Did it ever occur to you that personal loans could be consolidated? Today, we will talk about something that your creditors don’t want you to know on the topic of the consolidation loan.

We’ll start with the basics. Debt consolidation authorises you to combine your existing loans into a sole one. For the most part, it is a legit way of diminishing the interest rate and fees you pay, enabling you to get relief from debt sooner than later.

A debt consolidation loan typically offers favourable interest rates and fees. Still, don’t forget to consider the early payout fees and the refinancing expenses. At the end of the day, what matters most is to make the financial decision that will genuinely help you to save money.

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How to Make a Debt Consolidation Loan Work for You?

Normally, people choose debt consolidation to minimise their current expenditure and boost the manageability of their credit. For instance, let’s say that you owe $6,000 on a personal loan, $2,000 on a store card, $2,000 on your credit card. In this scenario, you could browse for a debt consolidation loan of $10,000.

For starters, you’ll have to make a single repayment. No longer should you stress about multiple fees and interest rates. That will make your life easier and stress-free.

On a different note, you can choose from two major types of debt consolidation plans: bad credit debt consolidation and good credit debt consolidation. The latter category implies choosing an unsecured personal loan or balance transfer credit card. As for the first category, it refers to taking out a debt agreement, which is, to some extent, a form of bankruptcy.

What Type of Debt Can You Consolidate?

You have the option of consolidating a variety of debts such as the following:

  • Personal loans. This is, without a doubt, one of the most common types of consolidated debt. You could take out a debt consolidation loan to combine two or more personal loans and other types of credit. Alternatively, you could even go down the refinancing path, to benefit from more convenient rates and/or
  • Store/charge cards. It’s worth noting that balances are prone to grow on store and charge cards similarly to the way they do on credit cards. As a result, many Aussies end up consolidating such cards, as well.
  • Credit cards. In the event in which you have a huge outstanding balance on your credit card, it would be a good decision to take out a personal loan to pay it off. This could be one of your best picks especially if you’re not the ideal candidate for a balance transfer.
  • Other credit accounts. While this depends on the type of loan you decide to take out, you might consolidate other types of debt, just to name a few: private loans, debts of utility companies, so on and so forth. What remains of you to do is look for trustworthy lenders that offer you legit solutions to your financial difficulties.

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How Do You Know Which Option Is Best for You?

If your priority is to pay off your debt early and diminish your expenses when it comes to interest and fees, debt consolidation can be an excellent option. Still, the struggle doesn’t end there, since there’s no fixed recipe to everyone’s financial troubles.

If you intend to consolidate a range of personal loans, credit card debt, and so on, you could use a debt consolidation calculator. That will give you an idea about the sum of money you could save up, in the long run.

Of course, another way to ensure that you’re on the right path is choosing financial counselling.

What If I Have Bad Credit, Can I Still Consolidate My Personal Loans?

Aussies with bad credit will be thrilled to know that the answer to this question is positive. Yes, irrespective of your bad credit, you could still consolidate your personal loans in an attempt to manage repayments.

Although most lenders out there do require a good credit record to take out such loans, some authoritative lenders approve debt consolidation loans for people with bad credit, as well.

One viable example would be www.australianlendingcentre.com.au. We believe that all Australians deserve to enhance their financial situation, especially since bad credit can strike any time. So, if you lost a job, went through a divorce, or you missed a few payments due to personal problems, you can still aim at mending things with the assistance of reputable lenders.

Consolidating personal loans is an option that many Australians choose. Incorporating all your loans into a singular one can genuinely make your life easier, not to mention that you could diminish the expenses, in the long run.

Don’t forget, though, that the lender you choose can make the world of a difference – so, choose wisely!