Bad Credit
If you have black marks on your credit file, it does not mean you can’t get a loan.
Your credit file is administered by Veda Advantage in Australia. This organisation is the reporting body for all credit enquires you make. It is also the body who is notified is you don’t repay your commitments.
If you have a problem with your credit file it is best to deal with it upfront and not try to hide the fact.
Often there are late payments which you might think are a problem. These instances don’t necessarily mean that you have a problem so it is best to apply directly to Veda Advantage for a report. This inquiry does not leave a mark on your file and costs are $36.95. It will give you peace of mind once you know the facts.
Bad Credit Lenders
There are many lenders in the market place who handle loans to clients who don’t have a clean record. These lenders have different ways about giving credit. They don’t have Lenders Mortgage Insurance generally. They may have a risk fee applicable but your MPG consultant will take you those these option. The standard amongst all these lenders is risk for rate. The higher the risk to the lender the higher the rate. Some apply the same logic to fees.
Are You Eligible
If you have secure and regular employment and you are not currently Bankrupt you could qualify for this type of loan.
Generally you must be discharged from Bankruptcy for 12 months prior to a lender considering you for a loan but there are exceptions.
Credit Card Debt
In today consumer based society it is easy to be lured into easy credit. Let’s face it they even send you a pre approved credit card in the mail.
The thing to remember is this is a loan and you have to pay it back and on time. The other thing to remember is that the interest rates on credit are considerably higher than normal loan at around 20%.
Some people find this an easy way to control their finances but other of us get into trouble with easy credit. At MPG we have help on customer out of problems despite him have $147k in credit card and personal loans. Debt Consolidation may be the way to go.
Unpaid Home Loan Repayments
An unpaid home loan repayment is probably the most serious of bad debt stories. Generally there are good reasons for missed or late repayments.
Most lenders in this field rely on the story behind how a customer got into a particular situation rather than judging the person like a lot of the traditional banks do.
This is where your MPG consultant comes into the picture. Your consultant will ask you to give them the whole story on how you came to be in this situation. Please don’t leave anything out as the lender may decline your loan if other facts come to light after the application is lodged.
What the lenders Look for
In today’s tight credit market most lenders are concerned that if a client is in trouble the client may try to “borrow” their way out of their situation. Because of this a lot of lenders become concerned when they see multiple applications for credit. Some more conservative lenders are limiting the number of enquires to 4 in the past 6 months.
Take the hit. If you think you are in trouble get help rather than try to fix this your self. Sometimes your efforts to fix the situation make our job harder or impossible so ask for professional help early.
What are my repayments and fees likely to be
As we have previously pointed out lenders in this part of the market base their costs on your situation. This will dictate the interest rate and upfront and indeed the ongoing fees.
If you have a small credit card debt the traditional lenders won’t look at your loan application in today’s market.
The rates for this type of situation are around the 2% above the bank standard variable rate.
If you have multiple entries on your Veda Advantage report then look to pay from 4% above the bank standard variable rate but this would be discussed at length with your MPG consultant.
The rule of thumb is not to worry too much about the interest rate. The thing that should most concern you is the repayment. By accepting your situation and coming to realisation that there is a problem and accepting that fact that you can get your self out of the situation by making your repayments on time will go along way to resolving what could be a devastating life event. That is loosing your home. It is up to you and only you to make the decision to fix the problem now or start all over again.
