Top Mistakes to Avoid When Buying Business Insurance

More than just helping to cover costs that are associated with property damage and liability claims, business insurance will protect your business, your employees and even your customers. But with the number of coverage options offered by insurance companies and each of them telling you how theirs is the best deal you can get, you can easily get misled.

However, even if finding the right business insurance can seem tough, it’s really not that complicated. When shopping around for the right policy, you simply need to beat the following 15 points in mind (These are pitfalls you want to avoid when you are trying to buy the ideal business insurance for your business):

Mistake Nº 1: Buying the Least Expensive Policy

Watching your bottom line must not lead to you seeking out the cheapest options out there. If you buy a policy based on price rather than value, you run higher chances of landing in hot water when it comes time to file a claim.

Mistake Nº 2: Getting the Business Description Wrong

If you are requesting a quote online, you’ll probably have to fill in a form. Online forms typically have drop-down boxes with generic business descriptions. Getting this wrong will also mean getting an a quote for a policy that doesn’t cover all the activities of your business.

Mistake Nº 3: Not Getting Enough Property Insurance

You should be aware that getting an insurance without the adequate limits means that there’s a possibility that the disbursement you get won’t cover the totality of the replacement cost or the repair cost. This is simply because the insurance company will only cover the amount you insure and won’t cover the loss in full if the replacement and repair cost exceed that limit.

Mistake Nº 4: Not Including Business Interruption Coverage

If you want soundproof cyber protection for your business, you must not fail to purchase a cyber policy that includes business interruption coverage. You might have to pay a additional premium for that, but it will be worth it as business interruption for a small business can be disastrous.

Mistake Nº 5: Not Having Sufficient Disaster Insurance

As mentioned above, not getting the right insurance will only put you at greater risks. While you may want to limit your expenses, you should ensure yourself against threats that can damage your business the most.

Mistake Nº 6: Choosing Low Deductibles by Default

This one is just as bad as the first mistake mentioned above. The reason why you must avoid automatically purchasing damage insurance with low deductibles is that you may be buying more insurance than you need.

Mistake Nº 7: Not Adjusting Your Coverage

As your business changes over time, so will your needs. And it is inconceivable that business owners don’t do the same for their coverage. Remember to reevaluate your insurance needs several months before the renewal of the policies.

Mistake Nº 8: Not Reading the Policy Carefully

If you don’t read the policy well, you will not be aware of the numerous warranties and conditions precedent mentioned in it. This, of course, means that there’s greater possibility of your business not complying with those. And non-compliance usually leads to a claim being turned the worst case scenario, the entire policy can be invalidated.

Mistake Nº 9: Failure to Thinking About Health Insurance Options

You don’t have to wait for the renewal period to discuss health policies for your employees. Discuss your needs with your insurer and let them advise you on what’s best for your business and employees.

Mistake Nº 10: Not Willing to Change Insurer

Even if you have a great relationship with your current insurance company, it doesn’t mean you have to stick with them year in year out. Shop around and see if there are other insurers who can offer you better policies.

Mistake Nº 11: Not Purchasing A Policy that Covers for Online Sales

If you want to break into e-commerce to expand sales globally, think of getting a product liability insurance before. It will help protect you against expensive lawsuits over defective products.

Mistake Nº 12: Not Going to Right Broker or Agent

Considering that the broker will get commissions on the premium you purchase, it is important to find one that works for you and who is willing to meet your specific needs.

Mistake Nº 13: Not Listing All Entities or Locations

Since the majority of policy cover only entities that appear in the declarations, failing to accurately list all entities or location on the policy means that these entities will not qualify as named insureds.

Mistake Nº 14: Not Investing in Cybersecurity Insurance

That’s something you don’t want to overlook as more and more small businesses fall victim to data breaches and cyber hacks every single year. In the event of a breach, a cybersecurity insurance will protect the costs of your data and will also help cover the legal and technical costs of rebuilding.

Most Common Mistakes Small Businesses Make by Not Outsourcing to An Accounting Firm

Managing the accounting part of a business is not limited to bookkeeping (although it is undeniably a crucial part of it). There are other processes that are more demanding and could get quite overwhelming for new, and inexperienced, business owners. These activities include managing ledgers, journals, financial statements, and income tax records.

And the more the company grows, the harder it will be to efficiently manage the journals and do proper bookkeeping. Instead of neglecting the financial part of the business, it would be better to hire professionals. Otherwise, the owner will have to get an experienced accounting firm to rectify any errors they may have made. This will result in the business having to pay more than they would have initially done. Furthermore, bad management of finances could lead to a failing business.

1. Assuming bookkeeping is easy

It is a common misconception that bookkeeping is an easy task that only involves inputting data into software. Unless the business owner has proper knowledge of what is required by industry regulators and tax authorities, they will not be able to keep accurate accounts on their own.

Without this knowledge, there will be a lot of anomalies and errors in the records of the business. Considering the importance of bookkeeping to the proper running of a successful business, it would be better to hire an accounting firm to maintain the books.

2. Not understanding the requirements for a small business

An accounting professional knows the type of documentation and licenses required for starting up a business. Even if you offer excellent services if you don’t know everything about that industry you might run into problems down the line. An accounting firm can help you set up your business venture with confidence.

3. Not tracking business costs accurately

Accounting and bookkeeping lose their effectiveness when records are not kept accurately. This will result in your business being left vulnerable to being late on important bills and to losing money. It can also:

  1. get in the way of expanding your business
  2. set you up for headaches come tax season
  3. fail to reflect that you paid a bill
  4. cost your business money
  5. undermine your ability to plan for next month or beyond

4. Making data entry errors

There are several data entry errors that can occur even with the use of accounting software. Some of these errors include:

  1. Entering incorrect dates for transactions
  2. Entering wrong amounts when preparing invoices for customers
  3. Applying full payment for an invoice when only a partial payment has been received
  4. Applying a payment to the wrong invoice
  5. Selecting the wrong bank account

The owner will, therefore, have to be very careful when making entries. And if there were errors, the owner will need to have the necessary knowledge to know how to fix them. An accounting firm, on the other hand, can make sure that all accounts are entered accurately and can easily correct such errors.

5. Not understanding what a business write-off is

Unless a company completely comprehends what can be added as a business write off and what cannot, they risk running into a lot of problems when tax season comes around. How? They will have to pour over and dissect every transaction to ensure that the business does not miss an expense that could have been listed as a business deduction.

6. Inefficiently managing billing

A business can’t survive if there is no cash flow. Cash flow is essential to keeping a business operating from one day to the next, as the company will have to tap into it for expenses, payroll, and other needs. And for that to happen it is crucial for the billing or invoicing, of customers to be done efficiently.

Proper billing processes will go a long way toward ensuring that revenue comes in on a timely basis. But if the business doesn’t have a good handle on the accounting end of their operations, they will be unable to prepare invoices in a timely manner. The more they delay in sending invoices out, the more time it will take for the clients to pay them.

7. Not planning for tax season properly

Do It Yourself tax software has been designed to simplify tax return and may seem like a good solution for small businesses. After all, it can help cut costs as there will be no need to pay an accountant or other tax specialist to get the job done.

But if you lack the necessary knowledge, you can easily stumble when tackling the tax filing for your small business. This is especially challenging if the necessary steps were not taken along the way to properly document the company’s finances. An accounting firm, on the other hand, will ensure that all records are up-to-date and will not struggle as much when tax season comes.

Choosing the Perfect Wedding Venue: The Ultimate Guide

It’s undoubtedly that choosing the wedding venue is the biggest and most important decision you’ll have to make when planning your event. The location will set the theme and tone of the wedding, influence your budget, and determine the number of guests you’ll be able to invite.

Considering its importance and role in your big day, it may feel like a daunting task. Hence, it would be advisable to start going through your options right away. We’ve put up a list of things you should do and think about when deciding on your location in this post. From start to finish, these tips will facilitate the decision process.

Tip Number 1: Think about the General Location

While it was customary to hold weddings in the bride’s hometown, this tradition has almost disappeared. Nowadays, people choose different locations to have their weddings. These locations include the town or city where the husband or other spouse grew up in, in the city, in a country the couple has always wanted to visit… the list goes on.

But whether it’s the hometown for convenience or another country for its backdrop, decide on the general location as soon as possible. This will make finding specific venues easier.

Tip Number 2: Set an Estimated Guest Count

This is just as important as your budget. Firstly, because it can considerably impact your budget. And secondly, not every wedding venue has the same capacity.

Therefore, if your guest list consists of 75 persons you will just need to have a venue that accommodates this number of people and that fits your budget. But don’t just come up with a random number. Sit you with your partner and plan carefully. While you may not have an exact number, you will have an estimate that will make finding the venue easier.

Tip Number 3: What Is Your Budget?

Wedding venues do not come at a small price. In fact, the venue cost can amount t around half of your wedding budget.

Considering the amount of money you’ll already be spending on your clothes, food, photoshoot, transportation and honeymoon, think about setting a clear budget for your venue from the onset. It will make choosing the venue easier.

Tip Number 4: Think about You Want for Your Wedding 

What would your dream wedding venue look like? When trying to imagine how you want it to look like, think about themes, colour schemes and season.

Are you looking for a traditional wedding? Or do you want an outdoor ceremony? Just as with your guest list, you will need to sit down with your partner and decide on your priorities.

Tip Number 5: Set the Date

If you already know when you want to hold your wedding, good on you. If not, at least try to narrow down some dates. It will simplify the wedding venue hunt, trust us!

Tip Number 6: The Internet Is Your Friend

Use it wisely. It’s not just about using Pinterest to find the perfect location (even though it is a very helpful app).

Look at reviews. Visit their websites. Check for photos taken by guests. These can help you narrow down your list of potential venues considerably.

Tip Number 7: You Don’t Have to Go On-Site to Ask Questions

Among the venues you’ve looked at, consider contacting you top 3 – 5 favourite venues to ask questions. You can ask about the date (it won’t be worth visiting if they are already booked on that date), the capacity of guests the venue can hold, any other additional services they offer and the pricing.

Tip Number 8: Visit 

You cannot make a definite decision without first visiting the venues that you’ve shortlisted. You’ll want to see how the venue really looks like in person and meet the staff and venue coordinator as well.

Another wise thing to do would be to visit at the time and the season you want to get married in. It allows you to have a clear picture of how the venue will look like on that day. 

Tip Number 9: Remember that Even the Perfect Venue Comes with Some Cons

Now that your list has been considerably shortened, remember to weigh the pros and cons of the venues that still remain on your list.

While something may feel seem like a positive thing to you, it might not be the same for your partner. Sit down with them and draw a list of these benefits and drawbacks before making a decision.

Tip Number 10: Signing the Contract

Now that you’ve chosen your perfect venue, ask to sign a contract. It is the best way to make sure that you’ve secured your desired venue.

However, do not just sign on those dotted lines without having properly read the contract. Read it carefully and ask for clarification if necessary. It’s an important decision, and even though you might be tempted to sign the contract and be done with it, affixing your signature to a contract without giving it a close read first might cost you a lot down the road.

10 Things to Look for When Trying to Find a Bookkeeper

Choosing a professional bookkeeping service means that your employees won’t have to focus on the financial nitty-gritty of the company. Instead, they will be able to dedicate their time to more constructive tasks, such as finding ways to constantly improve their services.

Bookkeeping is essential to helping your business grow and is necessary even if you already have an accountant.

Aren’t accountant and bookkeeper one and the same? Nope. These are very distinct roles with their own types of responsibilities. Bookkeepers are only responsible for keeping a clean record of all its financial transactions while accountants use these records to prepare financial accounts.

Entrusting your finances to a reputable bookkeeping service guarantees that your company is complying with state and federal laws and tax regulations. Proper bookkeeping management will also allow you to fully understand your business operations and ensures you make wise financial decisions.

How Do I Find the Right Business Bookkeeper?

1.      Find a Bookkeeper that Has the Right Skills

While a bookkeeper does not need a state-issued license (unlike accountants), they still need to have some level of training. Bookkeepers in Australia need to have the following to become certified bookkeepers:

  • Complete a certificate IV or higher in bookkeeping or accounting
  • Possess at least 1,400 hours of bookkeeping
  • Be registered as a BAS agent

2.      Find a Bookkeeper Who Is Experienced

Regardless of whether you choose to hire an independent bookkeeper or contract a firm, find one that has extensive experience. Conduct interviews if necessary and do not shy away from asking bookkeeping prospects in-depth questions about their career path and the accounting software they use. This will help you avoid hiring the wrong candidate.

3.      Find a Bookkeeper Who Regularly Updates Their Knowledge

Technology and tax and business regulations are constantly evolving. You do not want to work with a bookkeeping firm that has not stayed up to date with accounting news and technology. To ensure the firm you want to contract has stayed abreast of evolving tax and business regulations, ensure that they are continuously upgrading their skills, business services, and technological.

4.      Find a Bookkeeper Who Wants to Build Their Business

If the bookkeeper has the ambition of growing his or her business, he/she will ensure that they offer only the highest level of service to their clients. A leader understands that the better their clients do, the better will their business do in turn.

5.      Find a Bookkeeper You Can Trust

On top of qualifications and good references, you need to find a bookkeeper who is honest, transparent and highly ethical. You want to make sure that they would be easy to reach. We do not mean that they have to make themselves available to you at the drop of a hat – they have a business to run too. But they should be available should you need any clarification.

6.      Find a Bookkeeper Who Is Reliable

When we say reliable, we mean a bookkeeper who has a track record of excellence – they need to be able to meet deadlines consistently, be efficient and respect each client’s confidentiality. It goes without saying that if they offer high-quality service to their existing clients, they will do the same for you. You might want to look for companies that have a long-standing presence, as this is a testimony of the level of their work.

7.      Find a Bookkeeper Who Is Well-Informed

If you look at the technological aspect, this means bookkeepers who are familiar with the accounting software your business uses.  When it comes to the financial aspect, on the other hand, you want a bookkeeper who can provide real-time financial reporting and offer insight into your financial progress.

8.      Find a Bookkeeper Who Is Organized and Has Good Communication Skills

While you do want someone who is good with numbers, is fundamentally organized and detail-oriented, you also want someone who can communicate well. Being adept at dealing with only one of these thing may be a red flag. Remember that the bookkeeper will have to listen well and explain reporting and retrieval of financial data clearly to you- especially if you are not an expert in the field.

9.      Find a Bookkeeper Who Understands Your Industry

Remember how we said you needed a bookkeeper with experience? Well, if the bookkeeper has an in-depth knowledge of the industry you are in, it’s even better.

It might even be preferable to hire someone with only two years of industry-specific experience rather than someone with 10 years of general bookkeeping experience.

10. Find a Bookkeeper Who Prioritizes His Clients

What does this mean? It means that the bookkeeper or the firm is proactive, respects your time, and tries to understand your objectives. The firm should also be willing to continually upgrade so that their clients remain at the forefront of their respective industries, and ahead of the competition.

Car Detailing: What Is It? What Does It Cover?

First Thing First: What Exactly Is Car Detailing?

Car detailing is not the same as car washing at all. Unlike car washing, detailed car washing can make a vehicle look spotless as an automated system is not used when cleaning the inside and outside of the vehicle. Instead, it involves meticulous step-by-step handwashing by very experienced detailers. Since it involves a thorough cleaning by hand, you can even say that detailing goes beyond the normal car wash.

Car detailing can restore your vehicle’ to its former glory and protect your investment by reconditioning both the interior and exterior of your vehicle. Most detailing companies’ services extend beyond automobiles and offer detailed car washing for motorcycles, SUVs, RVs, buses, trucks, buses, boats, and even airplanes.

Understanding the two components in car detailing:

1. Exterior Detailing

This process involves vacuuming, restoring as well as improving the exterior parts of the vehicle, including:

  1. Tires
  2. Windows
  3. Wheels
  4. Side-view mirrors

The products used will usually include (this is not an exhaustive list):

  • Polishes
  • Wax
  • Detergents
  • Degreasers

2. Interior Detailing

The beauty of a car is not restricted to its exterior only. Far from it. The interior cabin of the car plays an important role in its overall look. Interior detailing is essentially cleaning the inner parts of a vehicle and requires more effort and time than exterior detailing.

Interior detailing can clean any type of fiber, such as:

  1. Leather
  2. Plastics
  3. Vinyl
  4. carbon fiber plastics
  5. natural fibers

Techniques employed include:

  1. steam-cleaning
  2. vacuuming

What to Expect from Auto Detailing?

Auto detailing can be done on a previously owned vehicle, on a vehicle you are planning on selling or on your regular car.  It can restore the car’s original beauty and make it look great again.

i. Duration

Auto detailing is a long and arduous process that requires methodical and meticulous cleaning. Depending on the condition of the vehicle, a thorough and high-quality detailing job should take anything from four to six hours to be completed.

You can either leave your vehicle at the detailer’s and pick it up after the detailing has been completed or wait there itself until the work is completed.

ii. Pricing

Reputable detail companies offer detailing work bundled into “packages.” They will have several package levels and each package has a set cost. For example, interior vacuuming, window cleaning, exterior wash, and surface polishing are considered to be basic detail options. This package should cost less compared to others. There might be an exception if your vehicle is exceedingly dirty or if there are lots of pet hair on the seats or upholstery. The company might charge an additional fee in these cases.

If you are worried about the pricing and your vehicle is extra dirty, it would be prudent to do some vacuuming yourself before dropping it off to the detailer. Additionally, local car washes might be the best option if you are cost-conscious. Dedicated detail companies would have more options and a more professional team, but it will come at a higher price.

iii. Results

While in most cases car detailers can restore the vehicle to near-mint condition, you can’t expect every detailing job to yield the same results. Even if the level of service provided is exemplary, the age or condition of the vehicle will affect the end result.  

What you can expect is for:

  • every detail of your vehicle to be cleaned, even the cracks and crevices
  • the paint to be touched up
  • the tires to be cleaned and shined
  • the vehicle to be spotless on the inside
  • the outside of the vehicle to be free of water spots

Benefits of Professional Car Detail

There are several benefits to getting a detailing done by a professional. Below are the 3 top advantages of professional car detailing:

1. Improved resale value

Everybody loves that “new car” look and smell. In addition to being well-maintained, if both the exterior and interior look as good as new, the vehicle will demand a higher selling price and will sell faster.

2. Fewer penalties to pay if the car was leased

Spills and stains happen, and you can end up being penalized for them when returning the vehicle. To avoid ponying up cash for lease-return penalties, ensure you keep up maintenance on the vehicle. This includes detailing the exterior and interior on a regular basis.

3. More Convenient

While a complete auto detail isn’t cheap, it will save you time as you can just drop off your vehicle at the dealer’s and pick it up once they have completed the cleaning and restoring. It is also convenient as it saves you from the hassle of washing, waxing, and vacuuming.

To Conclude, Here’s a Bit of Advice:

  1. Remember to check reviews to find out what other customers say about a company before considering going to them.
  2. Ask the dealer if they carry insurance that covers damage that may be caused by their employees.
  3. Remove any valuables from your vehicle before leaving it in the company’s care.
  4. Check the company’s policy on lost items. A reputable dealer should have one.

Who Is A Process Server and When Do You Need to Hire One?

What does a process server do?

The two ways in which legal documents are served include personal and ordinary service. Personal service in when court documents are served by a person, while ordinary service is when court documents are served by mail, fax or email. The person who serves legal documents to individuals or businesses is called a process server. The process server is not only responsible for serving court documents to defendants involved in court or legal cases but is also responsible for document recovery and court papers filing.

The legal documents they serve to defendants or individuals scheduled for court proceedings include summons, subpoenas, restraining orders, and divorce papers. While it might seem like a simple task at first glance, it is far from being easy. Process servers must be able to stay calm and impervious under any circumstance while also being persistent and patient. Knowledge about legal procedures and rules for each province is also a major part of their jobs.  

After having served the legal documents, process servers then have to submit evidence to prove that they have indeed delivered the legal papers. This evidence is called an affidavit of service. This affidavit is proof of service that has to be notarized and produced to the court representatives, investigative firms, lawyers, or to the person who contracted the service of the process server.

Why are they important?

Even the smallest mistake in the legal procedure can lead to an entire case being thrown out. Hence, process servers are necessary because they play a key role in ensuring that the due process of law is upheld and that all legal papers are served in an appropriate and highly effective manner. Unless these legal documents are served properly, it will be impossible for the court to rule on a case if the defendant were not legally made aware of it.

In addition to maintaining records to ensure that legal proceedings can occur, process servers support legal and court activities by:

1. Locating Individuals to be Served

It is the responsibility of the process server to locate the individuals involved in court cases.

  • What does this task entail?
  • It is not just about accessing public records databases to identify the defendants’ current whereabouts and contact information. Since most individuals might try to skip town to avoid process servers, the latter have to be resourceful. They will need to find innovative ways of tracking down the defendants’ new locations and also know how to approach them even if these individuals are actively trying to evade them.

2. Hand-Delivering Legal Documents

The most important task of a process server is to hand-deliver legal papers, such as summons, subpoenas, and restraining orders to individuals involved in court cases.  

  • What does this task entail?
  • The process server cannot deliver any document without first getting the verbal confirmation that the recipient is indeed the individual named in the legal document. Once the document has been remitted, the process server must then collect the individual’s signature. This will serve as proof that the document was well delivered.

3. Maintaining Delivery Records

Maintaining delivery records is a crucial part of their job as even an open and shut case can get thrown out on a technicality, such as the mishandling of information.

  • What does this task entail?
  • Process servers need to prepare reports on their deliveries, maintain accurate delivery records for all documents they handle and update their records frequently and properly. These documents may include records of signatures, which may be used by lawyers or judges.

What are the advantages of hiring a process server?

Of all the cases a law firm handles, many of them are likely not to be in its immediate area. In these cases, hiring a process server might be the best choice for both the law firm and its clients. Below is a list of reasons explaining why law firms should consider using local process servers:

1. Lower Costs

A nationwide process server will generally charge a margin for managing the serve and more for a routine service. If you hire locally for out-of-town cases, on the other hand, you will be able to save your firm and your clients hundreds of dollars.

2. Increased Efficiency

Since the papers won’t transit from one office to another, the law firm is guaranteed a faster service. Additionally, you can count on a local process server to quickly find the people in their region, even if they are trying to run away from their court summons.

3. They know the law requirements of each province

With their legal background, process servers will be familiar with the various federal law requirements in each respective province and can, hence, ensure that a court order violation does not occur.

If you don’t want to be burdened with locating the defendant and serving the documents, consider hiring a process server. As they can take on the responsibility of serving the legal documents, you will be able to concentrate on what matters most for your firm.

Getting a Personal Loan in Australia – Part 1 of 2

If financial constraints are the only thing standing in the way of your dream or an important, we may have the perfect solution for you. Below is everything you need to know about getting the right type of loan for your needs:

Why Get a Personal Loan?

There are some instances in life that can prove to be very tough on your budget. Those instances can include sudden medical emergencies or urgent home repair and can completely drain your entire savings.

Or there might be a once in a lifetime event or opportunity that you don’t want to miss at all cost, but don’t have the funding for it. Since banks will not ask for the purpose of the personal loan, you can use that loan to assist you financially or save you from a tight spot. Personal loans can help you with:

  • Easing financial stress
  • Converting several loans into a single one (called debt consolidation)
  • Home renovations
  • Buying household goods and furniture
  • Buying a computer, laptop or other electronic equipment
  • Going on an exotic vacation
  • Supporting home loan repayments
  • Help with school fees
  • For the balloon payment on your lease

Five Advantages to Taking a Personal Loan

  1. If you choose to take an unsecured loan, you can bypass tangible collateral like mortgages and car loans.
  2. Repayment options are generally small and cover a relatively short period of time.
  3. Sometimes the interest rate is negotiable.
  4. Certain banks or financial institutions offer better interests on personal loans than on credit cards.
  5. It is possible to get a loan with a fixed interest rate repayments throughout the life of the loan.

7 Types of Personal Loans

Depending on your needs and financial situation, you can choose from a number of personal loan options. The most common types of personal loans are as follows:

1. Variable Personal Loan

Since variable personal loans levy adjustable interest rates, they are perfect for people who want to benefit from lower interest rates. The most considerable advantage of this type of loan is that it offers borrowers the possibility of making higher payments. The overpaying can lead to you paying back your debt earlier. This occurs because on some months the interest rate may be lower than others, hence making your monthly repayment higher than what it should be.

2. Fixed Personal Loan

The one risk that comes with variable personal loans is that the interest rate can rise, leading to higher monthly repayments. You can skirt this whole issue by choosing to get a fixed personal loan. Since it has a fixed interest rate, the repayments will remain constant for the entire term of the loan. Hence, this type of loan not only offers stability but can also simplify budgeting all because the monthly repayment amount stays unchanged. However, you will not be able to clear this loan as early as you would with a variable personal loan because you cannot make extra repayments towards your fixed loan.

3. Secured Loan

Loans are called ‘secured’ when the borrower offers some assets to be kept as collateral with the lender or financial institutions. Personal vehicles, personal real estate, a plot of land, investment accounts, savings account, and even jewelry and fine arts can be put up as security to borrow a certain amount of money. If the agreed repayments are not made, the lender will acquire the asset and can sell it to cover the cost of the loan. The advantages of getting a secured personal loan are that you can get a lower interest rate and borrow more money.

4. Unsecured Loan

Once you know what a secured loan means, it’s easy to understand what an unsecured loan is. Essentially, you will not be providing any asset as collateral for the amount you’ll be borrowing. However, if you want to apply for an unsecured loan, you’ll have to be able to prove that you have a regular income. The lender needs this evident to ensure that the borrower will indeed be able to repay the debt. However, you’ll probably get less than you would have you offered an asset.

5. Overdraft

Overdrafts, also known as a line of credit, are attached to checking accounts. If you’ve been approved for this type of add-on, the overdraft will help you in case you face an emergency and require urgent cash. It not only allows you to withdraw an amount, but it also protects you from missing payments. Interest payable on this type of loan is only on the amount borrowed.

6. Student Loan

If you are a student or a parent looking for a loan that will cover the course fees, living expenses, textbooks and laptop fees of your child, fear not! Many financial institutions in Australia offer student loans to help ease the financial burden of university goers. Instead of working part-time to earn minimum wage, you can sit back, focus on your studies and worry about your repayments once you’re done with your degree.

7. Debt Consolidation

Debt consolidation involves taking out a loan to repay and combine all other loans you already have. It is a type of refinancing that will not only simplify monthly repayments but also decrease the amount you have to pay thanks to the lower interest rate. Hence, debt consolidation can help you save money and reducing the loan term.

This post is Part 1 of a 2-part series. Part 2 can be found here.