According to the latest household debt information from the Australian Bureau of Statistics, average debt for each household is now at $50,500. It is up to 34% higher compared to the household debt average on the preceding report. This clearly indicates that household debt across the country continues to rise.
It is sad to note that debt has now become a part of living. Needless to say, it contributes to daily stress in the lives of numerous Australians. It even affects overall health and happiness. To be able to fully understand rising household debt so that proper strategies could be employed to control it, there is a need to analyse the possible causes.
Unsettled Home Loans
Home loans have become a necessity for buying homes. Many homeowners are thankful for such loan products because they now get to acquire houses even if they do not have enough savings to make the purchase. Many households have overdone it. Some have taken home loans that they could not simply handle and maintain. Others have lost employment or have suffered from dwindling income along the way.
Typical households across the country now allocate a significant portion (or most) of their monthly budgets for home loan repayments. However, some necessities could not be set aside. Thus, they are forced to apply for and take more loans to make ends meet. In the end, many households fall into default or are penalised for delayed payments, getting them into more serious financial troubles.
Lack of Financial Discipline
Of course, many analysts cite lack of financial discipline for increasing household debt levels. Although many individuals would still be in denial, more people are expected to admit to their selves how they tend to spend irresponsibly and unnecessarily.
One indication of lack of financial discipline is the rising problem about credit cards. Many households get indebted to not just one but numerous credit card companies. It is becoming normal for many Australians to incur uncontrollable credit card debts until they reach a point when repaying all dues could not be possible. Worse, credit card debts keep on accumulating interest payments as they remain unpaid.
Household Debt Solution
With all these problems that lead to higher household debt, there are several solutions offered across the market. Among the most recommended are debt consolidation loans. Why take another loan to remedy problems about various loans? Through the years, debt consolidation has been proven to be an effective strategy to control, repay, and eliminate debts without much hassle.
Debt consolidation loans gather all your outstanding loans into one. These products usually offer lower interest rates, so you could save dollars in interest payments. You would not have to make multiple payment transactions each month and possibly miss out any payment due, which could incur additional charges and penalties. And lastly, it would be less stressful to deal with just one loan in the long run, which could take longer maturity and much lower monthly payment.