Doing it tough? Here’s where you can get genuine financial help

It is ironic that a cost-of-living crisis, where we are contending with price rises on everything from petrol to mould killer, triggers an increase in the cost of our mortgages.

However, inflation spikes mean higher interest rate. Plain and simple.

Still, households stayed upbeat and spent up big in the March quarter, despite the Omicron COVID-19 wave and widespread flooding on the East Coast. Or so say the March quarter gross domestic product figures.

The June quarter may well tell a different story, as hip-pocket pressures hit harder.

If money is getting too tight in your house, there are some sensible steps you can take… and even places you can get free help.

However, those claiming to assist are not always legitimate, so it is crucial that you can distinguish between the productive and the predatory.

Let’s start with the latter, most dangerous type.

‘Loan sharks’

Those ads offering quick cash to tide you over? They are from companies that used to be called loan sharks, but now prefer to be known as payday lenders. They issue small loans of up to $2000 that you have between 16 days and one year to repay.

However, far from being a quick financial fix, the fees can mean that the equivalent interest rate you pay on the loan can be as high as 400 per cent. The thing is, there is no actual interest rate, so these products fall between the cracks of the .

Despite the federal government announcing a crackdown on these lenders years ago, election day marked 2000 days of delay. So, in the panicked pandemic days, these dodgy outfits thrived.

Ahead of any potential move by the new Labor government, they are poised to pounce again with their shiny ads promising to bail you out. Beware.

‘Your pay now’ services

Realise that services that promise you early access to your pay packet – again, no matter how straight-up they sound – are instead trying to make money from you. Otherwise, why would they bother?

If you are unable to wait for your weekly, fortnightly or monthly pay, and are tempted to instead access-as-you-earn, you have a financial problem that you threaten to make worse. Read on.

If you have multiple buy now, pay later transactions outstanding, or indeed use multiple BNPL services, you also need to consider the below, too.

No-interest loan scheme

Now, this one sounds suspicious, but it is above-board.

Issued by not-for-profit via a network of hundreds of charities around the country, low-income people can gain loans for such things as broken white goods or emergency repairs, such as your car, as well as medical bills or even essential education expenses.

These loans – up to $1500 – are available to people with a healthcare card or pension card, or single people on less than $45,000 a year after tax, or $60,000 for couples.

Repayments are set at an affordable amount, and you have to prove you can make them over 12 to 18 months.

There is also a way to immediately ease household expenses, if you are doing it tough.

Financial hardship provisions

Soaring energy prices, plus a cold snap on top, are set to strain many household budgets.

As counter-intuitive as it is, if you do not think you can pay a bill, tell your provider in advance. That goes for utility companies, telcos and debt providers, including mortgage lenders.

All are required to have dedicated financial hardship departments, and pandemic conditions contributed to these becoming more efficient and understanding.

Ask for leniency or even repayment holidays.

Free financial counsellors

If you are struggling, or are worried you soon will be, you do not have to face it alone. There is help at hand.

Through the (1800 007 007), you can get free financial help today. The confidential counselling you will get there includes a sustainable plan to help rebuild your finances.

You can also get assistance with a no-interest loan and/or accessing hardship provisions from service providers, or they can advocate for you with Centrelink.

  • Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Nicole Pedersen-McKinnon is the author of . Follow Nicole on , or .

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