Traveling Clues: how to travel when you’re 19, work part time & a student

traveling

Written for Credi Pty Ltd by Emily Judd

Travel (noun): To go from one place to another, as on a trip; journey.

It’s a dream we all have, whether it’s swimming with dolphins in the Bahamas or fine dining in Paris on a beautiful summer’s night. The need for travel brings us all together, it’s something we expect to experience at some point in our life- but sadly, not so much anymore. From a young age, my parents told me their exhilarating stories of traveling with friends in their teenage years. It became an expectation of mine that I would make the same memories. So I did what any young kid would do, I made a lemonade stand to make an income, which turned into a babysitting gig and now, a part-time sales assistant role. Travel is my dream, and I have never stopped working or saving to reach it.

However, I’m going to be completely honest, growing up in the 21st century is hard. No matter how much I worked there was always expenses in my way, whether that be textbooks for university, fuel or phone bills, it just didn’t seem to stop. My dream of traveling the world and experiencing exotic cultures slowly became more and more unrealistic. The tales my parents once told me seemed like a far cry and it was an unwelcomed reality check.

Not surprisingly, before long I found myself booking an appointment at my local bank to apply for a travel loan. When the day finally came, I walked into the bank with my parents, extremely excited at the prospect that my dream of travel may actually come true. But once again, there was another halt in my plans. I’m not sure if you’ve ever applied for a loan at my age, but I’ll tell you now, it’s a no go. Firstly, I’m a university student, secondly, I only work part-time and thirdly, I’m only nineteen. Three strikes and I was out. I ended up walking out of the bank in tears, not knowing what else I could possibly do to fulfill my dream of travel.

A few weeks later, my parents called me into the dining room to have a ‘chat’ a.k.a every teenager’s worst nightmare. I frantically started questioning everything I had done earlier in the week. Had I left the milk out? Had I not made my bed? Or did I suddenly turn into an underworld queen? Spoiler alert, I hadn’t. Instead, my parents put a piece of paper in front of me titled “The Bank of Mum and Dad”. It was a term that I had never heard before, however, everything changed that day.

My parents explained to me that through the assistance of lending platform Credi, they would be more than happy to loan me the money for my travels. Instead of fighting a losing battle with the banks and accepting to pay a crazy high-interest rate, my wonderful, amazing and beautiful parents would loan me the money- without interest! Credi allowed us to create a custom loan agreement and manage the whole process. For the first time since the tender age of six, exploring the world and all it had to offer seemed possible.

This saga occurred six months ago, and so much has changed since then. I am now sitting here writing this blog in Nice, France, whilst sipping on champagne. With the help of my parents and Credi, all my dreams came true and I have been able to travel the world. I can now return to Australia and tell all my friends and family about the wild adventures I got up to. AND I bet you can guess where I’ll be off to next- that’s right, the Bahamas to swim with dolphins!

 

Written for Credi Pty Ltd by Emily Judd

 

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.

#BOMAD

bomad

Written for Credi Pty Ltd by Nicholas Perman

Being a part of generation Y has its challenges. One of the many challenges currently facing 20 something’s is buying a house. For students like myself, there are really only two options available. Live with your parents or start renting.

Today’s property market is both challenging and rewarding for those who are able to enter the market. For people like myself, a 22-year-old university student, the possibility of self-funding a deposit for a home is virtually impossible. So the question stands, how do I fund my future? It seems a daunting task, with lending from the bank seeming like a never-ending trap of interest rates.

Luckily, I’ve found a solution. The #BankOfMumAndDad or BOMAD. Although this may seem like a cop-out to some, I’ve found this is my only way to get my foot in the door and set myself up for the future. With many speculating that real estate prices will drop in the next year, I have devised a plan to help secure my future in the real estate market.

Using #Credi, my parents and I are going to organise a payment plan, where I will pay them back over a due period. By using Credi I can formalise and manage this agreement with my parents or BOMAD. I will also be able to take advantage of the low property prices expected in the next year, without falling into a heap of debt with a bank.

Once I finish Uni at the end of 2017, I am hoping to gain full-time employment, which will help me gain the finances needed to pay my parents back for the initial loan over time. In a time where my generation is struggling to get out of the rent trap, #Credi is a life raft, allowing those who are fortunate enough to get a loan from the bank of Mum and Dad to get their foot in the door of Perth’s profitable property market.

In a time where my generation is struggling to get out of the rent trap, #Credi is a life raft, allowing those who are fortunate enough to get a loan from BOMAD to get their foot in the door and access the property market.

Credi’s ability to let you pay back the loan over anytime, of any amount and including any conditions is attractive. They’re also in the process of creating a document that can document the agreement as a gift, which some parents like to do. The platform also helps you take steps to become financially minded, by helping you manage your money and loan agreements without affecting your credit rating. It’s almost practice for later on in life when we might need to go to a bank for a larger loan.

 

Written for Credi Pty Ltd by Nicholas Perman

 

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.

What to do when reality hits!

reality hits

Written for Credi Pty Ltd by Alexandra Rough

Imagine you have just come home from your whirlwind six-week getaway to Europe. You have spent weeks walking, eating and taking thousands of photos of this, that and the other, not having a care in the world about your responsibilities waiting back at home for you. You have spent days lying on the beautiful Croatian coast, you have walked along the cobbled streets of Italy, eating ice-cream until you couldn’t eat anymore, you have wrestled with the thousands of tourists cramming into the Tube and all of a sudden you are now home and little did you know reality was about to hit you real hard. This was me, this is my story of being a twenty-something globetrotter whose travelers high came crashing down, fast!

Travelling around Europe was a dream I had had since my days in middle school, I spent my days scrolling through pictures of all the sites and places I wanted to go. I pinned pictures to my wall to keep me motivated to save and I meticulously planned my trip for a year in advance. I worked two jobs, tirelessly, throughout my first two years of university to pay for the trip. Being a uni-student and saving is not always the easiest thing to do, life is expensive and adulting is hard. I went away knowing I had a small amount in the bank to keep me safe for when I returned. I had a budget for my trip and to my surprise, I didn’t completely blow my budget and nor did I have to call the ‘Bank of Mum & Dad’ while I was away to bail me out, unlike a few of my friends… (but that is another story).

I have stepped off the plane, still slightly jet-lagged, I have a half unpacked suitcase, I have a pile of laundry the size of a small hill forming a nice blanket for my bedroom floor and I’m racing out the door to catch up with friends for the first time in weeks. I grab my car keys and jump into my car. My car and I have been everywhere together and I can’t remember a time that it wasn’t around, you see it has been with the family since before I was born and was graciously handed down to me when I first got my license. Before I left, my car precious car had definitely been showing some signs of aging, you could no longer wind the windows down and the doors were slightly unreliable, but I was confident it would go the distance. I go to put the keys into the ignition, excited to meet with my friends, but it doesn’t start. Nothing. Just the empty clicking sound of the engine trying to ignite and failing miserably. So I called the mobile mechanic service and there was nothing they could do to resurrect my helpless car.

Stranded and having the reality of life hitting me hard, I was faced with the impossibility of finding a car not only to catch up with my friends but for my everyday life of getting to work, university, sport and everything in between. What was I going to do? I had just come home, not having worked in weeks and had a bank account that hadn’t looked this low since middle school. My small amount of safety money wasn’t going to cut it. But I needed a car, public transport wasn’t an option, taxis are for the wealthy and cycling was pointless with our weather. I had to buy a new car. But how? I looked into buying a super cheap second-hand car that might last me a few months (at best) whilst I got my feet back on the ground or I could get a loan. With option 1 being ruled out due to the fact that I would soon be left with the same problem in the not too distant future, option 2 was the only way I was going to solve my little predicament. Then I had another choice, go to the bank, get a car loan, pay lots of interest and or book a meeting with the ‘Bank of Mum & Dad’ and beg them for a loan.

Luckily, my parents were willing to lend me the money to buy a new car and today as I rolled out of the dealership in my brand new, super shiny and very sleek new car I am so excited to go meet up with my friends and finally tell them all about my epic adventures! Now I just have to worry about making my repayments to them, but thankfully I don’t have to worry about that as Credi keeps on top of it all and makes it super simple for both me and my parents to stay informed and on top of the finances at all times!

 

Written for Credi Pty Ltd by Alexandra Rough

 

family loan agreement template

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.

Learning how to adult and sometimes asking for help

adult

Written for Credi Pty Ltd by William Moore

Why should we learn how to adult? I look at today’s youth and often think that the housing affordability crisis, coupled with a lack of education has resulted in a generation without financial literacy.

The current prices of housing in comparison to annual income in Australia has been the cause of much of the public debate in recent years.

The topic has fuelled loud and vitriolic voices on both sides of the argument with strong stances on the causes, the symptoms and whether the crisis even exists at all.

This issue has hit Australian youths more than anyone else. They have had to deal with it on top of increases in education fees and the cost of living. It’s just a confusing world for young people to get a grasp of – plain and simple. Managing and gaining property, stock, and investments all require a level of financial literacy which many young Australians lack.

It definitely doesn’t help that there is a clear inadequacy of financial education in the high school education system, which I believe is imperative to help young adults manage their finances and challenges that often arise in adulthood.

Terms of negative gearing certainly don’t have much to do with cars, and a housing bubble doesn’t sound like it means much either.

Studies surrounding Australia’s housing crisis have shown another symptom for young people, borrowing from family. With little in the way of capital, young people have been increasingly borrowing from their property-owning folks in order to get by.

Borrowing from our parents also known as the ‘bank of Mum and Dad’is having an adverse effect on the country’s economy, in a number of both positive and negative ways. Although beneficial for children whose parent’s are well off, it proves to put children whose parents can’t or simply won’t lend to them at a disadvantage.

All of that aside, borrowing from Mum and Dad doesn’t have to rob young people of their chance to learn valuable financial life skills.

Companies like Credi allow young people to approach their parental loans with the same level of financial and legal legitimacy that they would through a commercial lender. The platform helps young people draft up professional loan agreements, providing them with peace of mind while also educating them in the process.

So check Credi out if you’re wanting to properly manage and formalise loan agreements you have with a family member or a friend. With Credi, it’ll help you wrap your head around the realities of managing your finances, and maybe you’ll even pick up skills and build on your knowledge of finance.

 

Written for Credi Pty Ltd by William Moore

 

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.

Spending Can Be Saving – How to Avoid Excess Student Debt

student debt

Written for Credi by Sarah Dyce

So no one loves the idea of spending tons of money when it’s not necessary right? But there are some serious benefits to paying off your student loan now to save yourself some money in the future.

Now be honest, I bet I’m not the only one who doesn’t pay a lot of attention to their uni fees. But trust me, it’s something worth looking at.

The first time it caught my attention was when I booked my flights for a holiday. I had been saving for months and was so excited to get away! But just as I was about to finalise my tickets the payment choices included a loan option (strange I know) rather than paying by credit card. I thought about it for a moment, thinking that one loan was more than enough for me – I didn’t want to live in debt! In the days following, I started to think about the debt that I already had, and my student loan came back into focus for me for the first time in a long time. I’m sure I’m not the only one who has dismissed that as being ‘taken care of’ and something that ‘I’ll deal with when I graduate.’ Well I wish that I had paid closer attention because I could have saved myself a lot of stress and money.

Student loans, there are plenty of options depending on what uni you go to and what degree you study, but at 17 I was not considering the consequences when I applied to put my degree on FEE-HELP. It just wasn’t something that overly concerned me and I followed along with the consensus with my peers; as long as I didn’t have to pay upfront I would just deal with it later. I never expected that booking flights would be the catalyst to enlighten me of my mistake.

What is FEE-HELP and the other important things people forget about

FEE-HELP is essentially a ‘student loan option for those paying full fees, often those at a private institution or studying postgraduate courses’. But what often gets overlooked or forgotten is that students studying undergraduate courses at approved providers incur a 25% fee onto their loan.

Don’t get me wrong; I think offering students a way to gain an education while not having to pay upfront or in full is amazing – it opens the doors to so many people and allows them access to a higher education they otherwise would not have been able to afford. But, like me I’m sure, plenty of these students aren’t aware how high the inflation is on their fees as each quarter passes.

Did you know that each year on June 1st your overall debt is taxed and adjusted for inflation? Although this percentage has decreased since previous years, it’s still adding on an additional 1.5%*, which may seem insignificant, but when you look at the long-term implications of much this will cost you, you may want to pay closer attention. 

Meet Alex

To make things a bit clearer, let’s put that in context, here we have Alex.

Alex is studying a Bachelor of Commerce at a public university and is expected to graduate with about $35,000 of debt. Each semester Alex has the option to repay some of her loans or keep putting it onto FEE-HELP. Given the degree she is studying, Alex has about $5000 per semester in unit fees.

This $5000 a semester once indexed at 1.5% becomes $5,075 (an additional $75). This $5,075 then gets joined by next semesters $5000 ($10,150 in total) which then gets indexed again at 1.5% and so on and so forth etc. and all that.

So by the end of one year of study, Alex went from an expected $10,000 for unit fees to $10,150.

$150 to access tertiary education for a year is a fairly good deal, but it’s what happens next that can catch a lot of people out.

Remember Alex? She decides to switch universities and is now studying at a private provider where her debt will be subject to a 25% fee before it gets to the point of indexation. Alex now pays $12,500 in total for the year, instead of just $10,00 for the unit fees. What this means come time for indexation is that Alex will pay 1.5% of $12,500 not 1.5% of $10,000. Not only will Alex pay more to defer her fees, she pays more each year as the debt is indexed.

Obviously more factors would play into this in real life, not all units cost the same, sometimes scholarships are available, etc. But this is just the money needed for unit fees using the FEE-HELP system; this number doesn’t cover any textbooks, university administration costs, travel costs, cost of living and plenty of other expenses that university students fork out each semester.

Taking a Closer Look

All of this information altered the way I approached university. It made me much more aware of the implications that some of these government schemes entail. If you’re like me and would prefer not to fork out the hypothetical $2500 extra a year, then the next few things should be helpful to you.

  • Be proactive
    • It is never too late to look at your fees and your repayment options, 1st, 2nd, 3rd year? Doesn’t matter! Take a closer look at your FEE-HELP account to see if there is anything you could be doing to save yourself some money in the future.
  • Research
    • Yes, not the most fun in the world but researching your alternative to a government loan can be constructive if you want to prevent unnecessary fees in the future. There are plenty of websites and non-profit organisations both online and in person where you can go and discuss the options that best suit you and your needs.
  • There are plenty of other options
    • FEE-HElP is just one of the options available to assist with university fees, there are various other options depending on your degree and needs, some of these include;
      • Banks
      • Personal loans
      • Scholarships
      • Company grants
      • Mum & Dad
    • Keep an eye on the news
      • Watch out to see if there are any developments in policy changes relating to student loans
      • The government previously had a matching scheme where they would contribute you your debt if you made a voluntary repayment
      • Sadly this was removed at the beginning of 2017, but with the state of Australian government whose to say something else won’t pop up?

The Bank of Mum & Dad

After I had looked at all my options, I found the best way forward for me personally, was to take out a loan from Mum and Dad. A lot of the websites I looked at were talking about how my future employer would take a chunk of my pay and put it towards repaying my debt, which got me thinking, why can’t I do that with my parents?

A long discussion later, I organised with my parents an alternative way to cover my uni fees rather than FEE-HELP. Similar to the future employer scheme, my parents would pay my units in full (with the aim to avoid any excess debt), and in turn, I would contribute a percentage of my weekly pay to repaying them.

By organising my method of payment for uni, while yes, it does mean that for now, I have less money to add to my savings. By the time I graduate, and *fingers crossed* enter the workforce with a real job, all of that paycheck will be coming to me, not to the government.

There are some amazing websites and people out there who can help you find an alternative to FEE-HELP, one of those gems is ‘Credi.

Credi is an online platform ‘powering the bank of Mum & Dad’ as they say, which in its essence is simplifying lending between family and friends by assisting in building a loan, negotiations, contract, and repayment method. All taken care of for you! The best part; it’s FREE!  That’s right, you heard me, FREE! No need to pay any accountants or lawyers, no having the fact your parents pay for uni thrown in your face every argument, all taken care of in a nice little package for you.

Learning From My Mistake

This is the stuff I wish I had of known when I first started uni, not now I’m already in debt, but please learn from my mistakes!It’s always worth discussing with a financial adviser to ensuring you are maximising your dollar not delving further into debt than necessary. Don’t just brush it off for future you to deal with, I’ve been that person and trust me I am not happy with my past self for it!

It’s always worth discussing with a financial adviser to ensuring you are maximising your dollar not delving further into debt than necessary. Don’t just brush it off for future you to deal with, I’ve been that person and trust me I am not happy with my past self for it!

For more information on student loans, check with your institution about payment options to see what it is available for you. Discuss it with Mum & Dad and don’t’ forget organisations like Credi are there to lend a hand if things get confusing!

Happy saving everyone!

 

Written for Credi Pty Ltd by Sarah Dyce

 

Credi Loan Agreement and Repayment Management

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.

5 Steps To Asking Your Parents For a Loan

asking your parents

Written for Credi by Raffaella De Pasquale-Gentelli

 

We all know asking your parents for anything let alone a considerable amount of money can be daunting. What if they say no? What if they want me to pay it back with interest? This is why I’ve come up with five fool-proof steps to guarantee success in your mission for money. Stick with me and you’ll be bathing in hundred dollar bills before you know it. Not really. But we wish. Let’s Begin!

NUMBER ONE: Do your research

I don’t know about you, but whenever I’ve wanted something from my parents, I’ve always had better luck in getting what I’ve wanted if I put the effort into finding out information beforehand. It’s essential to know what it is you want, to shop around and find the best prices, be able to answer any questions they may have regarding the loan and most importantly know if they are in the position themselves to be able to help you. I adore making lists, as you can probably already see, so for me gathering information in list formation is a no-brainer.

NUMBER TWO: Hint

You don’t want to spring something as big as a loan for a substantial amount of money on your parents out of nowhere. Parents should get more credit for picking up on hints, whenever you think they aren’t listening, I promise you they are. Say you’re unable to afford next semesters university tuition, casually bring up in conversation how difficult it has been for you to get the money to pay for your education and how hard you’ve been working. Don’t bring it up all the time or it might just work against you.

NUMBER THREE: Get in their good books (and stay there)

This step is usually the easiest. How hard could it be to compliment your parents, right? It’s more difficult than it sounds, you want to be subtle but not too subtle so they think you want something. In this case, actions speak louder than words. Help with cooking dinner, clean around the house, laugh at your dad’s “dad jokes”, make your mum tea after dinner. Small things like this go a long way in their mind! However a small word of advice, one I learnt from my own parents, it takes 100 things to build a reputation and only 1 to ruin it all. So make sure once you’re in their good books, you try your hardest to stay there.

NUMBER FOUR: Ask for a Loan

The most intimidating and scariest part of the whole process. Asking for a loan. Confidence and preparation are key in this step. Making sure you pick the right time to be asking if you can see they are stressed or upset about something else, hold off until you feel they are in the right head space. Sit them down somewhere quietly so there are no distractions. Have your research ready and state your case and hope for the best. Whatever the outcome, your parents will always have your best interest at heart.

NUMBER FIVE: Determine the specifics

Congratulations, you got your loan!! Now you need to determine the specifics with your parents. Do I need to pay them back within a certain amount of time? How much do I pay back and is it per week or per fortnight? Do I need to pay interest? All tedious but important factors when asking or applying for a loan. It’s essential these boundaries are determined before any money is loaned to avoid any future confusion. This is where Credi comes in, the perfect tool to ensure all loans are managed correctly, and the best part.. all loans under $10,000,000 are free!!!

And there you have it, 5 simple steps to loan success. I wish you the best of luck and let me know your own tips and tricks that have worked for you, or check this link out for more!

 

Written for Credi by Raffaella De Pasquale-Gentelli

 

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.

Parents as Piggy Banks (Oink Oink!)

parents

Written for Credi by Laura Watson

The Bank of Mum and Dad

It’s an unforgettable feeling when you realise you have found your perfect first home. However, it’s an even more yet somewhat distressing unforgettable feeling when you realise that you can’t afford it. Luckily for you and many other first-home buyers, there is a solution to this financial problem: the Bank of Mum and Dad.

The Bank of Mum and Dad is an idiom coined to describe the increasingly popular arrangement where first-home buyers rely on their parents to help them enter the property market. To help you out, I have provided fours ways that the Bank of Mum and Dad can assist you in achieving your great ‘Australian dream’.

Acting as a guarantor

One of the ways that the Bank of Mum and Dad can give you a leg up on the property ladder is to act as guarantor on your mortgage. This means that your parent’s income is taken into account when agreeing on a mortgage deal, thus potentially allowing you to borrow more. As a guarantor, your parents must agree to cover your mortgage payments if you are unable or unwilling to do so. They will only be able to do this if they have a sufficient amount of equity in their own property.

It’s important to know that this strategy should be used with caution. This is because once your parents sign their name as a guarantor, they become legally responsible for paying back the entire mortgage if you fail to make the repayments. Additionally, they will also have to pay for any fees, charges and interests that you accrue. Therefore, if your parents do choose to act as a guarantor, make sure they know exactly what they are getting into before proceeding and you have easy access to legal assistance in case it is needed.

Joint mortgage

Another avenue that you and your parents can undertake is a joint mortgage. This is a great option if you are unable to purchase the entire property on your own and your parents aren’t keen on being a guarantor. This is because by signing the mortgage application together, you and your parents are both agreeing to be equally liable for the mortgage repayments. Therefore, if you opt for this method, be sure to organise with your folks on how repayments and maintenance will be managed, as well, what the exit plan will be should one party wish to sell.

Gifting land

A common approach is for parents to gift land to their children, whether it be in the form of an existing property or a portion of sub-divided land. If you are considering this approach, it’s highly recommended that your parents first seek advice on the tax implications and do research as gifting land and/or property is a ‘capital gains event’. This means your parents cannot hand it over for nothing, but instead will have to pay capital gains on the market value of the property.

Lending money

Another way to effectively draw from the Bank of Mum and Dad is to ask them to lend the deposit to you on a commercial basis. Alternatively, your parents may have equity secured in their home and thus by creating a line of credit facility they can on-lend the deposit to you for your first property. In either case, remember to have a formal loan agreement drawn up between you and your parents as well, register with the proper authorities.

While this is arguably the most popular way of parents helping their children secure their first home, where the terms of the loan are not discussed properly, it can result in a breakdown in relationships. Therefore, I recommend having a look at Credi, a web app that helps manage your loan information, track prepayments and record updates. Thus, if there’s ever disagreement over the conditions of the loan, the agreement is readily available to the both of you.

It’s now up to you

It is clear that regardless of how wealthy our parents are or are not, we millennials are increasingly turning to our parents for financial support when trying to purchase our first home. While it’s not exactly a straightforward decision to make, I hope that with the information I have provided, you are now one step closer to determining which approach is most suitable for you and your parents.

Written for Credi Pty Ltd by Laura Watson

 

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.

My Dream Car with a Dream Loan Agreement

A Dream car and dream loan agreement

Written for Credi by Harry McGregor

 

Loaning in Australia is not a new phenomenon with the Australian public lending in excess of $1.65 billion in unprotected and unformal loans each year.

In my previous blog, I noted my personal experiences in-house ownership from the perspective of a member of Gen Y. When on the web I noticed a reoccurring fact that up to one-third of first-time buyers borrow or are lent money from friends and relatives. The first thing that came to mind was how money can ruin relationships. Loans between related parties are built on relationships and the thought of being in a position borrowing without a formal lending agreement seems rather risky. And it was for me.

Two years ago, my car decided to throw in the spanner and call it a day. My 1998 VW Golf had had enough and I was in desperate need of a new vehicle. In light of the lifestyle I live of surfing, beach and my dog Layla, I came to the conclusion to purchase a ute, and this is where it became interesting. I decided to have a search online at second-hand cars and picked out the one, a 2006 Nissan Navara. The next step was car loans. When searching for the best car loan I came to a figure of $96.88 a week which whilst studying I could potentially do. When I dug a bit deeper I found something interesting in the fine print of the car loan;

“This calculator is a guide only. Your interest rate and payments may vary according to your financial situation and other credit approval criteria.”

For a 21-year-old with limited finances and no previous credit history, the figures just kept going up and up and my hopes of purchasing my dream car were dwindling. I signed up to Credi and with the help of my parents, I was able to drive out of the car yard with no interest rates and free of a bad credit rating. But it doesn’t stop there. Just as my one-month warranty ran out, the clutch blew… a $2200 bill. Due to Credi’s help, I was able to increase my repayments and get the help I needed.

Money should never get between relationships and thanks to Credi the terms of the loan are being met and things have never been better! Thanks Credi, From Harry and Layla.

 

Written for Credi by Harry McGregor

 

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.

Relationship Lending 101

Relationship lending

Relationship Lending can be a sticky mess. So here’s a guide for all the people that have been taken advantage of for their generosity in lending money.

This blog pretty much came about because of a situation I was put in because a friend avoided paying me back the money she owed me. She would use every excuse imaginable and would simply not reply to any message if it concerned the loan.

So I put it to you, have you lent your friend some money and in the end it reached that point where you’ve had to chase it up so much you’ve just given up?

My issue with Relationship Lending

Let’s think about it rationally. The first point I’d like to make is that it’s not just you, things like this happen to a lot of people and it’s just life, or more like one rotten individual that decides to take advantage of you. Also, relationship lending is a constantly increasing way of loaning and borrowing money, and with no formal documentation, situations like mine constantly occur. 

I know people will say it’s a good learning experience, but heck, it shouldn’t be seen that way. As a child, I was brought up to repay or give back what I borrowed. It’s just common decency. Where I’m from it’s definitely not a thing to avoid paying someone back. It’s not just rude, but that person is being selfish and potentially risking a relationship.

Let’s face it, it is an experience we learn from. As we hear and learn about experiences like this we learn to be a bit more careful with our money and whom we lend it to. These next few steps are what I’ve come up with that help me loan between family and friends in the safest and most manageable way.

Look at their history

If it’s a friend you’re lending to, have a solid think about past events. Specifically think about situations where splitting bills, buying rounds and offering to pay have arisen. For example, if you’ve offered to pay for something of theirs do they offer to split it or even repay you, or do they just let you pay it? If you buy rounds do they actually buy ‘the next round’? Do they offer to pay for you when you go places?

Another key aspect of this is to consider how close you and this person are. Are they someone you enjoy spending time with and constantly catch up with? Maybe they’re the kind of person that doesn’t stay in touch and waits for you to contact them. Maybe they’re a family member like a parent or sibling. Or maybe they’re a distant European cousin saying they’ve got cancer and need help…..seems legit right!

Look who’s asking!

Are they asking or are you offering? Always consider who’s initiating the loan. I’m not saying don’t lend to people that are asking, however, suss out the importance of the loan to them and the reasoning for the initiation.

Let’s put it this way, if someone’s whining to you about needing money and they’re obviously hinting at you loaning the money to them, then maybe it’s an ‘enter at your own risk’ situation.

Some people may approach you in a reasonable manner. For example, sit you down, ask for a loan and offer repayment details straight off. They’ve obviously thought about it, really need the loan and want to prove to you they can be trusted.

If someone you’re friends with but don’t see often asks for a loan, to me, I can see red lights flashing. Maybe they’re a genuine person and simply trust you over anyone else, but be sure if you do progress you have other methods (listed below) in place to make sure it’s repaid.

I’m INTEREST-ed

Let’s put it this way if they honestly need the money and have every intention of repaying the money then they won’t mind if you charge an interest rate or even ask for some cash on top of the loan for agreeing.

Personally, I don’t use interest as a way to make money off someone in need, however, it’s more of a security mechanism for me. By them agreeing to the interest/interest rate they’re saying, I need the money and this interest is an assurance for the lender.

Document it!

Our society is constantly becoming more tech savvy, so it doesn’t surprise me that there’s an exponential growth in fintech (financial technology). One in particular, that I would definitely recommend is credi.com!

When I started working at Credi and understood the platform and thinking behind it, I realised that I’d never make this mistake again. Signing up for a Credi account is simple and it’s FREE! It’s a great little tool that helps to make relationship lending formal, safe and manageable. The platform even has adaptive and unique features such as E-signing, repayment schedules, email & SMS notifications, interest rates, negotiation and much more.

 

With these key steps, I find relationship lending a much easier and less stressful process. I’m constantly lending to my siblings and now that I follow my own little guide I no longer have to chase people up or have arguments surrounding unpaid loans.

I hope these steps on relationship lending help you lend and borrow from friends and family.

 

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.

Becoming your own personal loan specialist

Personal loan specialist

What if I told you there was a way to get a little more money out of your parents. That there’s a perfect way to show them that you’re responsible, reliable and financially savvy – and, well, become your own personal loan specialist!

Just like every person these days likes to retort ‘google it’, I’ll just say to you #CrediMe!

What’s Credi? Well, have no fear, cos I’m here to give you the insider on the little financial technology (fintech) company I call home.

Credi.com, a vital piece of fintech, is one of the fastest growing lending platforms in Australia. We’re an online platform that helps all you millennials and the ‘Bank of mum and dad’ (BOMAD), set up a loan online, document the details, create a repayment schedule, and formalise everything with an agreement and E-signing component. Our fintech platform has already helped hundreds of Australian businesses, friends and families formalise their loans and then manage them – protecting their relationships, avoiding disagreements.

So why not be your own personal loan specialist and set up a loan today. Just add your details, suss out your own repayment details and negotiate the loan like a boss.

Because hey, if Tim Gurner can get his little old grandpa to give him a $34,000 ‘kickstarter’ and become a millionaire, surely we can get a smidge from our parents.

So let’s prove the ‘Bank of Mum and Dad’ wrong and show them we got our s**t together. Well, together enough to write in a few details into a platform and in turn get more money to pursue the beautiful things in life….such as that Contiki trip to Europe that’s been on your mind. They might even be so impressed by you making it a formal agreement that they may forgive the loan.

 

 

 

Credi Pty Ltd (Credi) is not a bank or a financial lender. Credi only provides a platform that allows friends, family and third parties to originate, negotiate and conclude loan agreements amongst themselves. Credi does not provide advice, monitor or assess, agree, approve or decline any loan requests nor does the platform perform any funds transfer services.  The use of the Credi platform is governed by Credi’s Terms of Use

NOTE: The views and opinions expressed here are mine and do not necessarily represent or reflect the views of Credi Pty Ltd.