During the Christmas period, it is easy to spend money and also rack up debt through credit cards and interest free deals. Now that Christmas is over, it may be a good time to look at your debts and implement a plan of attack.
Below we look at 5 simple tips that may assist you with reducing that debt and start building your savings
1. Create a budget
The first step is to realise what debts you actually have. Gather statements and information regarding your debts and prioritise these based on interest rates, amounts and when the payments are due.
Then look at your income and work out a budget to pay down your debts and to stop spending money you do not have.
2. Consolidate credit cards and personal loans
If you have racked up a large amount of credit card debt over the festive season, it may be a good time to consolidate these debts into your home loan. As credit cards generally have a higher interest rate than your home loan, this can assist in reducing the amount of monthly interest you are paying on these debts. This then allows only one manageable debt with a single repayment and can also be effective for personal loans that attract a higher interest rate than that of your home loan.
3. Transfer credit card balances
There are plenty of banks competing for your credit card business, some offering an introductory rate of 0% interest on balance transfers. This allows you to pay off your credit card debt quicker as there are no interest charges for a period of time.
4. Check your home loan's health
Like the current credit card competition, lenders are also keen to attract new home loan business, offering some great interest rates and refinance incentives. You may find that switching lenders can help you pay off your home loan sooner or free up some cash to help you pay down your other debts.
5. Compare to find a better deal
If you are interested in comparing the many home loan deals that are in the market, it is best to speak to your local mortgage broker. You may find there is a better deal that is more suited to your needs with a lower interest rate and/or features.
If you are looking to consolidate your debts or would like to compare your current home loan, please call Ashley on 0425 826 967 or 9432-2121