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Debt Consolidation Financial Fitness Financial Planning

Debt Consolidation vs Creating Your Own Repayment Plan

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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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Financial Fitness

Asking for Payment to Recover Your Money

money management tips

Regardless of the person who owes you money, whether it’s a friend, a family member, or your employer, if you’re reading this article, you must know that nothing is more disturbing than trying to recover your money without success. As the holiday season is already upon us, certainly you could use some extra cash to buy some presents for your dear ones, right? So, it is time you pluck up your courage and do something to obtain your payment. The following tips might come in handy in aiding you to accomplish that.

Asking Payment

#1 – Ask for your payment

While you might assume that asking for your money is pretty obvious, sometimes, asking is all it takes to obtain payment. Some people are actually forgetful, and they might have forgotten that they owe you money.

If you wish to speed up receiving payment from your employer, you could consider sending an invoice using software specially created for this purpose. This will make your message appear more professional, compared to a regular text from the phone. Also, remember to be polite and friendly. Research points that a friendly attitude and a message accompanied by a simple “thank you” can increase the chances of getting payment by 5 percent.

#2 – Make it effortless to pay

A lot of people might try to get out of paying you by constantly saying things such as “I don’t have cash on me now” or “I don’t have your bank account details”. It’s time you send the people that owe you money your bank account details or consider setting up PayPal. Make it effortless for people to give your money back.

#3 – Demand penalties

Now, if you provide services as a freelancer, there’s nothing more annoying than not getting paid. In this situation, a suggestion might be demanding penalties for payments made late. You should consider this as a clause in your agreement, as you cannot keep on asking for your money after providing a service. Another tip might be growing the fees to your services by five percent, and for those who make the payment on time, you could offer a five percent discount. Sneaky but it could work!

#4 – Don’t give up

Believe it or not, a lot of people are unwilling to pay, and if you give up easily on your payment, you are the only one who ends up losing. That’s because, due to common sense, a lot of people don’t want to cause unnecessary drama, and this is why there are so many individuals who keep on avoiding making payments. It’s important that you have a face to face discussion with the person in order to clarify the situation. The bottom line is that you shouldn’t give up. After all, it’s your money. Good luck!