Piggy Bank wearing mask, gloved hands surrounding, Ask Alan
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  • Consolidate your finances. We often keep lots of accounts, with small amounts of money in them – if you have repayments for loans, and are concerned that you may be short of funds, round up those small accounts and put them all into the account that repayments are debited from.
  • Redraw on surplus payments – if you have redraw in your loans, withdraw these funds and put them back into your repayment account to create a buffer that can be drawn on again, to keep your repayments up to date.
  • This is the time credit cards are useful! Use your cards for small purchases, bills etc to ensure you keep as much ‘cash’ available as possible for your larger loan repayments. Yes, you’ll have interest charges on the credit card, but it may just get you through a tough spot and you can just pay the minimum on the credit card account until things improve.
  • Look at any unnecessary spends – (Foxtel, Netflix and Stan just became more necessary than ever) is there a gym membership you’re not using, can you suspend a club membership for 3 months? Is there a subscription you can cancel or suspend?
  • With the reductions to interest rates that have come through, call your lender and make sure your repayments are the minimum they need to be – many lenders don’t automatically reduce your repayments when rates fall.
  • Refinancing may not be possible, if you are on unpaid leave or have lost your job, but you can ask for the lowest rate possible with your lender. Don’t hesitate to talk to me, I can give you this information.
  • If you are paying your loan weekly or fortnightly, ask your lender to revert you to monthly payments – it can actually be the cheapest form of repayment if your lender divides the monthly repayment by 2, to get a fortnightly repayment. We’re just trying to survive the next period, not get ahead….
  • If you are salary sacrificing to super, and are in danger of having lower salary over the next few months (especially if you rely on sales commissions or bonuses), cancel the salary sacrifice until everything returns to normal.
  • Don’t go internet shopping – I’m sure you won’t, but I tend to find that because it’s not ‘real’ and you can’t see it immediately, it’s easy for it to run away from you – until you see your credit card statement!!
  • When all else fails, call me and I’ll let you know what your lender has in place to help you if you’ve lost your job or income due to the impact of Covid-19.

As always, if you’d like to know more or would like advice tailored to your own personal circumstance – just Ask Alan, your online personal mortgage broker.