Managing your debts for financial freedom
If you have multiple debts with high interest, if you are struggling with repayments, or if you are stressed about the number of bills coming through your door each month, then debt consolidation could be for you.
With a solid financial planning strategy, you could convert your multiple debts into one manageable debt, reducing your interest rates and stress levels until you are debt-free. There are a number of routes to do this.
1. Personal loan
A personal loan can offer an excellent means of debt consolidation as payments are fixed and run for a fixed period of time. Getting approved for a loan and the interest rate you receive will depend on your credit rating, but there are a range of products on the market for a range of people and circumstances. Speaking to a financial expert can help you determine whether this method would reduce your overall monthly payments.
2. Debt consolidation loan
A debt consolidation loan does exactly what it says on the tin. They are offered by banks and credit unions and are specifically designed to combine your debts. Generally they will have lower interest rates, but you may be required to extend your current repayment period to keep up with your payments each month. This could have repercussions on the interest you’ll pay, so you should get advice to get the full picture.
3. Home equity loan
If you own your own property, you can apply for a home equity loan, which is taken out using equity in your home as collateral. Interest rates are generally lower than other kinds of loans, but remember that your home may be at risk if you do not keep up with repayments. You should get professional financial advice before considering this route.
4. Credit card balance transfer
If you do not wish to consolidate your debts through a loan, you might consider a credit card balance transfer. However this should be viewed with caution. This method of debt consolidation involves transferring your credit card balances onto a single credit card. You’ll be able to take advantage of credit card deals that offer low balance transfer interest rates, lowering your overall payments. Usually these rates expire after an initial period, so you ensure that you’re aware of this deadline.
Consolidate your debts with expert advice
If you are considering consolidating your debts, the key to a successful strategy is advice with a finance professional. Without it, you could end up with high interest payments, long loan repayment terms, or even more debt than you began with.
At Reventon, we are trained to guide you through the process, providing personalised advice to ensure you become debt free and reach you financial goals.
If your debt is troubling you, don’t ignore it – book a free consultation for expert advice today.