the industry uses a lot of jargon. We want to help clear that up for you.

This guide won’t be fun. But where we lack the fun we provide the information that matters. We want to keep you in the loop about what terms and options impact your loan and repayments to be made. This is well worth a read especially if you are in the loan application process.

Some of the terms being used can fall under the category of marketing talk while others may be on the legal side of things. Whichever the case, it can be hard to understand and make deals easier to compare.

If you are already a full bottle on car finance then jump straight to the application section here.

If you don’t really think that reading this will help you skip ahead to the part where you apply online.

Below are some of the most common terms you’ll hear in car financing and we’ll explain each one as simple as possible for you to understand.

ANCAP

The Australasian New Car Assessment Program or ANCAP is the leading independent vehicle safety organization in Australasia. It provides both Australian and New Zealand drivers with vehicle safety information by way of publication of its star safety ratings. These ratings consider the level of pedestrian and occupant protection from new cars by conducting crash tests and assessing their collision avoidance technologies.

Borrowing Capacity

This is the amount of money a person is capable of borrowing from a lending agency. Since every consumer has different circumstances, it is expected that people will have different borrowing capacities. Lenders make use of their own formulas when calculating the borrowing capacity. This means that the same individual may get different capacities to borrow from different lenders.

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You can talk to our experts at Yes Loans now if you want to know your borrowing capacity.

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Certificate of Currency

Also known as a Certificate of Insurance, this is a type of document that is provided by an insurer or insurance broker to confirm the information and currency listed in your insurance policy. Third parties will look for this document to confirm that you indeed have the appropriate coverage on an asset. This document is often given to you once your policy has been defined and paid for.

Co-Borrower

A co-borrower is a person whose name is listed on a loan document and whose credit history and income is considered to qualify for the loan as an additional borrower. In this kind of arrangement, all of the parties involved are obliged to repay the loan. Being a co-borrower can benefit an interested debtor who cannot qualify for a certain loan or obtain favorable terms for it.

Comparison Rate

This is an indicative rate that is provided as a percentage of your total loan amount and is designed to provide a person with a more precise idea on the true cost of their loan. It works by taking into account the interest rate of the new loan along with the fees or charges that could affect its true value.

Credit Check

Also known as a credit search, a credit check is when a lender looks at your credit report information to gain an understanding of your financial behaviour. Although your consent may not always be required, lenders need to have a legal reason to do so such as when you’re applying for a loan with them.

Credit Protection

Credit protection is a form of consumer protection that is designed to assist in preserving credit health for both lenders and their customers. It mostly works by shielding consumers from practices that could harm their ability to acquire future credit, often by preventing practices that can unfairly impact their credit score.

Credit Score

A credit score is a number which evaluates the creditworthiness of a consumer based on their credit history. Lending companies use credit scores to analyze the probability a person will pay back their debts to them. The higher the credit score of a person, the more financially trustworthy they are in the eyes of lenders.

Encumbrance

In terms of motor vehicles, an encumbrance means that money is still owed on a loan for the car with the lender having registered an interest or right on the said vehicle.

Fees

These are additional payments that you need to resolve with a lender besides having to pay for your loan repayments. Such fees can include account keeping fees, establishment fees and more.

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At Yes Loans, we inform you of all fees in advance so you won’t be surprised. Send us a message to know more.

Here are some frequently asked questions.

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Fixed Rate

A fixed rate loan means that the interest rate for that loan will stay the same for its entirety. For instance, you could get a loan with a 15-year amortization along with a five-year term. During the term, the interest rate will be locked in and you don’t have to pay anything extra in terms of interest.

Format Approval

This means that a loan has already been assessed by the lender and have met all of their conditions for approval.

Interest Rate

Interest rates are the costs when borrowing money from a lending agency and are expressed in percentage form. They are often used in loans for the purchase of cars, properties and even consumer goods.

Loan Assessment

A loan assessment or affordability assessment is the procedure in which a lender establishes if a consumer is capable of repaying their loan over a period of time. This type of analysis takes into account your incomings and outgoings to help them assess whether a loan is sustainable for your situation.

Loan Term

A loan term is the period of time between when a loan is received and when it needs to be fully repaid. Loan terms can last as long as ten years with shorter ones described as “short term” and those more than a year known as “long term”.

Paperwork

With regards to loan applications, paperwork is a culmination of all details that are needed from a consumer so that they can be assessed by a lender successfully.

Pre-Approval

This means that a lending agency has already approved your loan, albeit not yet officially. This is because further information may be required for the loan application to be fully accepted.

We help you get pre-approval right here. You can get help once we have your personal details to run some credit checks.

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Interested in getting a pre-approval for a certain loan? We at Yes Loans can help you out.

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PPSR Check

Personal Properties Securities Register or PPSR is a register on the Web that lets you know if a car you wish to buy has money owed to a finance company.

Repayment

The repayment is the amount of money that is required from a consumer to pay off their loan. Repayments can normally occur on a weekly, fortnightly or monthly basis.

Security

As a borrower, security is an asset they offer against the borrowed amount in a loan. This can be a requirement by lenders to minimize their risk in lending you a loan.

Secured Loan

This is the type of loan where an asset will be required from the applicant as security for their agreement. An asset could be in the form of a vehicle, property and the like.

Settlement

When a lender has already approved your loan formally, this means they will now start lending you the money for which you requested. You may obtain this finances in the form of cheques or direct payment.

Unsecured Loan

This is the kind of loan where an asset isn’t required by a lender as security for the loan.

Variable Rate

These types of loans means that their interest rates can change throughout the term.

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That wasn’t so hard to digest and it will really help you understand your loan agreement and details a bit more. The more you understand the more we can help you get the finance you want and approved. You never know when a family member or friend will be going through the same process seeking finance and you will have some knowledge on the topic or can refer them to this guide.

Would you like to know more about variable rate loans? Contact Yes Loans today!

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