Living the dream is only possible if you have the funds to support the dream. Without the funds, the dream quickly becomes a nightmare from which you may struggle to wake from. Finance or money lending as it was traditionally known as, is for many people the manner in which they fund their dreams or even their everyday lifestyle. In tougher times, securing finance can be more challenging especially when banks are reducing the Low Value to Ratio Debt allowance – basically this means, they are being more selective about who they lend to. There are few tips that you can take care of before heading to a bank or other lender to secure that car lease or even home loan.
How to get financing in today's market
- Get your ducks in order. By this I mean, get all the relevant paperwork ready before you even approach the bank or lender. You will need proof of income – so at least 3 months’ pay slips, bank account statements; any tax file numbers and importantly proof of your expenses.
- Reduce your expenses. Pay off any outstanding debits, hire purchases and reduce the limit on your credit card. These are all expenses a lender doesn’t want to see as they detract from your ability to pay off any future lending.
- Plan ahead. Determine how much you need and try to save at least 10% of this yourself BEFORE seeking a loan. This will show the lender that you can save. Most banks will require between 10-20% for a deposit for a home. Car dealers will often require a 30% deposit.
- Take control. Finally remember that if you secure a loan, you need to service this loan regularly and consistently, otherwise it will make it harder to secure future finance.
And if you are, like many of us, struggling to save, look for a lender that will take a smaller deposit. There are more reputable lending businesses available that take a smaller upfront deposit to let you drive away in a car. content by: Donna Slater