Finance

Who pays a mortgage broker?

July 14, 2013 by Reporter Leave a Comment

Consumers as well as people who aspire to become a mortgage broker are not sure about who really pays these professionals. While consumers might suspect a mortgage broker to be recommending solutions that earn him more profits, aspiring “mortgage brokers” have little or no idea of how well or how much they can earn in this profession. This article sheds light on this subject!

Much like there are no free lunches, there are no free advices either, much less a financial one. Mortgage brokers are experienced professionals who’re paid for their knowledge and expertise.

There is no way one would spend their time and energy if it were not for the compensation they earn for it. To become a mortgage broker, you have to understand the intricacies of the business. It is downright smart to understand how you would get paid before you venture into becoming one.

Mortgage Brokers earn a commission

It is needless to say brokers are compensated in monetary terms. Mostly, they earn a single-shot commission from the lender. The percentage can be anywhere between 0.5% to about 1.2% depending upon a number of factors like the duration of the mortgage or the lender‘s offering. Say, for instance, a broker is selling a mortgage for 10 years. In this case they would bring home a higher remuneration as compared to a 5 year mortgage for the simple reason that the lender is benefitted from it. In addition, the broker would also be selling one mortgage in a period of 10 years instead of two 5-year mortgages.

The commission earned is the trailer fee in financial terms. It is the lure for the broker to sell the mortgage. The lenders have been paying trailer fees to financial advisors for ages but it has just come into the scene for mortgage brokers. This is actually very important to understand if you want to learn how to become a successful mortgage broker. At the time the mortgage is signed, brokers earn a low percentage but they continue to get an additional percentage every year till the tenure of the deal. This translates into a twin benefit: one it gives them financial sustenance and two it gives them a constant revenue stream over a defined period.

What you, as the broker, have to take note of is this trailer fee. It is what hitches you to sell you the mortgage. Whilst working with a prospective client, you may be able to present a wider variety of offerings as compared to a financial institution as they can only sell certain products their organization has affiliated itself with. This is where the trailer fee kicks in. Combined with a host of other benefits like bonuses dependant on volume of business brokers procure for the lender, trailers can largely influence you in terms of the products being offered as some are more lucrative as compared to others. Bonuses for certain products can mean travel, perks or gifts for you.

Therefore, before you take the road to become a mortgage broker, study the market well as to which products are going to give you the maximum benefits as these will be the ultimate deciding factors in you becoming a successful mortgage broker. Explore the market options and choose the ones that offer you the most perks and bonuses as these are the monetary, or otherwise, gains you are going to derive out of selling a mortgage to a client.

Article by Red Rock Brokers who is an independent mortgage finance company specializing in property finance solutions for investors & borrowers with specialized lending needs.

Who Pays for Online Credit Card Fraud?

May 2, 2013 by Reporter Leave a Comment

In this age of new technology, we have begun to live our lives between the online world and the real world. There are now so many ways that we can communicate with our customers, through social media, our websites and ultimately through the transactions that we make. It has never been easier to make the connections we need to keep our businesses above water; but this does come with new ways that criminals can gain access to our companies and customers details and sometimes this can leave all parties involved out of pocket. The main and most common ways that this happens is through credit cards, mainly due to the amount of sites that now accept our credit card details. Here we will look at how and who this fraud relates to and ultimately, who carries the cost.

The Credit Card Company

The majority of credit card fraud issues includes fraud, theft and expired cards. In the case of online fraud, currently the easiest way to commit this form of crime, many credit card processors have a zero liability policy that will return the card holders cash to them. Many times the card provider will not allow the transaction to be processed, and the person making the transaction will become aware of this. This allows the bank to investigate the transaction and determine the best course of action.

If a transaction is processed then this will usually leave the credit card company paying the money back to the cardholder and will be covered by their insurance; the turnaround time for reimbursement is, on average, 48 hours.

The Merchants Responsibility

There are times when credit card fraud can be attributed to the merchant, mainly for letting the crime happen on their site. This usually occurs due to a lack of onsite security during the payment process.

One scenario when a merchant is most likely to be charged to foot the bill, is when it can be a proven mistake on their part. A prime example of this was a recent merchant fraud case involving Apple in the UK, was a case of a child using his parent’s credit card to pay for online games. Apple had not integrated this liability into their planning and as the parent’s card details were stored, there were no restrictions to stop the child from using it. Apple had to reimburse the full cost as it was indeed a fault of theirs.

There are ways that, as a merchant, you can make sure that you are protected; the most obvious is to make sure that you have adequate SSL security on your site. This should be displayed throughout a variety of you pages and be obvious at the transaction point. This will, at least protect you if a customer’s details are stolen from your site.

The Customer

The bulk of online fraud transactions are now covered by the banks and credit card companies, but there may be times when the customer is just as liable as the merchant. The majority of credit card fraud cases will need to be proven by the customer and merchant in order for the creditors to make the reimbursement. If you have found fraudulent activity on your account, or one of your customers has experienced this, then it is imperative that you find out what the credit card company classes as an ‘authorized’ transaction as they can differ between companies. In essence, if you have presented your card for payment, then you could be liable for the charges that apply directly to this activity.

The issues with customer liability within this arena is that there are now so many ways that you can pay for things using your card, Paypal, online, offline and many people store their bank statements on their computer. If you then allow someone to use your computer and they take your details, then you are liable – it really is as easy as that.

In conclusion, we are all liable at some point to pay for the crime of credit card fraud, so we need to work together to make sure that we are all as secure as we can be.

Australian stock market and new IPO & Floats

April 22, 2013 by Reporter Leave a Comment

Companies that have listed on ASX in the previous two months. Click the Company asx code in 2nd column in table below to check out the current price on Australian markets

Initial public offering (IPO)
From Wikipedia, the free encyclopedia

An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises.

IPO and recent floats on the australian stock market

Company name	ASX code	Listing date	1st day’s trading
Company name	ASX code	Listing date	Open	Close
CHINA INTEGRATED MEDIA CORPORATION LIMITED	CIK	25/02/2013	0	0
LION SELECTION GROUP LIMITED.	LSX	13/03/2013	0.65	0.69
MALABAR COAL LIMITED	MBC	28/03/2013	1.04	0.84
NAOS EMERGING OPPORTUNITIES COMPANY LIMITED	NCC	26/02/2013	0.98	1
NATIONAL RMBS TRUST 2012-2 SERIES 2012-2	NAH	15/03/2013	N/A	N/A
PERPETUAL RESOURCES LIMITED	PEC	28/02/2013	0	0
SERIES 2012-1E REDS TRUST	RFB	14/03/2013	N/A	N/A
SERIES 2013-1 WST TRUST	WSQ	03/04/2013	N/A	N/A
SPDR S&P WORLD EX AUSTRALIA FUND	WXO	19/03/2013	N/A	N/A
STRATA-X ENERGY LIMITED	SXA	12/03/2013	0.33	0.35
SWALA ENERGY LIMITED	SWE	18/04/2013	0.2	0.19
TALON PETROLEUM LIMITED	TPD	28/02/2013	0.1	0.105
TLOU ENERGY LIMITED	TOU	09/04/2013	0.5	0.53
TORRENS SERIES 2013-1 TRUST	TNB	14/03/2013	N/A	N/A
US SELECT PRIVATE OPPORTUNITIES FUND II	USG	09/04/2013	1.6	1.6

Reasons for listing as an ipo

When a company lists its securities on a public exchange, the money paid by the investing public for the newly issued shares goes directly to the company (primary offering) as well as to any early private investors who opt to sell all or a portion of their holdings (secondary offering) as part of the larger IPO. An IPO, therefore, allows a company to tap into a wide pool of potential investors to provide itself with capital for future growth, repayment of debt, or working capital

Upcoming new floats on the australian market

The entities listed below have made application for admission to the official list of ASX Australian shares. Part of this application process includes the allocation of a provisional ASX code.

It is advisable to obtain investment advice before making any investment decisions relying on information provided on a third party site, and the entity’s offer document should be read in its entirety before any decision to invest in the entity’s securities is made.

Company	Proposed ASX code *	Proposed listing date/time
Austral Resources Limited	AZW	24 April 2013 #
Classic Minerals Ltd	CLZ	TBA
Coke Resources Limited	CKE	TBA
IPB Petroleum Limited	IPB	30 April 2013
Kin Mining NL	KIN	TBA
Laramide Resources Ltd	LAM	TBA
Longreach Resources Limited	LOR	22 April 2013 #
Macquarie Gold Limited	MQX	24 April 2013 ##
Mighty River Power Limited	MYT	10 May 2013 #
Perth Resources Limited	PRD	TBA
Priority One Network Group Limited	POR	Application Withdrawn
Rental Management Investment Trust	RTI	TBA
Shine Corporate Ltd	SHJ	15 May 2013 #
Sino Australia Oil & Gas Limited	SAO	28 June 2013 #
Tropicana Gold Limited	TPO	TBA

*Listing dates are anticipated dates for first quotation of securities set by ASX following completion of admission procedures and proposed dates for first quotation of securities set out in the entity’s prospectus or information memorandum. However, they are subject to change without notice and you may not rely on this information in any way

Public offering
From Wikipedia, the free encyclopedia

A public offering is the offering of securities of a company or a similar corporation to the public. Generally, the securities are to be listed on a stock exchange. In most jurisdictions, a public offering requires the issuing company to publish a prospectus detailing the terms and rights attached to the offered security, as well as information on the company itself and its finances. Many other regulatory requirements surround any public offering and they vary according to jurisdiction.

Public offering without listing
From Wikipedia, the free encyclopedia
A public offering without listing, often called a POWL deal or a POWL, is a form of public equity offering by non-Japanese firms in the Japanese market, without the previously required simultaneous listing on a local exchange. Equity offerings via POWL have been a common part of Asia regional public offerings since the early 1990s, with Japanese investors often taking more than 20% of the offering through this format

if you need more stock tips on the australian stock market you can visit australianstockwatch.com or www.australianpennystocks.com for penny stocks tips and hot shares

Stock market Picks : Toxfree

March 9, 2013 by Reporter Leave a Comment

A 33 % jump in net profit definitely signifies a positive outlook for a company and tox free ( waste management and industrial solutions ) should be happy in the direction they are going.

Toxfree Solutions Ltd (Toxfree) is a integrated waste management and industrial service provider, who provides sustainable waste management solutions for all types of waste including commercial, household, industrial, construction and hazardous waste..

“Tox free” has reported a jump in profit of $10.5 million for the first half of the financial year and its shareholders are pleased with the results.

Website:www.toxfree.com.au

Toxfree share price: $3.450
(Updates every 20 minutes)
Click here for full details

Tox free is a WA owned company and it revenue has risen to 43 percent to 131.6 million with earnings before interest, tax ,depreciation and amortisation up 39 % to 28 million

They have over 30 facilities nationally and employing a team of over 800 people and service over 20,000 customers nationally

Tox free has also been lucky with expansion into the coal seam gas industry in Queensland as a result of its acquisition of Absolute Liquid Waste services earlier which is based in towoomba, which has also added to its rapid growth.

The company has performed very well this year and is in great shape to extend its winning run of earnings growth into the current financial year.

Links

31 December 2012
Toxfree Half Year Results – period ending 31 December 2012

12 December 2012
ASX Announcement Acquisition Absolute Waste – 10-12-2012

http://www.asx.com.au/smalltomidcaps/asx.pdf

More midcap stocks and penny stock picks can be found at australianpennystocks.com

Liability disclaimer : Advice received via the Australian business times web Site should not be relied upon for personal, medical, legal or financial decisions and you should consult an appropriate professional for specific advice tailored to your situation.

Pros and Cons of Getting Life Insurance from Your Employer

March 7, 2013 by Reporter Leave a Comment

Benefits offered by your employer are always a plus; it helps show that your employer cares about you and wants to help reward your time and effort dedicated to the company, and with the economy fluctuating all the time, it probably seems unreasonable to turn down any offers. Life insurance coverage offered from your employer may be tempting to accept without any hesitation, but before you sign on too quickly, it’s important to consider both the advantages and disadvantages of employer sponsored life insurance plans.

The Perks

Life insurance offers financial peace of mind to you and your family, and it allows your employer to be better able to continue the company if something were to happen to you. There are many advantages for having your employer sponsor your life insurance policy. Not only is it paid for (or at least greatly reduced), but most life insurance policies provided by employers require no medical evaluation of your personal insurability. Factors such as smoking, weight, current health conditions, and health history that would usually make your premiums skyrocket, or even cause you to be deemed uninsurable, aren’t considered when a group life insurance policy is taken out. It’s a one-for-all kind of a deal, and it’s a great incentive for those who wouldn’t qualify for or otherwise couldn’t afford their own individual policy.

If the life insurance is offered at a discounted rate, it’s much more convenient to pay off. Most employers will deduct the amount out of your pay check, or more recently, right out of your super fund. That way, you don’t have to worry about keeping up with payments as the administrative duties are already handled for you.

The Kinks

As with most things in life, there are both negative and positive sides to accepting employer-sponsored life insurance. As nice as it is saving money on life insurance by going through the company’s policy, there are a few things to consider; it’s important to really sit back and think about you and your family’s needs. Many group life insurance policies don’t offer adequate coverage for employees with dependents, and if the purpose of having a life insurance plan is to be able to allow your family to pay off your debts as well as be financially provided for in case something were to happen to you, group life insurance probably won’t cut it.

One other thing to think about is that your company insurance plan covers you for the time you’re employed there; it does not protect you if you should decide to find employment elsewhere, if the company goes under, or if you’re laid off or fired. Having to start a policy over again can be more costly, and if you decide on term insurance, your cycle will start all over again. Some insurance companies offer a continuation plan in the event you lose your employer sponsored coverage, but those generally come with significantly higher premiums. If you’re working at a company with a strong reputation, and if you plan on sticking with it for a while, this might not be of too much concern. On the other hand, if you don’t like the feeling of being tied down, then getting an individual plan would probably be the best option.

A group life insurance policy is owned by the employer, and therefore, he/she is the only one who can make any changes or additions to the plan. Often times, employers do this without consulting their employees, so if there are certain things that you strongly want or need to stay consistent with your plan, it’s best to own your own policy and have full control over it.

Evaluate Your Needs

After weighing the pros and cons associated with what insurance plan your employer is offering, it’s time to make the decision. Many experts recommend using any free or discounted life insurance policy being offered as a supplement to your own plan, but not as the sole provider. You can never have too much coverage, but you can certainly have too little. It’ s best to work out your individual needs , compare it with what is being offered by the company, and make sure to cover the rest yourself. An individual policy is usually the best choice because it allows for mobility, adequate coverage, and freedom of changing or modifying the policy. After all, it’s best to be the one in control when it comes to matters regarding the future safety of you and your family. Mark Haberfield writes for AAMI life insurance when he’s not spearfishing off the NSW coast.

Low doc loans solutions for self employed business people

March 5, 2013 by Reporter Leave a Comment

Are you a self-employed professional? Do you find availing loans for your business or personal needs difficult? Did you face unending hassles the last time you applied for loan from the bank?

Self employed low doc loans

If the answers for all the questions are in positive then it means you are facing some serious hardships in availing loans, which be quiet disappointing for the future plans you’ve made.

However, the long wait is finally over.

No longer would you be facing trouble standing in the long queue and waiting your turn only to find that the application for loan approval has been rejected.

The answer is in the form of a path-breaking financial products—– “low doc loans” or “low documentation loans.”

How do they help?

Low doc loans are specially designed for the people who are self employed and who face difficulty in furnishing up to date documents related to the income source and various other financial details. There are situations where the produced documents don’t actually reflect the source of consistent income. Hence the application for loan, receives rejection wherever applied.

Regular loans lenders find it very unsafe to offer loans to people categorized under self-income groups due to the instability of their business in comparison to regular income holders.Therefore, lending funds to such individuals is termed as a huge risk and banks generally refrain from lending it to them.

These loans could very easily add on to the list of Non Performing Assets (NPA’s) for these banks.

Other advantages of low doc loans:

· The number of financial documents required to avail the low doc loan is fewer than otherwise. It solves the major problem for the loan aspirants categorized under self-employed groups.

· Low doc home loans in Australia is available up to 90% of the market value of the property. This means that the applicant receives higher amount of the funds than from regular sources.

· The options under this category are innumerable and the aspirant can easily decide on the best possible choice as per the needs.

· Low doc loans offer redraw repayment facility. This is one of the main features of the loans that impart unique credibility and attractiveness to them. This feature is present in much selected regular loan schemes.

· In addition, the applicant receives the option of flexible repayment and unlimited extra repayment without any early exit. This adds a unique cover of security to low doc loans. In short, they have all the necessary features that make them more preferred.

Therefore, even in conclusion, we can state that low doc loans or low documentation loans are the best option for self employed people. However, they should make it a point to enquire about the stamp fee and miscellaneous expenses along with the total repayment amount before applying for these loans.

These loans are easily available at all the banking institutions where they can be easily accessed. It is always better to evaluate your borrowing potential before thinking of applying for low doc loans. Red Rock Mortgage Group is an independent mortgage finance company specializing in property finance solutions.

Best home loans in case of bad credit history

January 7, 2013 by Reporter Leave a Comment

There is a substantial population in the world with bad credit scores. These people often find themselves totally sidelined from the others when it comes to raise money from banking institutions. The reason behind this neglect is the risk involved in handing out loans to people who may not possibly be able to pay the complete amount on time. However, bad credit home loans offered by some lenders have given hopes to all such people. Recently many players have arrived in the market to make most of the emerging sector of bad credit mortgages. The low doc or low documentation loans provide unique opportunity to bad credit borrowers.

Red rock is one such financial institution which is one of the leaders in the “bad credit market”. In the present times two types of loans are suggested by the top broking houses to the clients withbad credit history.

Low doc loans:

These loans are specially designed for the people that can not avail to the facility of regular loans from the banks because of their impaired credit history. These loans have given a golden opportunity to such people. It provides a unique opportunity to them in obtaining funds for future investment. Their broader types include:

1) Self declared

2) Account statement

3) Asset lend

In the case of low doc home loans the applicant is not required to provide of much of the paper work otherwise needed in the case of regular loans. The system works on a method called self-verification where the candidate has to declare his active source of income. The lenders decide, thereafter, if the application of the candidate is worth consideration or not. Low doc loans are one of the most innovative and sought out loans in the present market and provide lots of relief to the clients with bad credit history. They have completely revolutionized the financial market catering to a new set of client base.

SMSF loans

Self Managed Super Fund (SMSF) loans protect you against the economic depression and helps in the wealth creation. Very few options are present in the market that can provide you the unique opportunity of safe investment and wealth creation at one and the same time.

The SMSF home loans provide investors flexibility and tax relief, to an extent. SMSF loans are an exclusive lending facility that enables a borrower to use his pre-existing SMSF to borrow and invest in commercial properties including shops, showrooms, warehouses and other approved residential properties.

The only mandatory condition is to have a pre-established and compliant SMSF. The applicant is at a considerable advantage as his SMSF can acquire property worth more than the value of available funds in the personal account. Your SMSF assets are secure even in the case of loan default.

The process of Self Managed Super Fund loansis highly advantageous as tax liabilities can be condensed to a reasonable extent. The interest expenses can be claimed as tax deductions by the SMSF. This feature is not found in many other bad credit fund options. Therefore one should consider availing these opportunities as soon as possible.

Author Box: Red Rock Mortgage is an independent mortgage finance company specializing in property finance solutions for investors & borrowers with specialized lending needs

Tips : Budgeting and controlling your Expenses

December 2, 2012 by Reporter Leave a Comment

Simple ways to control expenses – This is a Guest Post Written by Raj finance blogger and writer and blogs at http://www.bestinsurancenow.info/

Here are given a few suggestions if you just want to keep track on your expenses and just do not know that exactly how to do it. Well it can easily be done by you in very simple ways. The important steps for this are given below. It is highly recommended to use your own systems in order to get in order to be able to reduce the expenses of you without making any budget. The very important steps to control your expenses are given below.

Keeping an expenses diary

Keeping a diary in which you write the expenses incurred is probably the best way with which you can get an insight in your family financials. It is also supposed to help you keeping an eye on the expenses you are making. Most of the people who do so are amazed from the results they get from this simple work. Some of them are not amazed from the daily high expenses like insurance, gas and rent instead from comparatively smaller expenses like shopping dining out and entertainment. On observing this list you could be able to know that on cutting the unnecessary expenses you could easily be able to save a lot and hence could be able to control your expenses.

Tracking and controlling

Today there are many a number of expenses tracking tool available in the market, still most of the people find it as out of their control thing. In some cases the electronic payment options can also help you in this regard. You can easily view all the record of transaction made on any date. It will also consist of the expenses you made in a month. In spite of these tracking tools availability there are many a number of people who are unable to do this. They lack the confidence and regularity in this work.

This is why it is really very important for you to controlling the tracked records.There are many credit card holders who have debt on their card. If proper tracking and controlling measures are taken then the debt in your debt can be avoided and at the same time the expenses of yours are also managed completely.

Making your fabulous plans and habits more expense conscious

The main goal for the complete plan is not to avoid the necessary expenses while it may be this for most of them. For this all you need to do is to make your plans and your habits more money conscious. By making your wonderful / fine habits to more compact you can easily control the budget and expenses of your family. The reason for this fact can be understood from the fact that some of the people might expense more than required in such unnecessary expenses.Now if the expenses are more money conscious then it is sure that you could be able to save a lot of cost of yours.

Facing, sticking and prioritizing the expenses

Facing the expenses are simply means that you are needed to take a piece of paper and then write down all the required expenses on it. It might be scary for most of us. However you are not needed to afraid of the list of all necessary expenses instead you have to face it. You will need to expense your hard earned money on the required expenses. After listing all the expenses you are needed to be agreeing from the fact that you will have to expend the amount on it. What best you can do is to prioritize and minimize the less priority ones.

The 10 Most Dumbest Things to Do If You’re Deep in Debt

November 8, 2012 by Gposter Leave a Comment

It is quite easy to get into debt. However, what matters the most is getting out of debt as soon as you can. However, many people are not aware of how to avoid mistakes that could lead them to more debt. If you are deep in debt, it is essential for you to take things seriously. Failure to do so can result in additional debt problems.

Solutions for Debt Reduction

If you want to get debt-free, always remember to avoid the following dumbest things in terms of debt problems:

1. Spending a Lot

It is surprising to know about those people who are deep in credit card debt but still do not care about spending more on things they actually do not need. If you are one of them, it means that you should stop your shopping addiction so that you can get rid of the debt burden.

2. Using Your Home Loan to Get Rid Of Other Debts

Poor money managers think that there home equity loan can be best served for the purpose of paying off other debts. However, they have no idea how this can put them in bigger debt. Using home loans to pay other debts simply means that you will have to pay more in the future.

3. Borrowing Money from Relatives

People in desperate need of cash often borrow money from family members and other relatives because they think that this is the only solution left. However, this is the worst thing you can consider while paying off your debt as paying this loan on time is an obligation for you.

4. Ignoring How Debt Is Giving You Warning Signs

Some people living in debt manage to make ends meet if they are paying their minimum payments on time. However, this can still be risky because you never know when you are required to pay a lot. Secondly, many people ignore the warning signs of living in debt.

5. Relying On Credit Counselors That Want More Money

When you search for credit counselors, you will find many. However, some will demand high fees and promise to help you get debt free. They will hardly meet your expectations. Therefore, relaying entirely on credit counselors should not be done.

6. Not Making a Budget

It is a common phenomenon that most people spend money without making a budget. This should especially be done if you are in debt. Those who do not follow an organized form of managing money end up getting more debt problems. Therefore, you should always make a budget.

7. Considering Loans with High-Interest Rate to Pay Off Previous Debt

If you have debt and you want to pay it off, getting into more debt is not the right solution. This is because you will have to pay a higher interest rate for the loan youjust took so that you can pay off your previous debt.

8. Declaring Bankruptcy

Declaring bankruptcy can affect your financial stability in the Short term. This Solution should not be taken specially if you intend to start a business soon again or just as a solution to get debt-free. It is always recommended to consider bankruptcy as a last option. If debt settlement works for you, then prefer it over declaring bankruptcy.

9. Using Your 401k

If you have already taken a lot of debt, and you plan to use your 401k for further expenses, then it is quite an ineffective decision. You never know when you really need for 401k. So, it is always better to save this amount of money for your retirement.

10. Buying a Car on Lease

If you are already stuck with your home equity loans and you want to buy a car, leasing is the worst option you can ever think of. When you calculate your overall payments, you will realize that you have spent a lot of money on its payments as compared to its actual value.

If you think that you the above mentioned warning signs are interfering in your life, then this indicates that you should avoid them as much as you can. Rather than using these ineffective ways to manage your money, it is better to look for debt consolidation solutions.

Author’s Bio

Angelina is a financial expert in debt management solutions. She likes to help her readers get rid of debt and for that she recommends Consolidated Credit’s debt settlement companies page which is worth reading www.consolidatedcredit.org/personal-finances/life-events/debt-settlement/.

Why your business should offer layby (if it doesn’t already)

October 6, 2012 by Reporter Leave a Comment

For some it might still have a ‘mumsy’ or ‘poor person’ stigma attached, but the layby is becoming more and more accepted as a way for credit-shy (or already in debt) consumers to pay for the things they want and need without going into the red, or sacrificing too much else. In fact it’s part of a lot of sensible financial advice tombs too. It still isn’t openly encouraged at major department stores, but both Myer and David Jones do offer it as a payment option.

Case Study – David Jones

David Jones was heavily criticised in online forums after it raised its layby fee to $10 in 2003, but that just proves that there were customers who relied on it as a way to pay for things they might not otherwise be able to afford. It’s also worth asking why neither store has stopped offering layby as a payment option.

Within the world of small business, boutiques and online retail it seems layby is also coming back into fashion, and big businesses are noticing. The Big Day Out music festival copied another popular festival, Future Music, and offered layby as an option for concert goers on a budget for the first time this year. The organisers told the media that it was introduced due to ‘overwhelming consumer demand’ too.

Small Business and Layby’s

It’s not surprising that in these economic times, when consumers are looking for ways to control their spending, and credit card use, layby has come back onto their radar. It holds few nasty surprises from the customer perspective as administration fees are usually low, the only risk is losing the deposit already paid and repayments are interest free (by law). The fact is layby can make good business sense too.

An online gift retailer, Cool Things, recently became one of the first online stores to offer its customers layby online. The online version comes with enhanced customer service too, and owner Peter Harback has taken it to the next level by ensuring that every layby customer gets a follow up phone call to negotiate the payment plan and confirm all the terms and conditions the customer is signing up to. Small business owners and operators would do well to take note, and consider offering layby, including layby online. According to Harback most customers who use layby pay it off automatically using their credit card, and the admistration costs are minimal.

The Australian Retailers Association (ARA) also reports that defaults on layby across the country are minimal, and the ARA website has a very useful software package for businesses wanting to offer layby to customers. It allows them to keep track of repayments and customer details and manage the financial impact of offering layby.

In fact, Harback says that layby customers fill their online shopping carts with goods worth as much as 100% more than usual credit card customers. That means the process works for the business as well as the customer and transactions are worth more – at least that has certainly been the case here.

If you are thinking of offering layby – or advertising it if you do already offer layby, you will want to make sure that you’ve included these terms and conditions on the receipt you give to customers:

· The 20% (or similar) deposit amount

· A statement that full payment is due within X number of months (usually within 3)

· A costing charge for layby not completed

· Any cancellation fee that would apply if you decide not to go ahead

· A statement that the deposit won’t be returned if the layby is cancelled

· Progress payments, preferably with dates. Payments will usually be required weekly or fortnightly

This article was supplied by www.creditcardoffers.com.au

Finance

Who pays a mortgage broker?

Mortgage Brokers earn a commission

Who Pays for Online Credit Card Fraud?