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TAKE ME I’M

FREEIssue // 02 April 2013

By Kyabra Community Association& Fair Finance Australia

InsideHeed the WarningNo Interest Loans – A Local Economic StimulusWhy Paying your Loan Repayments on Time is now Very ImportantSnowed in by Debts? Snowball them Away...Financial LiteracyHome Energy Saver SchemeBank Statements...Boring!

Queensland Vehicle Registration Payment

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Heed the Warning

This is a new Government requirement and here at Fair Finance we think this is a great idea, as it reinforces the message we give to all people enquiring about our loans.

All loans including NILS should be about an asset purchase – that is an improvement in your quality of life. If you are seeking funds for day to day bills, this is a clear indicator that your income is not keeping up with your living expenses.

The new warning message is the same as what Fair Finance has been telling clients seeking a loan to pay their bills, that is: always first try and make a payment arrangement to pay off

your bill. If you have a genuine hardship case you should be successful. Consider a Centrelink advance if possible and/or talk to a free financial counselling service on 1800 007 007.

The warning is there because when someone is looking for small amounts of credit, then often other issues are at play. We think the best approach is to develop a plan based on your day to day budget, rather than just jump into more debt which may make your situation worse down the track.

Many of you may have seen a “Warning” notice on shopfronts and websites of small loan providers operating in Australia.

QUICK TIPALWAyS Try To MANAGe your overDue bILLS by MAkING pAyMeNT ArrANGeMeNTS

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No Interest Loans – A Local Economic Stimulus

one popular local retailer has received over $40,000 from kyabra NILS borrowers over the past two years.

In 2012 kyabra NILS helped families purchase locally:

kyabra No Interest Loans Scheme (NILS) are not only helping families on low incomes, but also contribute to the local economy with most of the loans provided to borrowers being spent at local retailers.

QUICK CONTACT

kyAbrA NILS P 07 3373 9499 M 0423 144 795

E communityfinance @kyabra.org

18 Refrigerators

15 Washing Machines

11 Computers

26 Other Household Appliances

8 Beds

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Why Paying your Loan Repayments on Time is now Very Important

If payments are missed or dishonoured then often fees apply and the lender is making contact to find out what happened. Most people do not realise that from March 2014, missed repayments dating back as far as December 2012 can be detailed on their credit report. This may impact on their ability to access credit in the future.

recent reforms to the Privacy Act 1988 (Cwlth) mean that

credit reporting agencies will be allowed to collect repayment history information (rHI) - that is, information about whether people have made or missed the full amount of a consumer credit payment. repayments made from last December will now be recorded.

This is part of the move from “negative” to more comprehensive “positive” reporting.

Most people know that it’s best to make loan repayments on time. This applies to both paying any credit card bills and having enough money in your account to pay direct debits from lenders.

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In addition to the current credit enquiries and any defaults, each loan and the repayment history will also be available. your recent good repayment history on a loan will often carry more weight than old defaults that may have been due to service provider disputes, major life hiccups or unemployment.

If you are trying to get your financial life back on track then establishing a good record

can make that much easier and quicker.

So, remember if you know you can’t meet a repayment, call your credit provider to organise a deferred payment or other arrangement on hardship. It is important to make a realistic arrangement you can keep, so you can keep a clean record!

QUICK TIP

ALWAyS CALL To CHANGe

repAyMeNTS To preveNT ArreArS oN

your CreDIT reCorD.

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Snowed in by Debts? Snowball them Away…

List all your debt balances and the minimum repayments required in the month. If you can’t meet all the minimum repayments each month then you need to negotiate some reduced repayments on the grounds of hardship. Any more loans or debt consolidation is a last resort and may not always work! Try and get all your minimum repayments well within your budget.

once you are meeting all minimum repayments, focus on the debt with the smallest balance and put any spare funds into extra payments on that debt. Soon it will be paid out, leaving you pleased to have one

less debt and feeling progress has been made. Then add that repayment to the repayment on your second smallest size debt which will now pay that out quicker. Just repeat this until you have your debts paid out or under control.

The trick is to always allocate the same amount in your budget each month to debt repayments, pay the minimum to all debts but make sure the smallest balance gets all the rest of the funds. As you pay out the smallest debt you are putting more into the next one, so speeding up your pathway out of debt. Hence the rolling snowball effect.

Do you have lots of debts and feel overwhelmed? A good approach is the “debt snowball” plan.

QUICK TIPreDuCING THe NuMber oF DebTS quICkLy brINGS peACe oF MIND

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Financial Literacy

It’s great to see that it’s now a hot topic in schools, but many of us missed out in the past and have had to learn the hard way – trial and error in the school of hard knocks!

The good news is that now with the internet it it’s easy to improve your money skills in the quiet and privacy of your home. Interested? Turn off the Tv and start surfing the web.

A good place to start and take control of your money is with a budget – find out how to make one at:

Money Smart (ASIC) - Australian Government Money Management Resources

Website: www.moneysmart.gov.au/managing-my-money/budgeting

or

Money Minded Money ToolsWebsite: www.moneyminded.com.au/tools/default.asp

both these sites have a huge range of advice, tools and even games to help you improve your money skills. play around and be surprised at how easy it is to learn new ideas and things you can do to improve your day-to-day behaviour around how you spend and allocate your money.

Financial literacy is the ability to understand how money works. The better you understand the ins and outs of your money, how to allocate it to your day to day bills and shopping, the easier it is to discover why you never seem to have enough!

QUICK TIP

DoING IT TouGH?

AuSTrALIAN bANkerS’

ASSoCIATIoN WebSITe IS A

GooD TooL To LeAD you To

THe beST SourCe oF

HeLp W www.

doingittough.info

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Are you?• Having trouble managing

your energy needs and bills

• At risk of having your power disconnected

• on an energy retailer’s hardship scheme

Call the brisbane Home energy Saver Scheme (HeSS) at youth & Family Services on 07 3826 1599 for more information.

HeSS staff can assist by offering:• Information about easy

and affordable ways to use less energy in the home

• one-on-one budgeting assistance

• Information on whether you are getting the right rebates and assistance

• Help to understand your energy bills and the energy market

• Advice, advocacy and support

• Links to other services that may be able to assist you; and

• help to access no or low interest loans to purchase energy efficient appliances.

electricity and gas costs form a large part of household bills. you may feel you don’t have much control over these costs, but a plan to save energy around your home and manage your money, no matter how little or how much you have, will help you feel more secure.

QUICK CONTACTFIND your NeAreST HeSS provIDer oN 1800 007 001

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Bank Statements…Boring!

bank statements will show what is going into your account, and what is going out. Do you know how much your bank is taking out?

Check your bank statements for:

ATM Fees (usually around $2)you can avoid these fees by using the ATM recommended by your bank. If you don’t have an ATM handy, it is cheaper to withdraw money through a “cashout” eftpos transaction than to use a non-bank ATM.

Dishonour Fees (usually around $10)This occurs when you have authorised someone to direct

debit your account but didn’t have sufficient funds in your account.

If this is happening a lot, check the direct debit is on the same day you get your income or benefit so funds are available. Alternatively, you can cancel the direct debit arrangement and pay by another means such as bpay.

Account Keeping Fees (between $5-$10 a month)If you are eligible for a Health Care card, you are eligible for a no-fee bank account. If you are on a Centrelink payment and you are paying account keeping fees, talk to your bank about changing your account.

Most people regularly get bank statements in the mail. you may want to throw them straight in the bin, but they are worth looking at.

QUICK TIP

CHeCk your DIreCT DebITS

HAppeN oN THe DAyS WHeN

FuNDS ArrIve IN your ACCouNT

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Queensland Vehicle Registration Payment

The problem with paying registration with a loan, is that by the time you have paid the last registration debt off, your car registration needs renewing and another loan may be the only way to pay it. but there is another way to pay your registration.

The queensland vehicle registration payment Card allows you to prepay your registration in small amounts so by the time your registration is due, most or all of the funds will be available to pay your rego.

Setting aside money for registration throughout the year can reduce the stress of big registration bills. Australia post provides a service that allows you to make small advance payments on car registration, to reduce the shock of the final bill.

To use this service, apply for a queensland vehicle registration Card at any Australia post branch in queensland.

you will need to supply vehicle registration details and proof of identity.

The queensland Department of Transport and Main roads will then mail a card to you within 28 days. present the vehicle registration payment Card at the post office every time you want to make a payment. you can make periodic payments as often or infrequently as you like and the minimum payment is $40.

Not all NILS providers will lend for registration and the card is much better than using your Centrelink advance which is best saved for other emergencies.

There are an increasing number of borrowers requesting a kyabra No Interest Loan for Car registration.

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QUICK TIP

pAy your CAr reGISTrATIoN

MoNTHLy vIA A reGISTrATIoN

pAyMeNT CArD

Apply for a vehicle Registration Payment Card in person at any Australia Post office in

Queensland

Provide Australia Post with registration details and proof of

identity e.g. a current drivers licence

You will receive a Vehicle Registration Payment Card by mail from the Department of

Transport and Main Roads within 28 days

Use the card to make advance registration payments at

any Queensland Post Office (minimum payment is $40)

When you receive your registration, present it at Australia Post or the

Department of Transport and Main Roads to pay the

outstanding balance

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Community Microfinance Reaching more people by recycling money by providing access to safe, fair and affordable credit.

www.fairfinance.com.auP: 07 3851 8080

www.kyabra.orgP: 07 3373 9499

Disclaimer: The information contained within this newsletter from all writers is provided for informational purposes only and is not intended to substitute obtaining professional financial advice.

NILS (No Interest Loan Scheme)Interest free loans up to $1,200 for new household assets (whitegoods and furniture), educational, medical and basic household repairs.

To locate your nearest NILS provider visit www.goodshepherdmicrofinance.org.au.

Alternatively:

Call: 07 3851 8080 Email: fairfinance@foresters.org.au Website: www.foresters.org.au

Call: 07 3373 9499 Email: communityfinance@kyabra.org Website: www.kyabra.org

StepUP Loans Low interest loan from $800 to $3,000 over 1 to 3 years for asset purchases such as whitegoods, cars, computers, medical expenses and house repairs.

Where: Logan east Community Centre Call: 07 3808 4529 Email: stepup@lecna.org.au

Fair Finance Loans personal loan from $800 to $4,000 over 1 to 2 years for any worthwhile purpose Call: 07 3851 8080 Email: fairfinance@foresters.org.au Website: www.foresters.org.au