Debt consolidation strategy
Debt consolidation is a good strategy to minimise interest payments and better manage your debts as they’re all in one place. With one simple monthly payment, you can reduce your stress and better plan for your financial future.
Consolidating multiple debts into a single loan can offer a number of benefits
One loan can be a lot easier to manage and more convenient – you only need to make a single monthly repayment. There’s less paperwork and you only have to deal with one lender.
Home loan consolidation
The interest rate on a home loan is usually lower than the rate you’ll pay on other debt, so using your mortgage or debt consolidation could mean a big reduction in your overall monthly repayments.
Personal loan consolidation
A personal loan can be useful for consolidating high interest debts such as credit card balances or expensive car loans. As well as a potential lower interest rate, the fixed monthly repayments of a personal loan make payments easier to budget for. The set term also gives you a definite date for the loan to be paid off.
Reducing credit card debt
The biggest benefit of debt consolidation is the cash savings, especially when it comes to credit cards. Take into account that some credit cards are charging over 20% with many having an annual fee of over $100, the costs really add up. In fact, according to the Reserve Bank, Australians are paying interest on around $32 billion of debt. At average credit card interest rates, that equates to millions of dollars per day in interest charges!
By consolidating your debt into a loan charging a lower interest rate, you can potentially enjoy big savings on the monthly repayments and cut hundreds – even thousands of dollars from your overall interest bill.
By reducing your interest rate and monthly repayments, debt consolidation could help you become debt free faster.