While those who are looking at debt consolidation loans are likely to have experienced a degree of financial distress, there are numerous options available. It is important to compare debt consolidation loans to find the one best suited for your situation. Many people feel an understandable urge to repay their debts as quickly as possible but this is not always the most appropriate action.
You should take into account interest rates, traditional fees and also potential charges should you miss payments going forward. For many people, a debt consolidation loan will be the final throw of the dice as they seek to repair their finances. Consequently, it is imperative that you do your research and find the best terms available.
Quick Loans debt consolidation finance
It is important to remember that the interest rate charged on a loan will depend upon your specific financial situation. On the subject of charges and fees, most customers will not experience the vast majority listed below. It will depend upon the type of loan agreed, the use of collateral and payment arrears/default.
We will now take a look at the interest charges and fees associated with Quick Loans debt consolidation finance.
There are two standard types of loan, secured and unsecured. You will find that the interest rate on a secured loan is markedly lower than that of an unsecured loan because there is collateral to sell in the event of default. This means that the lender is likely to recuperate the outstanding balance of the loan hence the risk is lower.
The interest rate on an unsecured loan will always be higher than that of a secured loan. This is simply because an unsecured loan has no security and is wholly dependent on the client’s ability to make the necessary payments.
You also need to be aware of how interest is charge. Here at Quick Loans, interest is calculated on the daily outstanding balance and added on the last day of each month.
As many of our clients are already experiencing financial difficulties, some loan arrangements can be more complex than others. In order to keep fees transparent and proportionate, we charge an establishment fee based upon the loan advance. Then there are additional charges which are not applicable for all debt consolidation loan applications.
There are a range of additional actions which may be required when establishing or amending an existing loan arrangement. These include:-
Loan administration/processing fees
There are also a number of additional loan administration/process fees, some of which are charged monthly while others, as and when the service is required.
Early settlement/prepayment fee
In line with best practice, while we do have a specific section for early settlement/prepayment fees, these are currently set at zero.
As we touched on above, the use of security/collateral will assist in keeping down the interest rate and the costs associated with a debt consolidation loan. In order to ensure that everything is done by the book, we use the Personal Property Securities Register (PPSR) to note any charge over client assets.
There are certain fees associated with the PPSR which are part of our debt consolidation loan terms and conditions. If you decide to go down the secured debt consolidation loan route, you may encounter all or some of the following fees:-
During the maintenance of loan agreements, we may need to take an array of specific actions relating to accounts in arrears or default.
Unfortunately, some clients struggle to repay secured loans and while we do everything possible to avoid repossession, sometimes we need to undertake the repossession of assets. There are various costs associated with repossession, covered below:-
As you will see from the summary below, when it comes to collection costs we simply pass on the invoice from the third parties acting on our behalf.
As a responsible lender, we take our legal and moral obligations extremely seriously. Consequently, we are transparent and upfront with all potential fees that you may encounter with a debt consolidation loan. These are standard practice in the commercial loan industry but it is crucial that clients and potential clients are aware from the beginning of our relationship.
When it comes to the options available to those who have suffered financial distress, it is important that you act sooner rather than later. It may be that you have just experienced a degree of financial distress or you see potential problems on the horizon. We speak with many clients who “bury their head in the sand” in the hope their finances will improve without taking additional action. Unfortunately, this strategy tends to make a difficult situation even worse and can reduce the options available.
Compare debt consolidation loans against other types of finance
When focusing on debt consolidation loans, whether or not you have yet to experience financial difficulties, your research can be all-consuming. In order to give you an idea of the cost of other types of finance, we have put together a table which you will find useful. This table compares and contrasts the different types of finance available and indicative interest rates.
It is important to remember that charges should also be taken into account and the treatment of parties with your specific credit history. Some lenders indicate a relatively low starting point but the actual interest rate may be much higher for your financial situation.
Quick Loans is positioned between the traditional New Zealand banks and the high interest rate payday lenders. This is a market which we believe has been underserviced and often overlooked in the past. Clients tend to have experienced a varying degree of financial issues in the short-term and are looking to rebuild their finances and credit score.
The debt consolidation loan market in New Zealand is extremely competitive. Consequently, it is important to compare debt consolidation loans to secure the best terms and conditions for your situation. Here at Quick Loans we prefer to interact with clients at the earliest opportunity, giving us the chance to understand their situation and discuss what we have to offer.
As a responsible lender, we are legally and morally obliged to give “best advice”. Consequently, where we are not able to assist financially we may be able to offer alternative advice and guidance.