home in hands with money image

Many homeowners and property investors are taking advantage of low interest rates to re-finance, so why shouldn’t people with personal loans and credit cards be doing the same?

The balance of power has tilted back towards borrowers and consumers, and now is the best time in decades to beat the banks at their own game, and pay as little interest as possible.

And less money for the banks is more money for you and your family to spend on the good things in life, such as holidays and entertainment.

With the changing financial services landscape, the banks are being challenged by new market entrants, such as Peer-to-Peer lenders with a completely different way of doing business.

A Good Example: Try our free Credit Score widget now to see what you’re credit score is instantly and whether you should be getting a better deal.

In this environment, it’s possible to beat the banks not just by reducing the amount of interest you pay to them, but not to use a bank at all for key financial services.“

While mortgage rates will always be a highly competitive segment that move with changes in the cash rate-  the major banks continue to offer personal loan interest rates well in the double digits

Pssst. Have you heard of Peer-to-peer lending? 

With the standard credit card rate at the end of last year hovering around 19.75% according to the RBA, non-bank lenders – or peer-to-peer lenders (P2PL) such as SocietyOne – are offering a more competitive rate.

While Australia’s big four banks are enjoy healthy margins, they also have to consider costs, such as national branches, temperamental IT systems and big marketing campaigns. However, new financial technology companies have smaller overheads and can offer a competitive alternative using cutting-edge innovation.

And it’s not just about getting a good rate. Following great success in the US and UK, peer-to-peer lending is gaining popularity in Australia because:

– It brings investors and borrowers together in a secure, online financial marketplace where their identity is protected.

Rates are based on personal credit history – the better your credit, the lower the rate.

Personal loan rates can be up to 4% lower than the average rates of the major banks.

– It’s an online application with a fast approval process – with funding within 72 hours.

So instead of paying the minimum credit card amount every month, an unsecured personal loan can consolidate that expensive card debt into one easy-manage debt facility at a lower interest rate.

Already have a personal loan? Then switch to a better rate 

If you’ve already taken up a personal loan, particularly at a time when rates were significantly higher, you may benefit from switching to a new loan.

Your existing loan may have an early exit penalty fee for repaying the loan in full before the agreed term. But in many cases these exit fees are more than compensated by the savings delivered by locking in lower rates.

Contact your credit provider to find out how much the penalty might be, and then compare market rates with other lenders.

There are better options available

At the most basic of all criteria – price – comparison sites like RateCity and Finder will show that many of the smaller lenders are offering rates well below those of the major banks.

While mortgage rates will always be a highly competitive segment –  the major banks continue to offer personal loan interest rates well in the double digits.

New to bank borrowers also face a tortuous application and approval process, sometimes requiring a personal visit to a branch, confusing and time-consuming paperwork and then a lengthy wait for a decision and funding.

This makes other options such as going directly to investors through peer-to-peer lending so much more appealing.

Beat the banks 

Being aware of these alternatives and evaluating their value proposition is a smart move for people looking for a better deal and to save time and money with their personal finance.

In a more competitive market, being aware of the new choices is one way to beat the banks in 2015.

Courtesy of Abey Malouf


Henry Sapiecha

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The surprisingly simple way Utah solved chronic homelessness and saved millions

Posted by Henry | COUNTRIES,HOMELESS PEOPLE,RENTING | Saturday 18 April 2015 8:41 am

One American social researcher came up with a radical way to help street people.

Give homes to the homeless.

man in a wheelchair makes his way to the homeless shelter in Salt Lake City as a major storm blows into Utah image

A man in a wheelchair makes his way to the homeless shelter in Salt Lake City as a major storm blows into Utah. Photo: AP

The story of how Utah solved chronic homelessness begins in 2003, inside a cavernous Las Vegas banquet hall populated by droves of suits. The problem at hand was seemingly intractable.

The number of chronic homeless had surged since the early 1970s. And related costs were soaring. A University of Pennsylvania study had just showed New York City was dropping a staggering $US40,500 ($52,000) in annual costs on every homeless person with mental problems, who account for many of the chronically homeless. So that day, as officials spitballed ideas, a social researcher named Sam Tsemberis stood to deliver what he framed as a surprisingly simple, cost-effective method of ending chronic homelessness.

Give homes to the homeless.

Mr Tsemberis’ researchshowed this wouldn’t just dramatically cut the number of chronically homeless on the streets. It would also slash spending in the long run. In the audience sat a Utah businessman named Lloyd Pendleton. He had just taken over the Utah Housing Taskforce after a successful run in business. He was intrigued. “He came over to me and he said, ‘I finally just heard something that make sense to me’,” Mr Tsemberis recalled in an interview. “‘Would you be willing to come to Utah and work with us?'”

That conversation spawned what has been perhaps the United States’ most successful – and radical – program to end chronic homelessness.

Now, more than a decade later, chronic homelessness in one of the nation’s most conservative states may soon end. And all of it is thanks to a program that at first seems stripped from the left-wing socialist manual. In 2005, Utah had nearly 1932 chronically homeless. By 2014, that number had dropped 72 per cent to 539. Today, explained Gordon Walker, the director of the state Housing and Community Development Division, the state is “approaching a functional zero”.

For years, the thought of simply giving the homeless homes seemed absurd, constituting the height of government waste. Many chronically homeless, after all, are victims of severe trauma and significant mental health and addiction issues. Many more have spent thousands of nights on the streets and are no longer familiar with living in a home. Who, in their right mind, would willingly give such folk brand-new houses without any proof of marked improvement?

But that’s exactly what Utah did.

First the state identified the homeless that experts would consider chronically homeless. That designation means they have a disabling condition and have been homeless for longer than a year, or four different times in the last three years. Among the many subgroups of the homeless community – such as homeless families or homeless children – the chronically homeless are both the most difficult to reabsorb into society and use the most public resources.

So in 2004, as part of a trial, the state housed 17 people throughout Salt Lake City. Then they checked back a year later. Fourteen were still in their homes. Three were dead. The success rate had topped 80 per cent, which to Mr Walker “sounded pretty good”.

It’s now years later. And these days, Mr Walker says, the state saves $US8000 ($10,271) per homeless person in annual expenses.

And now, the chronic homeless are no longer tallied in numbers. They’re tallied by name. The last few are awaiting their houses.

The Washington Post


Henry Sapiecha

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