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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

Are You Falling for these Debt Consolidation Traps?

debt consolidation loan

Do you feel burdened by several credit card debts and other outstanding loans and you think debt consolidation could provide some serious relief? Debt consolidation is a new loan that allows you to pay off your multiple balances in one monthly payment. It doesn’t erase all your debts but simply makes it easier for you to repay. So, if you want to have a clean slate for keeps, make sure that you don’t fall into these debt consolidation traps:

Ignoring the cause of your debt problems.

Debt consolidation helps people manage the repercussions of bad debts. But it is just a temporary solution to your problem. Addressing the root cause of your debts, such as your lifestyle, money-management issues and other related things can help you analyze why you sunk in debt and how you can get out of it.

It is important to ask yourself, “What got me into a pile of debt?” Remember that it takes a while before debts become unmanageable. It is almost impossible to come up with a quick solution to internal debt issues when you fail to see where and how it started.

Debts did not grow overnight so unless you come up with a concrete idea with what got you into a financial mess, the same situation is likely to repeat itself.

Australian Lending Centre has in-house professionals to help you in retracing your financial actions. We can help you with our debt management plan and debt consolidation loans to deal with your present debts as we help you identify your spending habits.

Perhaps you were taking high-interest loans without knowing it or you are not paying your loans right. In other cases, the problem could be as simple as forgetting the due dates or the existence of debts itself.

Not making a proactive effort in searching for the best consolidation loan.

Here are some factors that you need to consider when choosing a loan consolidation program:

    • all of your outstanding debts
    • interest rates
    • lenders’ willingness to negotiate a lower rate
    • consolidation options

Consolidating debts has its own implications. Some lenders offer rates and fees that creep up over time. Others will charge you hefty fees that may put your assets in line in exchange of deceiving interest rates.

Australian Lending Centre gives you different options to pay for your debts. If you want to pay a lump sum to settle all your debts for less than what you actually owe, we can help you do that. You can also talk to us about our debt management program and see whether or not it can work for you. A debt management plan usually involves making an agreement with your creditors to consolidate the full amount of your loans. The negotiation is successful if you get lower interest rates or longer repayment period.

Thinking that you are finally out of debt.

Debt consolidation is still a loan. While you no longer have to deal with angry collection calls and you are not pestered with high-interest credit card bills, you cannot go back to your old habits. One of the big debt consolidation traps is forgetting he your debt problems were caused in the first place. Avoid falling back to maxing out your credit cards once again. Don’t give in to the temptation of charging all of your credit cards with zero balances once again, especially if there is no urgent need to do so.

Bear in mind that you still have a substantial amount of outstanding debt. So, if you cannot close most of your credit cards leave them at home and put only your low-charging credit cards in your wallet for emergencies.

Call us today!

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Debt Management

5 Warning Signs of Out-of-Control Debts

personal loans for bad credit

The first sign of a financial problem is the denial that you need to ask for debt help. We are about to help you learn the warning signs of out-of-control debts so you can take back financial control.

A person is most likely to ask for help upon reaching the rock bottom when the only logical way out is bankruptcy. Before you sink deeper into debt, here are some questions you can ask yourself to know if you are in serious need of debt help.

Am I spending over my credit limit?

If you have maxed-out your credit card you can see an “over-limit” added to your next monthly statement. Though not all cards charge these fees because some card issuers waive the penalty, exceeding your credit card limit is a sign of personal financial mismanagement. It can seriously hurt your credit score because credit utilization accounts for about thirty per cent of your credit score.

If you didn’t stay well within the limit available to you, it would alert the credit score company that you are having a hard time managing your finances. You have two options here, either you increase your credit limit or you take a look at your spending behaviour. If you are barely able to pay your bill each month, choosing option number two is a good idea.

Do I have multiple credit cards?

Some say that you can never have too many credit cards because you will end up using them. The truth is, having multiple credit cards can help you boost your credit score, and they may come in handy during emergencies. But if you have the habit of forgetting to make payments or you are tempted to spend beyond what you can actually afford to pay because of the available credits, it can hurt you. One of the biggest warning signs of out-of-control debts is mounting credit card debt.

Remember that the best way to fatten your wallet and get out of debt is to manage your current accounts and your available finances responsibly.

Am I using credit to pay for basic necessities?

If you are using credit for small purchases such as food, gas, rent and utilities not for convenience but necessity, it could be a sign that you need debt help. Not paying your monthly bills on time and charging your living expenses to your credit cards may push you deeper into debt. Talking to our debt management specialists can help you rearrange your budget so you can have money for your living expenses.

Do I constantly borrow money from relatives or friends?

If you always run to your family and friends during financial emergencies and you’re still short on cash despite loans and credit cards, it may be time to learn how to budget your money. You can start with a debt management plan to know how much you really need to pay off all your debts and the amount you need to live comfortably. While you can make a list of all your debts and do the math, getting the help of debt management would be a better idea, to know about debt consolidation options and other debt management strategies.

When do I ask for debt help? The answer would be now. The moment you start asking yourself that question, it means you are having troubles managing your finances.

At the Australian Lending Centre, we can offer you the best debt counselling service in Australia and help you explore options and make decisions regarding your personal finances and debt management problems. Contact us today to learn more about debt assistance, debt agreements and debt relief services.

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Debt Consolidation

How can I get out of debt fast?

Debt Consolidation

When the bills are coming in and piling up, the question on anybody’s mind will be “how can I get out of debt fast?” Compounding interest charges can be a nightmare and make the thought of ever getting out of debt seems like a dream. If you want to be able to plan for your future and avoid surprises then having a structured path out of debt is fastest and surest to get financial security.

Get Out Of Debt Fast

Whether it is mounting high interest credit card debt, multiple car loans or a mortgage, the mountain of loans that a household can build up can seem endless and there is always a new charge that needs to be put on the card. The sooner a household can be out from under then the sooner the family can make plans for the future. A large amount of debt can make it hard to find extra funds to take a vacation, buy a car, buy presents over the holidays or make repairs on the family car. Once one credit card fills up, it can be tempting to get another one and put crucial charges on the new line of credit. Interest rates on short term debt can be debilitating and the compounding interest from long term loans can seem impossible to ever pay off. Variable interest rates on long term loans also mean that as rates rise the payments will increase, making it harder to plan your future. A secure payment schedule is an important foundation to a household’s financial future and the fastest way to get out of debt fast.

Reduce debts quickly for your future

Getting out of debt fast is the only way to ensure that you have a financial future. Consolidating debt is a great solution for those households with multiple loans. Getting multiple loans all consolidated into one loan with one payment can make it easier to plan a future. Knowing what your payments will be each month can help you plan for household purchases and also plan for retirement.

Even those with bad credit from mounting debt have the ability to consolidate loans and get their payments down to a manageable rate. So if you find yourself asking “how can I get out of debt fast?” then it’s time to take action and get your loan payments consolidated down to one reasonable payment so you can finally plan for your future.