Tag: consolidate your credit card debt

Categories
Debt Consolidation

Questions You’ve Had about Consolidating Debt But Haven’t Asked

Debt Consolidation Loans

Debt consolidation is regarded with kind eyes by many Aussies and often described as a solution to all of your problems. Just like the name says, debt consolidation refers to putting all of your debts together, in order to keep track of your payments easier. But perhaps you have questions about consolidating debt. Maybe you are unsure how it works and confused about how you can save money by choosing this finance option.

In this article, we reveal all!

Is Debt Consolidation the Right Choice for You?

If you’re making multiple payments per month, then you know by now that each comes with different interest rates and fees. In this case, yes, debt consolidation is the right call. Also, by consolidating your loans, you will always have to make one monthly payment, instead of sending money to a number of lenders.

Here are the top 6 questions about consolidating debt:

  1. Can I combine my home loan with my personal loan?

Consolidation allows you to combine all of your loans into a single one, regardless of their type. Keeping track of your home loan, car loan, personal loan and so on can be tiring. This is a time-saving solution.

  1. How will consolidation benefit my expenses?

Some loans have bigger interest rates than others. By combining them, you will have a fixed rate that you’ll pay monthly. This way, you’ll know exactly the amount you’ll have to repay, without also having to deal with various taxes and fees that accompany each loan.

  1. Am I eligible for consolidation?

Everybody can choose to consolidate their debt. Still, check with your lender and see if your home loan allows you this option. If not, try to change the features or simply look into a refinancing that incorporates debt consolidation.

  1. Is it better to pay my car loan in 30 years?

When you combine all your loans, you can choose to prolong the payments, in order to fit your home loan. Unfortunately, even though your rates will be lowered considerably, the interest fees will expand due to dividing the car loan for example, over a period of 30 years. You can adjust the debt consolidation to fit your needs.

  1. Should I consolidate if I have bad credit?

This is actually the main reason why people consolidate their debts. Debt consolidation tells lenders that you have placed your affairs in order and are serious about improving your financial situation. Also, it will enhance your credit score.

  1. How can the equity in my home help?

Through debt consolidation, the equity in your home can reduce significantly the interest rates you’re paying each month. Being a secured line of credit, a home equity loan will use the equity in your home as collateral, which can lead to a fixed and smaller interest rate.

If you’re having financial problems and can’t afford to pay back all your loans, expanding the loans over a longer period of time will help you get back on your feet by paying less each month. So, talk to your lender about this option.

Categories
Credit Card Consolidation

Consolidate Your Credit Card Debt

Debt Consolidation

Consolidate your credit card debt could be one of the smartest decisions you will ever make.

Get on top of credit card debt

Credit card consolidation is a good way to get on top of your debts and ensure a better credit situation for the future. Consolidation is becoming increasingly popular since the Australian Government introduced Part IX Debt Agreements to assist those that are currently in financial difficulty.

Use credit cards wisely

Credit cards, if used properly, can be great to have. However, if you are an emotional spender, not financially disciplined or not careful with your spending it is very easy to rack up debt before you realise you have a problem. It can sometimes take you months and possibly even years to get out of debt.

Understanding the true extent of your debt

If you feel that it is time to get your debts under control and do something about them, there are professionals who will assist you with the task of consolidating your credit card debt. The first thing to do is to look at your debt, and see exactly how much you owe. If you know what you owe and who all you owe it to, it will be much easier to get help.

Don’t leap into a Part IX Debt Agreement without exploring all other options

Before you consider entering into a debt agreement it is often useful to look at the credit card market and see if you can consolidate your current credit card debt onto a credit card with a low or even 0% interest rate.

Beware of additional fees

It is important to be aware of additional fees you may incur when taking out a new credit card. However, if you are in a situation where you can not manage your debt, another credit card may not be the best solution. In this case, you could consider a debt agreement. This is a legally binding agreement between you and your creditors where you arrange to pay off as much as you can afford each month.

If you are in a position where you are trying to pay off a few credit cards, consolidation will put everything into one bill, therefore, making it easier for you to pay. Paying just one bill can help you save a lot of time, as well as preventing stress.

Only consolidate debts if you can reduce the overall amount of debt

Consolidating your credit card payments into one bill can make your finances more manageable; however, you should never do it for that reason alone. If doing this will result in you paying back more, then it is not a good idea. You need to consolidate your debts in such a way that you will reduce your overall monthly repayments.

If you would like professional assistance consolidating your debts feel free to contact the Australian Lending Centre on 1300 138 188.

Talk to us today