By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

Setting a household budget is one of the most effective ways to take control of your finances. Whether you’re planning to save for a big purchase, cut down on unnecessary spending, or simply make sure your bills are covered each month, a budget can help you stay on track. At Natloans, we know how important it is to maintain a healthy financial outlook, and we’re here to support you every step of the way.

In this article, we’ll cover the top 5 tips for setting a household budget to help you achieve your financial goals. Plus, we’ll show you how to make sure you’re getting the most competitive interest rates on your loans and where to find helpful tools, like the government’s free budget planner.

1. Track Your Income and Expenses

The first step to creating a successful household budget is knowing exactly how much money you have coming in and going out each month. List all your sources of income, including your salary, any side jobs, or government payments. Then, write down all your expenses—everything from rent or mortgage payments, utilities, groceries, and transportation costs, to entertainment and dining out.

By having a clear picture of where your money goes, you can start to identify areas where you may be overspending. A great tool to help you get started is the Australian Government’s Budget Planner, which makes tracking your income and expenses easy and straightforward.

2. Set Clear Financial Goals

Budgeting is easier when you have clear goals in mind. Whether you’re aiming to pay off debt, save for a holiday, or build an emergency fund, having specific financial targets can keep you motivated. Set both short-term and long-term goals, and make sure they’re realistic and achievable.

When you have a clear sense of what you’re working towards, sticking to your budget becomes much more meaningful.

3. Categorise Your Spending

Once you’ve tracked your income and expenses, it’s time to categorise your spending into needs and wants. Essential expenses, like rent, bills, and groceries, fall under the “needs” category, while non-essential items, like eating out, entertainment, or new clothes, belong in the “wants” section.

By categorising your spending, you’ll be able to see where you can make cuts if needed. For example, reducing your spending on “wants” can help you save more quickly or pay down debts faster.

4. Review Your Interest Rates on All Loans

Another crucial aspect of managing your household budget is making sure you’re not paying more than you need to on your loans. Regularly checking that you have a competitive interest rate on your home loan, personal loans, and credit cards can save you thousands over time.

At Natloans, we offer free loan reviews to help you ensure you’re always getting the best possible rate. Whether it’s refinancing your home loan or consolidating your debts into one simple payment, we’re here to help you reduce your financial burdens and maximise your savings.

5. Adjust and Monitor Your Budget Regularly

Your household budget isn’t something you create once and forget about. As your financial situation changes—whether it’s a salary increase, new expenses, or changes in your goals—it’s important to adjust your budget accordingly.

Make it a habit to check your budget regularly, at least once a month, to see if you’re sticking to it and where you might need to make changes. If you need help with budgeting tools, the MoneySmart Budget Planner is a free and reliable tool to keep your finances in check.

Natloans is Here to Help You Save

Setting a budget is just the first step in achieving financial success. Ensuring that you’re getting the best deal on all your financial products is equally important. At Natloans, we’re committed to helping you:

• Consolidate your debts for easier management.
• Refinance your home loan to secure a better interest rate.
• Access business loans to support your cash flow.

Contact us today to see how we can help you with a free review of your current loans and interest rates. By acting now, you can save more and get your finances in the best shape possible for the future.

Ready to take control of your finances? Get in touch with Natloans today!

Good news!

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

Natloans is absolutely thrilled to announce that we’ve been awarded AFG’s Best Personal Loan Broker of the Year 2024 for Victoria and Tasmania! ???? This prestigious recognition is not just an accolade—it’s a testament to the trust and loyalty of our amazing clients and the relentless dedication of our incredible team.

What Affects Your Interest Rate?

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

When taking out a car loan, there’s one question most borrowers focus on—what interest rate will I get? That magic number lenders offer you can greatly impact your overall cost, but how is it determined? What factors can you control, and what’s out of your hands?

At Natloans, we understand that securing the best possible rate is crucial for your financial well-being. That’s why we’re here to help you navigate the process and make informed decisions. Let’s break down the key factors that influence your interest rate and what you can do to improve your chances of getting a favourable deal.

Factors That Influence Your Interest Rate

Lenders don’t simply pick a number out of a hat. They assess various elements of your financial situation, the loan itself, and even the vehicle you’re purchasing. Here’s a closer look at what affects your rate:

1. Credit Score Your credit score plays a huge role in determining your interest rate. The higher your score, the more trustworthy you appear to lenders, which generally translates into lower rates. If your score is low, consider taking steps to improve it before applying.

1. Car Type and Age The type of vehicle you’re buying matters too. New cars, especially green or energy-efficient ones, often qualify for better rates because they hold value longer and may come with incentives. Older vehicles may be seen as riskier investments, leading to higher rates.

1. Loan Term The length of your loan can significantly impact your interest rate. Shorter loan terms usually mean lower rates, as lenders get their money back faster and take on less risk. While longer terms might seem attractive for smaller monthly payments, they often come with higher interest rates in the long run.

1. Lender Choice Different lenders offer different deals. Some specialise in certain types of loans or customers, so it’s crucial to shop around and compare options. Working with a finance brokerage like Natloans can streamline this process, ensuring you get access to the best possible rates.

1. Fixed vs. Variable Rates Do you want the security of knowing your repayments will stay the same over time, or are you comfortable with fluctuations in the market? Fixed rates provide stability, while variable rates can go up or down. Your personal preference and risk tolerance play a big role here.

1. Financial Situation Lenders assess your overall financial health when determining your interest rate. Your income, debts, and savings all contribute to this evaluation. The better your financial situation, the more likely you’ll be to secure a lower rate.

1. Employment Stability Having a steady job shows lenders you can reliably make payments. If you’ve been with the same employer for a while, it adds to your credibility. On the flip side, frequent job changes or periods of unemployment can result in higher rates.

1. Home Ownership Owning property makes you a safer bet in the eyes of lenders. If you own your home or have substantial equity in it, you’re more likely to get a favourable interest rate compared to someone who rents or has little to no equity.

1. Loan Amount Interestingly, the size of your loan can influence your rate. In some cases, larger loans come with smaller rates, though this can depend on the lender and specific circumstances.

1. Loan-to-Value Ratio (LVR) The LVR is the amount you borrow compared to the value of the car you’re buying. The lower the LVR, the better your interest rate could be. Essentially, if you put down a bigger deposit, you’ll likely get a better deal.

How Natloans Can Help You

Navigating all these factors can be overwhelming, but that’s where we come in. At Natloans, we do the heavy lifting for you by assessing your unique situation and finding the right lender and loan to fit your needs. Here’s how we can assist:

• Comprehensive Loan Comparisons: We work with a wide range of lenders, allowing us to find you the best rates tailored to your circumstances. We’ll present options that fit your financial profile and goals, so you don’t have to waste time shopping around.

• Credit Score Advice: If your credit score isn’t where you want it to be, we can offer practical steps to help improve it before applying for a loan, increasing your chances of securing a lower rate.

• Tailored Loan Terms: We’ll help you find a loan term that balances affordable repayments with a competitive interest rate, ensuring you’re not paying more than you need to in the long run.

• Fixed vs. Variable Guidance: Unsure whether to go for a fixed or variable rate? We’ll explain the pros and cons based on your financial goals and help you choose the option that best suits your needs.

Steps You Can Take

While we’re here to guide you through the loan process, there are a few things you can do to help improve your chances of securing a great rate:

• Work on Your Credit Score: If possible, pay down outstanding debts and make sure your credit file is in good standing before applying for a loan.

• Consider a Larger Deposit: A bigger deposit can lower your LVR and help secure a better rate, so consider saving up a bit more before finalising your car purchase.

• Be Ready to Show Financial Stability: Gather documentation like proof of income, assets, and employment history to show lenders that you’re a reliable borrower.

Ready to Get Started?

If you’re ready to secure the best possible interest rate and protect your financial future, Natloans is here to help. Give us a call at 1300 955 791 or hit the button below, and our team of experts will guide you through the process, ensuring you get the loan that’s right for you.

Australia’s Economic Update: Key Insights from the June Quarter 2024 ABS Data

By Mary Nebotakis, B. Eco, Dip. Financial Services, Managing Director, Natloans

On September 4, 2024, the Australian Bureau of Statistics (ABS) released its latest data on the Australian economy for the June quarter 2024, revealing modest growth amid ongoing challenges. Here’s a summary of the key findings that shape the current economic landscape:

Modest GDP Growth Amid Slowing Per Capita Performance

The Australian economy grew by just 0.2% in the June quarter of 2024, contributing to a 1.5% increase over the 2023-24 financial year. This marks the eleventh consecutive quarter of GDP growth, but also the sixth straight quarter of declining GDP per capita, which fell by 1.0% over the year. The fall in GDP per capita highlights a slowing pace of economic growth when adjusted for population increases.

Inflation Dynamics: Headline Inflation Rises, Underlying Inflation Eases

The latest data showed mixed signals on inflation. The Consumer Price Index (CPI) rose by 1.0% in the June quarter, pushing annual inflation to 3.8%, the first increase since December 2022. However, underlying inflation (trimmed-mean inflation) continued to fall, indicating that some inflationary pressures are beginning to moderate. Notably, prices were higher for goods such as new dwellings, fuel, and fresh produce like fruits and vegetables.

Wage Growth Persists, but Momentum Slows

Wages continued to grow, with the Wage Price Index rising by 0.8% for the June quarter and 4.1% over the year to June 2024. Private sector wages increased by 0.7%, marking the equal lowest quarterly rise since December 2021. This data suggests that while wages are growing, the pace of increase is slowing, reflecting a tightening labour market.

Labor Market Remains Tight, but Unemployment Edges Up

The labour market stayed tight, but there were signs of slight softening. The unemployment rate rose to 4.1% in June, up slightly from March. Meanwhile, total hours worked increased by 1.1% during the quarter, although this growth was below the levels seen in the June quarter of 2023. These figures indicate that while employment remains strong, the rate of expansion is slowing.

Decline in Household Spending and Savings

Household spending fell by 0.2% in the June quarter, following a 0.6% rise in the March quarter, as consumers cut back on discretionary spending, particularly for events and travel. Spending on essentials like food also declined by 1.0%, reflecting efforts to reduce grocery bills amid rising costs.

Household savings remained low, with only 0.9% of income saved over the year — the lowest rate since 2006-07. This decline in savings reflects the challenge of household incomes growing slower than spending.

Government and Trade Contributions to Growth

Government spending on frontline services rose, adding 0.2 percentage points to economic growth in the June quarter. This increase was largely due to higher spending on government benefits for households, particularly in expanding health services.

Trade also contributed positively to growth. Exports rose by 0.5%, led by a strong recovery in travel services, which surged by 9.9%. Meanwhile, imports fell by 0.2%. However, a decline in bulk commodity prices and increased payments to non-residents resulted in the largest current account deficit since June 2018.

Capital Investment Weakens

Total capital investment fell by 0.1% in the June quarter, driven by a 1.6% decline in business investment in new machinery and equipment, particularly in the agriculture and retail sectors. Despite the decline, business expectations indicate that capital investment may rise moderately next financial year.

Conclusion: A Complex Economic Landscape

The latest ABS data highlights a complex economic picture, with modest GDP growth, rising inflation, wage growth, and a tight labour market counterbalanced by declining household spending, low savings, and weaker capital investment. The mixed signals suggest that while the Australian economy continues to expand, significant challenges remain.

At Natloans, we understand the importance of navigating these economic complexities. Whether you’re looking to refinance, purchase a home, or explore investment opportunities, our team is here to help you make informed financial decisions. Contact us today to learn more about how we can support you in achieving your financial goals amidst changing economic conditions.

Short Term Business Loans

How Short Is Short-Term?

In general, when we discuss short-term Business Loans, the life of the loan in question is usually between the range of three, and twelve months. Therefore, right off the bat, it must be understood that such a loan is most suitable for companies which turn over a high income in short periods, so as to be able to keep up with their repayments.

What Kind of Loans Are Best?

Here are a few of the most commonly pursued options:

1. Business Credit Card

We begin our list with the exception to previously outlined rule. This sort of finance option, obviously, is not a loan, and not a thing which is, itself, supposed to be repaid for. Instead, it is the expenditures which are bore by the card that must be eventually repaid, usually, within a certain window, free of interest.

The company credit card is a staple of small business, with roughly 70% of all small businesses in Australia being in possession thereof. It is incredibly useful for the day-to-day expenditures, such as stationary, equipment, and events on short notice.

2. Unsecured Business Loans

For our second type of short-term business loans, we will move on to a more traditional loan solution. An unsecured business loan is simply a business loan wherein one is granted, by their lender, a sum of money which they can spend at their discretion. The loan is not secured against any capital, such as a car, piece of equipment, or building, and hence the name ‘Unsecured Loan’.

These usually have a short life-span (think 3-12 months), and can be supremely useful for a company seeking to expand in some way, and needing funds to cover the costs of a large-scale project.

3. Line of Credit

This a a type of loan, the value of which will be determined based upon your business’s bank statements — typically accrued over the course of the past three months — whereby a average turnover for your business is measured by the lender. Depending on the industry in which you work, a lender could give you about eighty percent of the turnover which they had measured.

Keep in Mind

Short term loans are usually repaid upon a weekly basis, so as to minimise their impact to business cashflow, and usually take course over twelve to twenty-four months.

(Short term loans usually are weekly repay (no impact on cashflow) usually between twelve and twenty four months god thing about that is you’re paying less interest charges)

Firstly, What Is “Refinancing A Loan?”

To put it simply, ‘Refinancing a Loan’ is the practice of swapping your current mortgage for another one with more desirable rates, length, and terms. In so doing, one may half the length of their loan term, and take a significant bite out of the overall cost of their loan. Therefore, refinancing a loan seems to hold self-evident advantages, but it is best to keep in mind the few drawbacks and risks which refinancing entails. These pros and cons will be divulged further in this article, but to begin with, an attempt will be made to familiarise the readers with the functions and mechanisms of refinancing a loan.

How Does It Work?

The way in which refinancing is achieved is simply by moving your mortgage from your current lender to a new lender, with such a decision being motivated by shorter terms, lower rates or various other, aforementioned elements. ‘Simply’, of course, is something of a misnomer, because whilst the action itself is uncomplicated, the task may well be. The decision to undergo as such is, of course, a very significant one, and should only be embarked on after very long consideration.

When you take the leap, your new lender will pay off the rest of the money which you owe to your old lender, and then make it so that you must now pay off a new, lower sum of debt to them in-stead.

What Are The Advantages?

There are two, seperate advantages which come depending on the type of shift which you make with your mortgage.

• Firstly – If you choose to move to a repayment plan which is shorter, let’s say; 10 years rather than 20 years, then that means that you’ll be free of debt, and the proud owner of your own home in half that time that it would’ve taken with your old plan!
• Secondly – If you choose to move to a repayment with a lower interest rate, than that means that you’ll be paying less interest on the same property, over the same course of time, and thereby saving yourself potentially tens or hundreds of thousands of dollars in the process!

What Are The Disadvantages?

The one big, true and glaring disadvantage associated with refinancing a loan is the expenses which one can incur, in their attempt to save time and money. If you plan to refinance for the sake of saving time, then this is probably of less concern to you, but nonetheless it mustn’t be discounted just how expensive the process can become.

It always costs a not-insignificant fee in order to take out a loan, and the fact of one’s having taken loan with their original lender does not mean that the service to the new lender can go unpaid for. Adding to that, sometimes lenders will ask you to pay them a fee for having departed with their services, and thereby shorted the investment which they had made in you, your home, and your loan.

Sometimes, it can go a long way to know what the break cost is for your current loan. At certain periods, the cost of breaking from one lender, and switching to another can be so great that it undermines the benefits of doing so all together. In summation; do your research!