Watching the news, you could be forgiven for thinking the global economy is in turmoil. Interest rates, inflation, and the cost of living have become synonymous with our times and current situation, not to mention the aftershock of the sudden disruption caused by the Covid-19 pandemic.
How Household Budgets Are Affected
How does this affect a household budget? Home loans, car loans, and credit cards are tools that people use to drive their lifestyles, but it’s becoming harder and harder for individuals to get access to capital at a reasonable rate.
Rising Costs and Decreasing Purchasing Power
It seems the essentials are costing more, and purchasing power is decreasing. Some in the financial services industry believe we’re in a ‘credit crisis,’ and it’s becoming harder for individuals, couples, and families to:
- Get into their own home
- Afford a family holiday
- Purchase a second car
The average credit card debt for Australians is just over $3,000, and a third of us are living pay to pay. The average mortgage holder has seen their repayments jump considerably during the past eighteen months.
Challenges in Obtaining Credit
The ability for individuals, couples, and families to obtain credit is based on a few things, but primarily, they must have:
- A regular income
- The capacity to make repayments
- A good savings history
You may be asking yourself, ‘why can’t I get approved for a loan?’ With higher interest rates, it’s becoming harder and harder for approvals, and it also affects the amount you can borrow. Australia is in a recession on a ‘per-capita’ basis, meaning our economy may be ticking along and on the up, but so is our population, which can cause strains. More people are competing for the same resources.
The Solution: Debt Consolidation
With these current pressures, people are struggling to get ahead financially. Debt consolidation can be a helpful strategy in these times, allowing individuals to manage their home loans, car loans, and credit cards more effectively.
Want to make debt consolidation EZPZ? Enquiry with us today – takes less than 60 seconds
Benefits of Debt Consolidation:
- Simplify Finances: Consolidate multiple debts into a single, manageable payment.
- Organise Your Financial Situation: Get all your debts in check and streamline payments.
- Potentially Reduce Interest Rates: Update your payment terms to secure better rates.
Looking Ahead: Economic Predictions
Some economists are predicting interest rate cuts in November, which will greatly assist in the ability to get finance, but there is a little way to go yet before we work through the current economic environment.
