Debt Consolidation
Living with high levels of personal debt can be financially and emotionally draining. So it’s important to look at ways to get back on track with money management, regain control of your cash and become (and stay) debt-free.
Find a solution to reduce your debt
Part of the challenge of dealing with unmanageable debt is the need to make multiple repayments to a variety of different lenders. That’s where debt consolidation can help. It works by rolling a number of different debts into a single loan.
Your home loan is often a good choice for debt consolidation as it usually comes with the lowest rate of all types of credit. The downside is that you may be transferring a short term debt (like a credit card balance) into a long term loan (your home loan). Paying a bit more off your loan each month is a sensible step to minimise overall interest charges.
If you’re not a home owner, a personal loan can be a good choice to consolidate debt. The term is fixed so you have a clear end date, and the set repayments are easier to budget for.
Our Mortgage Choice Melbourne brokers can recommend the best strategy to consolidate debts for your situation and then action the strategy you have selected.
With your debt streamlined into a single loan, you can start to focus on making a single monthly payment, which can be far less stressful than juggling a number of repayments.
Saving on interest
By opting for a loan with a competitive rate, debt consolidation can also reduce the overall interest charges you pay. This can lower your regular repayments and provide extra cash to help pay off the new loan sooner.
In this way, the debt pendulum starts to swing in your favour, and you begin to take measurable strides towards becoming debt-free.
Understanding the bigger picture
While debt consolidation can provide an immediate strategy to help you gain control over debt, it doesn’t address the underlying problems, which usually involve weak spots in money management.
Refinancing to consolidate debt
Like many Australians you could have several debts – probably a home loan, a personal loan, and possibly even a credit card balance. Having multiple debts means juggling lots of different repayments.
This video outlines some of the benefits of refinancing to consolidate debt.
Book a 10 minute phone meeting with a consultant of your choice at a time that suits you or call our Mortgage Choice Melbourne office on 03 8602 6777!
If you would need further assistance with Cashflow Management, here's how we can help
Debt is easy to build up and hard to pay off, but with expert help it can be done.
Book a 10 minute phone meeting with a consultant of your choice at a time that suits you or call our Mortgage Choice Melbourne office on 03 8602 6777!
