When you have a low income, it can be difficult to be approved on a finance application where you don't meet/exceed the minimum income requirement.
Thankfully, there are some ways to work around this when the traditional methods fail to work. Let's look at some options and credit card tips that can help you with financing when you have a limited income.
Low Income Tips: Interest Free Loan
Australia has quite a few resources that can help low income households. This scheme is called the "No Interest Loan Scheme" or NILS. This service is offered by a number of banks and lenders in Australia.
The NILS will give a line of credit to families or individuals who are not making enough money to properly support themselves. Usually, the loan amount will be between $500 and $1,200 and is meant to be used for purchasing whitegoods, furniture, medical goods, home repairs and any other expenses that are necessary for day to day living.
The repayment period is usually between 12 to 18 months and there is no interest added to the principle of the loan. The great thing about this loan is that once it is repaid to the lending organisation, the money will be sent to another family or individual who needs the money.
Credit Card Tips: Secure Cards
A large majority of credit cards in the Australian credit card market are unsecured cards. An unsecured credit card does not have any collateral set against it and, if the card user defaults on their scheduled repayments, there is no form of security that the lender can then claim that can settle the unpaid debt. If a debt does remain unpaid, collections will be brought against the card holder until the outstanding monies are repaid.
Usually, customers who have average to good credit will qualify for an unsecured credit card, but customers who have a lower credit rating will have a hard time getting one. Secured credit cards are great for people with a low income, as the customer can choose to use something valuable as collateral. This is one of the more beneficial credit card tips, as the customer will be able to use their vehicle as collateral and the loan that is given will correspond with the car's value.Back to top
Low Income Tips: Finance Brokers
Finance brokers can be a good way for individuals to have access to the credit that they need. They usually act as the middle-man between the customer and a lending institution. The advantage of using a financial broker is that they have inside knowledge of the industry and can give you helpful recommendations when it comes to your options.
It will ensure that you will not miss any important information or make any mistakes when it comes to looking for loan options. However, financial brokers work on commission so it is important to make sure that the expenses you will incur from working with a broker will fit with your budget.
When it comes to looking for credit sources, you should keep these options and credit card tips in mind. They could be very helpful when it comes time for you to look for more financing or additional credit cards.