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Debt Consolidation Financial Fitness Financial Planning

Debt Consolidation vs Creating Your Own Repayment Plan

consolidation loans||debt consolidation||debt consolidation loan

Choosing the right financial recovery tool can be quite a headache! What’s the best choice between debt consolidation and creating your own repayment plan? What are the factors to consider when making a decision? Read on and find out.

Debt consolidation

If you have multiple credit card balances or debts it is advisable to take out a new loan to pay them off. You can save money or pay your debt sooner by borrowing money at a low interest rate to pay off high-interest loans or credit cards. Aside from making fewer payments each month, you only have one due date to recall–this lessens the likelihood that you’ll miss payments. But, if you are not careful in choosing a reasonable debt consolidation loan, you may end up deeper in debt because of high interest rates or hefty fees and penalties. So, before you choose a debt consolidation company, make sure that they are interested in educating you on how to use your debts wisely to achieve financial freedom as much as they are interested in lending money to you.

repayment-plan

DIY debt repayment plan

Do you have a knack for DIYs? Then, think about getting out of debt without asking for external help. If you’re always late on making payments, or if debt seems too much to handle—it’s time to take the reins. But fixing your debt problems without professional help is a bit challenging for 3 reasons:

  1. You’re in this mess because you created it.
  2. You can’t pinch your skin hard enough. When it hurts, you’ll surely let go. The same thing goes to repayment plans. It’s hard to pressure yourself-because you may change the rules when it becomes difficult to follow.
  3. If your debt is too high and your income is low—you may end up getting a new loan to pay off the high-cost debts. That means you’re paying a loan by a new loan while leaving all other debts unpaid.

Here are some useful tips when choosing between debt consolidation and DIY repayment plan:

Reflect on what you did in the past 3 years

It’s so easy to label our “year” as “tight” or “bad” when debts pile up and income lessens. But there might be goals you’ve met and lessons you learned along the way. Make a blunt and honest assessment not just of the things that went “wrong” but your accomplishments as well–small or big, they don’t matter.

What were you hoping to achieve 3 years ago? Maybe it was a new house or car, a sales goal or a vacation. List down at least 5 things you planned to achieve and whether they were realised or not. If not, write down two reasons why you didn’t achieve them. Next, list 2 things you can do to achieve it next time—this time-debt consolidation and DIY repayment plan. Focusing on those two main strategies can help you come up with a tangible solution for your debt problems.

change-life

Check your readiness to change your financial life

Maybe you’re set to make some lifestyle changes today because of escalating interest rates, late fees, and frequent calls from creditors and debt collectors. But, what would happen if you only have one creditor to pay each month? Will you go back to your old borrowing and spending habits? If you make your own debt repayment plan—how determined are you to stick to your goals and resist the urge of adjusting it when they’re getting harder to follow?

Before you can truly determine if you are ready to consolidate your debt or make your own repayment strategy, take a step back and give your most honest answer to these questions first:

  1. Why do I want to consolidate my debts or follow a DIY debt repayment tactic?
  2. What will debt consolidation do that my current system of debt repayment cannot? Or, what other things can I do to make my credit status better, that I am not currently doing today? It’s because if you want to make things work, make sure that you get rid of the old strategies that don’t work and replace them with steps that can actually work. If you have many debts and you cannot manage them well because of varying interests and due dates, then why don’t you try debt consolidation? If you have tried hiring professional help in the past but it didn’t work out, maybe it’s time to consider making your own repayment strategy.

Ask Yourself

How much money do you have right now? Can you afford to buy what you need and pay for all your monthly debt repayments? If you’re hard on cash, then it is advisable to get debt consolidation. You will be able to save money on interests and you have a good chance of reducing your monthly repayments. The same thing goes to those who have enough funds but they have a poor debt strategy. Debt consolidation helps you pay on time because there’s only one debt to pay.

Contact Australian Lending Centre today to learn more about the most reasonable debt consolidation program and the debt repayment strategy suited to your condition. Apply today or call us now on 1300 138 188.

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Short Term Loans

Best Ways to Use Short Term Loans for Consolidation

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Short term loans are becoming more and more popular nowadays for an obvious reason: no one likes to drag on their payments. They want to get it over with as quickly as possible to be debt-free and considering that the application process is so smooth, this option is fairly convenient. You can also use short term loans for debt consolidation. Find out how here.

Moreover, these loans are great for those with bad credit, since they don’t need pristine credit rating to offer you a loan. The downfall, however, is that these loans have higher interest rates than the average loan. Everything “emergency-labelled” possesses some sort of risk, so in order to gain some security, lenders will raise the stakes to keep you paying.

But how can you use short term loans without burying yourself even deeper into a hole of debt? The answer is: use them wisely. You may contact our specialists on 1300 138 188 for a free consultation, if you wish. No matter if you are looking for a loan or some advice, we will do our best to guide you on the right path – and also help you avoid more payments than you can handle.

What Is Debt Consolidation?

Debt consolidation is the process of combining two or more loans into a single payment. If you’re asking yourself what difference would it make, think about it this way: with each loan, you have a particular interest rate to pay. As a result, the total payment in interest will skyrocket into space.

Granted, interest rates in debt consolidation may rise depending on the total sum; but if you can get at least 1% off the total interest, this will help you in the long run to save money – money that you can use on the payments for the actual loan.

helpful

How a Short Term Loan Will Help

Short term loans are there to help people in an emergency. As we may have mentioned, though, these types of loans are unsecured, and therefore, quite expensive. Since the lenders will be put at risk when they offer you money, they will have to turn to a high-interest rate to make sure that they are getting their money back.

Here’s a short list of the pros offered by short term loans:

  • One single payment: Nothing is more confusing than having to pay multiple loans to a lot of lenders. The risk of forgetting to pay one loan is very high, and before you know it, you’ll be staring at your credit history wondering why it looks so horrible.
  • Possible lower interest rate: There’s no absolute certainty that short term loans used for debt consolidation will offer lower interest rates, but let’s say that it’s a high 95% possibility. Used correctly, such a loan will have you paying less for each month.
  • Avoid credit score damage: By using short term loans to pay off your debt, you’ll be less likely to fall behind on your payments, and you will actually be able to stay on track. Over time, this will work to “heal” your credit score, and you’ll be able to gain credibility if you want to go for a regular loan in the future.

You may also want to keep in mind that a short term loan will be helpful only if you take out one of them. The more loans you take out, the more you will have to pay in interest. The solution would be to find some short term loan that will cover your entire debt, without having to resort to other financing sources.

Here’s how the whole process works: you get a short term loan, and the money that you will get will be used to pay off your other debts early. Not only will it help make things easier for you, but if you already had issues with late payments on the previous loans, this option will help fix your history.

avoid-traps

Avoid Getting into a Trap

The secret to avoid getting yourself trapped into a debt cycle is by borrowing exactly the amount that you need, and no more than that. Many people make the mistake of borrowing more than they need, just in case they need it. However, that “just in case” will have you paying more than you were supposed to in interest, which beats the purpose of consolidating. Basically, you are borrowing so that you can make things easier, not over-complicate them.

It’s important that you borrow responsibly so that you do not have any issues paying it back. Borrow from just one lending company to avoid the clutter of interest fees, and before you know it, your payment will be made without any further issues.

In conclusion, short term loans can help you if you want to consolidate your debts into one payment. The only requirement is that you need to be smart about it and not stretch more than your rope can handle. Enquire today and get short term loans for consolidation with Australian Lending Centre.

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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.

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Debt Consolidation

What is the Best Way to Consolidate Debt?

debt consolidation

The best way to consolidate debt depends on your needs and financial situation. Here are ways to consolidate your debt to ease your financial burden and build your credit score.

Types of debt consolidation

There are two ways to consolidate debt; through a debt consolidation loan or debt settlement consolidation.

Debt Consolidation

The first type is a type of loan that pays all of your outstanding debts in full so your credit report would show a zero balance on those debts. Instead of multiple loans, you only have one loan. Consolidated loans typically reduce the interest rates and monthly payments but it has longer repayment period.

In debt consolidation, a single large loan is used to pay off several smaller loans. You no longer have to worry if you missed payments on several smaller debts because you only need to make a single regular payment for the new consolidated loan.

While debt consolidation can be a lifesaver, it can also result in bad debt if you don’t know how to manage it. That’s why it is important to look into the interest rate which must be lower than the previous smaller ones, to save money on your monthly payments.

Debt Settlement

Consolidation through a debt settlement means that you engage the services of a debt settlement firm that negotiates settlement with each of your creditor. While they are not offering consolidation loans, they can help you negotiate debts and settlement. Your debt will be settled when the creditor agrees to accept an amount which is lower than what you actually owed.
You may have to draw a check and pay it to the debt settlement firm that then distributes the payment amount to your creditors. You still have multiple loans. But, with proper distribution of payments, you no longer have to worry about creditors running after you.

When is debt consolidation appropriate?

Debt consolidation is for people who want to consolidate multiple accounts into one. They must be willing to pay lower total monthly payments, but a higher total amount of interest and at a longer time to repay all of the debt.  They must also consider closing paid off accounts to avoid the temptation of taking on even more debt and be caught up in the cycle of incurring new charges and getting debt help.

Debt consolidation is not for everyone. It is important to talk to our consultants to know about different options to manage your debts. Remember that debt consolidation is most effective when you are enrolled in our debt management program that will equip you with financial knowledge to avoid future debts. We shall help you create a better financial management strategy that will not only help you get out of debt but enable you to be financially independent.

Australian Lending Centre offers debt consolidation to manage your multiple loans in one easy repayment, with lower interests and it is available to everyone, whether you have good or bad credit. You can take control of your finances by consolidating high-interest loans such as credit cards, medical loans, store cards, cash advances, secured and unsecured debts and other loans.

Contact us today to discover the best way to consolidate debt and for a no-obligation consultation on your eligibility for debt consolidation and other loan options.

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Debt Management Financial Fitness Financial Planning

Cut Costs and Grow Your Savings

how to grow your savings

The world might be slowly coming out of a recession, however, many people are still struggling to make ends meet. This could be largely due to a lot of people being made redundant, and still looking for work or only working part-time due to fewer job opportunities.

If you fall into this or a similar category, and you find that you are struggling to make your repayments, read on for some helpful hints on cutting household costs.

Cut Costs – Build Savings

Phone Bills

An increasingly popular way to make phone calls nowadays is by using VoIP (Voice over Internet Protocol). It’s a way of making and receiving calls over the Internet and it can work out to be much cheaper than using a traditional Telco for your phone. For more information, take a look at Skype.

Bank fees

Making a phone call to your bank every six months to see if they can do anything to help you cut your bank fees is very worthwhile. Use the call as an opportunity to check that your money is in an account that generates the highest interest possible. Also check to see if your bank has a fee-free option.

Energy

We have heard its good for the environment, but don’t forget that by turning off electrical goods at the power point, or even your gas system when going on holidays, are good ways to cut down on utility bills. Also, look into what time is best to do a load of washing, or turn on the dishwasher, as it is on-peak and off-peak times throughout the day – this means the electricity to run your electric goods are charged at different rates depending on what time of day it is.

Food

Spend more time eating at home, rather than going out for meals, and take your lunch to work instead of purchasing food and coffee on a regular basis.

Debt Consolidation

Debt consolidation or ‘consolidation loans’ are perfect for those who need credit card consolidation, personal loan consolidation and even home loan consolidation, and they can drastically reduce the amount of interest you pay to service your debt.

Australian Lending Centre can offer you a range of debt consolidation options so that you can combine all your monthly outgoings into one lower affordable monthly payment.