Shop around for the best debt deal.

There will come a time in your life when you’re faced with deciding whether to borrow money. You may be a student needing some funds to pay bills or buy a car or perhaps you’re considering buying a car or a home.

Debt isn’t necessarily a bad thing as long as you stay in control of your borrowings and use them for your personal gain and not for an impulse buy.

Having made the decision to borrow, where do you go the bank you’ve been with for a few years, a local credit union, a finance company such as GE Money, a mortgage broker, or even that quick-approval lender advertising on late-night TV? There is a long list of lenders and each one suits a different borrower and profile.

The purpose of your borrowing will be one factor in determining where you turn, as will how long it will take to pay back the money your credit card might be the no-fuss way to buy something you can afford to pay off in a month or two, especially if you have a card with a low interest rate.

The key is to shop around interest rates and loan fees can vary widely, so sniff out the best deal. But make sure you stick with reputable lenders, and check your loan contract carefully!

Non-conforming lenders

Apart from the mainstream lenders, an alternative source of funds is the non-conforming lender. These finance providers are more willing to lend to people who may not pass the credit tests imposed by others but it usually comes at a cost.

Non-conforming lenders usually charge a higher rate of interest because of the perceived higher risk in lending to someone with a poorer credit history. This penalty could amount to thousands of dollars over the life of a loan, so think carefully before going down this path. Potentially if you are making a purchase such as a car, when it comes time to sell it you may find the loan balance is far greater than the value of the car which will create a problem.

This type of loan is used by people who have yet to establish a solid credit rating, by those who for various reasons don’t want to disclose the degree of financial detail required by other lenders, and by casual workers and small business people who don’t have the sort of steady income preferred by other lenders.

One or two years of on-time loan repayments under these arrangements can help establish a good credit record.

Once that is achieved it may be best to go back to a Mainstream lender such as a bank.

You do need further assistance or help with your current Debt Situation, give Debt Negotiators a call on 1300 351 008 and we can help you to consolidate and pay off these debts with one easy payment or point you in the right direction.