On the hunt for a new loan provider?

August 8th, 2019 by

One in 10 consumers have switched credit products in the past year, according to new research, with Millennials and women in particular pouncing on offers from small banks, credit unions and building societies.

The financial landscape is shifting.

Over the past 12 months, 10% of consumers have switched credit providers, according to the Australian Consumer Credit Pulse 2019 report from Equifax, as once-loyal customers increasingly check out what lenders outside the Big Four banks have to offer.

Is now a good time to consider a switch?

With the RBA recently delivering back-to-back rate cuts, there’s no shortage of borrowers who are considering following suit and switching things up.

In fact, a further 11% of consumers intend to apply for credit in the next three months, says Equifax, and of these, half are looking to switch providers when they make their application.

James Forbes, General Manager, Marketing Services at Equifax, says that over the past 12 months the Big Four banks have ceased to be the first preference for many consumers who are switching credit products.

“Instead, they’re increasingly choosing small banks, credit unions and building societies,” Forbes says.

So what credit products are people switching?

Home loans and credit cards. They’re the big two.

Of the one in 10 people who made the switch over the past year, a quarter moved their home loans and nearly half moved their credit cards.

Home loans are also a popular product among the 11% of consumers intending to apply for credit in the coming months, making up half of the intended applications.

Who’s switching things up?

According to the report, the younger you are, the more likely you are to switch lenders.

In fact, out of all consumers who switched credit products in the past year, 43% were aged 18-34, and 32% were aged 35-50.

Women are also more likely to switch three or more of their credit products, while men are likely to switch just one or two.

What’s driving the behaviour?

Unsurprisingly, lower costs – including interest rates and fees – were the major consideration for switching across all credit product types, Equifax says.

However, consumers also cite better customer service and brand reputation as important considerations.

“In the wake of the Royal Commission, consumers are increasingly thinking about more than just cost when applying for credit,” says Forbes.

Keen to pounce?

With the RBA recently delivering back-to-back rate cuts, if you haven’t looked into your refinancing options lately, now might be the time to consider doing so.

Rest assured that we’re following the market closely and will be happy to run you through some mortgage and refinancing options if you’re on the hunt for a new lender.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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Time’s ticking: ATO to report overdue tax debts to credit agencies

August 1st, 2019 by

Businesses that put off paying large tax bills for too long may soon find that the Australian Taxation Office (ATO) has notified credit reporting bureaus.

The proposal is part of The Treasury Laws Amendment (2019 Tax Integrity and Other Measures No.1) Bill, which was recently introduced into parliament.

The Bill will provide the ATO with the discretion to disclose to credit reporting bureaus when a business has a debt of $100,000 for 90 days or more.

“This will reduce the unfair advantage obtained by businesses who do not pay their tax debts and will encourage businesses to engage with the ATO to manage their tax debts,” says assistant treasurer Michael Sukkar.

Credit reporting bureau CreditorWatch adds: “By (the ATO) disclosing this information, the default would be visible on a commercial credit report and the credit scores of companies could be negatively affected.”

Will it be a hard and fast rule?

Unlikely – the key word above is “discretion”.

Mr Sukkar says it will apply to “particular businesses that are not effectively engaging with the ATO to manage their tax debts”.

So, if this applies to you and your business, the most important thing you can do is not bury your head in the sand.

This might apply to me – what are my options?

First, get in touch with the ATO, which encourages businesses to engage with it to manage their tax debts. You may be able to enter into a “sustainable payment plan” that is agreed upon by both parties.

However, not everyone enjoys the ATO impatiently hovering over their shoulder waiting for them to pay off a large tax debt.

If you’re one of those people, it’s definitely worth getting in touch with us to explore some of your other options with business loan lenders.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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Planning ahead: RBA says expect long-term low interest rates

August 1st, 2019 by

Good news for mortgage holders this week, with the RBA saying “it’s reasonable to expect an extended period of low interest rates”.

Figures released on Wednesday show that core inflation, the RBA’s preferred measure, is currently at 1.4%.

However, Reserve Bank of Australia (RBA) Governor Philip Lowe says it is highly unlikely the RBA will contemplate higher interest rates until it’s confident that inflation has returned to 2-3%.

“Whether or not further monetary easing (aka further rate cuts) is needed, it is reasonable to expect an extended period of low interest rates,” he said in a speech.

“On current projections, it will be some time before inflation is comfortably back within the target range.”

Will the RBA cut rates further this month?

The RBA will meet again on Tuesday, however it’s appearing increasingly unlikely that it will cut rates for a third consecutive month.

That’s because June quarter inflation figures released on Wednesday narrowly beat out the market’s expectations (+0.5.%) with a rise to 0.6%.

As a result, most experts are predicting that will be enough to postpone a third RBA rate cut to 0.75%, but not enough to prevent it from happening between now and the end of the year.

Get in touch

If you want an update on what the RBA’s latest comments on long-term low-interest rates mean for your current home loan situation, then get in touch.

We’re following the market closely and will be happy to run you through some mortgage and refinancing options.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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How criminals steal your identity to steal your money

July 25th, 2019 by

Scams involving identity theft have cost Australians at least $16 million this year, and that figure is likely to be just the “tip of the iceberg”, says the Australian Competition and Consumer Commission (ACCC).

Worryingly, four in every 10 Scamwatch reports so far in 2019 have involved an attempt to gain information or the actual loss of a victim’s information.

“If you think scammers might have gained access to your personal information, even in a scam completely unrelated to your finances, immediately contact your bank,” says ACCC deputy chair Delia Rickard.

“Timeliness in alerting your financial institution is absolutely crucial.”

Identity thieves can empty victims’ bank accounts, take out tens of thousands of dollars in bank loans under victims’ names, and purchase expensive furniture or electronics under ‘no-repayments for 12 months’ schemes.

“Identity thieves can make victims’ lives a nightmare. They’ll change the victims’ phone carrier so they lose service and set up mail redirections so they’re in the dark about what’s going on,” says Ms Rickard.

You might not even know until you apply for finance

Here’s the really scary bit, though.

You might not even know you’ve fallen victim to identity theft until the day you have difficulty obtaining finance due to an inexplicably bad credit rating, points out ASIC.

This is why it’s important to regularly check your credit report, which you can do for free every year via MyCreditFile.com.au (Equifax) or CheckYourCredit.com.au (illion).

ASIC says if you’re a victim of identity theft you should tell the credit reporting agencies so they can note it in your file.

“Check your credit report to see what companies have checked your credit history recently, and let them know not to authorise any new accounts in your name,” ASIC adds.

You can also consider placing a temporary ban on your credit report to give you time to report the matter to police, and then send the police report to the credit agencies.

While the freeze is in place (initially 21 days, but it can be extended), the credit reporting agencies cannot share your credit report with credit providers without your consent.

If you can prove you weren’t responsible for the fraudulent transactions then you’ll hopefully be able to get your credit score fixed.

How people fall victim to identity theft

Some of the common ways that scammers obtain personal or banking information include:

– phishing emails and text messages which impersonate banks or utility providers seeking your login details
– fake online quizzes and surveys
– fake job advertisements
– remote access scams in which the scammer has direct access to everything on your computer
– sourcing information about you from social media platforms
– direct requests for scans of your driver’s license or passport, often in the course of a dating and romance scam.

“No one is really selling an iPhone for $1, or rewarding the completion of a survey with expensive electronic goods or large gift vouchers. They’re scams to get your valuable personal information,” says Ms Rickard.

If you’ve fallen victim to identity theft

Be alert to the signs of identity theft, says Ms Rickard.

“If your mobile phone suddenly loses coverage, you haven’t received expected electronic or physical mail, or you receive unexpected notifications from a financial institution, call your bank,” she says.

If you have been the victim of identity theft, contact IDCARE on 1300 432 273. IDCARE can guide you through the steps to reclaim your identity.

People can also report a scam to the ACCC via Scamwatch.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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Got a spare pineapple? Pay off your mortgage faster

July 18th, 2019 by

Reckon you could scrounge together an extra $50 each week to pay off your mortgage? If so, latest modelling shows the average household with a $400,000 loan could save $46,992 and pay off their home loan four years faster.

This week we’re going to look at the benefits of paying just a little bit more off your mortgage each week.

Now, this is quite a timely subject because the RBA has just delivered back-to-back cash rate cuts, so even if your monthly repayment amount has been reduced, there’s a lot to be gained by sticking to the same amount you’ve been paying over the last few years.

Breaking it down

One of the biggest problems people run into when trying to pay off their mortgage faster is trying to do so in big, irregular lumps.

It helps a lot more if you break it down.

So instead of trying to pay an extra $150 to $300 extra each month, break it down to a weekly amount that you can actually commit to, like $20 to $50 a week (or $3 to $7 a day – basically one or two takeaway coffees).

Breaking it down into smaller figures also helps reinforce good habits, and can help with your family’s cashflow.

Below, we’ll look at some modelling conducted by AMP that shows the benefits of setting up a weekly direct debit that will automatically pay an extra $20 to $50 a week off your mortgage.

What an extra $20 (aka a lobster or mud crab) a week gets you

– $400,000 loan: save $21,281 in interest and pay it off 1 year and 9 months faster

What $50 (aka a pineapple) a week gets you

– $400,000 loan: save $46,992 in interest and pay it off 4 years faster

What $100 (aka a lime) a week gets you

– $400,000 loan: save $78,828 in interest and pay it off 6 years and 11 months faster

Check out the full list here, which covers loans of $300,000, $500,000 and $1 million. All the calculations assume that you’re five years into a 30-year average home loan.

Get in touch

If you want some more tips on paying off your mortgage sooner – or you want to discuss your refinancing options – then get in touch.

We’ve got plenty of ideas up our sleeve and always love sharing what we’ve learned with our clients.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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