Debt is one of the most hazardous forces to confront in the world of personal finance. It has destroyed many people’s lives in the past couple of years along with the global financial crisis, interest rate hikes and unemployment rates higher than ever.
Government statistics show that total insolvency activity in Australia rose 11% (36,479 cases) last financial year. Most of these were bankruptcies and 86% of bankruptcies were non-business related, therefore they were for personal reasons.
Drowning in Debt
To avoid drowning in debt it is important to have a financial plan. The most important debts to pay off are high interest debts such as credit cards and personal loans.
Credit cards, store cards and mobile phone accounts are the main debts that most people generally don’t control well, so they are the ones to get rid of as soon as you can.
Once you have your high interest debts under control, most people look to clear their largest debt – their home loan. It is always a good idea to focus on reducing your mortgage because paying off your home loan in a shorter term can save you thousands of dollars.
Another option is to consolidate your debts. By consolidating your higher-interest debts such as credit cards, store cards and personal loans into one debt consolidation loan with a lower interest rate, you will automatically be saving money.
We understand that it is not always feasible to follow the above advice because in life, unforseen things can occur (such as finding yourself jobless) that can send your finances into a downward spiral. That’s why Australian Lending Centre offers multiple debt solutions to individuals who are struggling to pay their debts.
|To hear about your options, call to speak with one of our friendly debt consultants on 1300 138 188 and be on your way to becoming debt free.|