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Debt Consolidation Advice from the Experts

Are you looking for Debt Consolidation Advice? Consolidating your debts can be a good way to take back control of your finances, if it’s done correctly. There is a lot of information out there about the best way to get out of debt, ways to consolidate and things you should avoid. Here, our experts share their best debt consolidation advise to help you make an informed decision.

No two cases of debt are the same, so what has worked for someone else, might not work for you. There are many debt releif solutions avaialable to people in debt. Each solution will work better in some circumstances than others so it is important for you to do your research and find the right solution for your situation. Debt Rescue offers honest, balanced and accurate advice on a range of debt relief solutions. This article will offer debt consolidation advice from our team of experts.

What is Debt Consolidation?

Debt Consolidation is the act of rolling several debt repayments into one, often reducing the interest and fees you pay on the loan and improving your cash flow. You can consolidate your debts in many different ways depending on the debts you owe. Debt Consolidation is one of the best known debt relief solutions in Australia, and can work to improve your cash flow, reduce the interest and fees you pay on your loan and create one easy to manage repayment.

Types of Debt Consolidation

There are many ways you can consolidate your debt.

Mortgage Refinancing.

The most common way to consolidate large debts is to use the equity in your mortgage to refinance your loan to include your unmanageable debts. Often, your home loan interest rate will be much lower than that of your personal loans or credit cards so by drawing on the equity of your home, you can save money through a reduced interest rate.

Credit Card Debt Consolidation

If you have a number of credit cards all owing money, you might want to consolidate your debt into a single repayment. you can do this by transferring the balance of your credit card/s onto a new card with a very low or no interest rate introductory period. This allows you to repay your debt, without paying interest giving you time to catch up with your repayments. There are usually limits to how much you can transfer onto a no-interest balance transfer card so make sure you do your research before applying.

Debt Consolidation Loan

If you don’t have a mortgage and you would still like to consolidate your personal loans and credit cards, you can look into a Debt COnsolidation loan. this is a loan large enough to pay out your existing debts. You are then left with a single loan, a single repayment and only one set of interest and fees to pay.

The benefits of Debt Consolidation

If it is done correctly, Debt Consolidation has many benefits including:

  • Reduced interest
  • Reduced fees
  • Manageable repayment structure
  • Improved cashflow
  • Fewer creditors
  • Reduced stress
  • Less chance of defaulting on your repayments

However to enjoy these benefits, you must ensure Debt Consolidation is the most appropriate debt relief solution for your situation. Do you have defaults on your credit file? Do your debts have early breakage fees? There are some things you need to consider before you decide on debt consolidation.

The downfalls of debt consolidation

Like most things in life, what’s good for some, isn’t good for others and Debt Consolidation can have it’s downfalls. Here is some debt consolidation advice to consider.

  • If you have a bad credit rating through missed repayments consolidating your debt can be incredibly difficult
  • Some debts have early breakage fees, making it costly to consolidate them into a new loan
  • There can be limits to how much of your debt can be consolidated
  • The savings made through Debt Consolidation might not be enough to help you out of your financial hardship

When to consider debt Consolidation as a way out of debt

The debt consolidation advice from our experts is to act quickly. Debt Consolidation is best used as a debt relief solution in the early stages of financial hardship. To get the best deal on a consolidation loan or refinancing, it is ideal to have a clean credit record, free of defaults or judgements. If you have been missing your debt repayments it is likely you will have marks against your name and your credit rating is jeopardised.

Debt Consolidation can provide a lot of relief to people struggling with their debts so it is unfortunate it is not easily accessible for those who might need it most. However there are other debt relief solutions you can try if Debt Consolidation doesn’t sound like it is available to you.

Debt Consolidation Alternatives to consider

If Debt Consolidation doesn’t quite fit your situation, don’t worry. All hope is not lost and there are still options available to you to get out of debt.

Debtstroyer Agreements

If you have fallen into debt through financial hardship, Debtstroyer may be able to help you pay your way out. Debtstroyer is an informal debt agreement which is negotiated privately with your creditors. It could be a lump sum payment or a long term payment arrangement for you to pay off your debt at a reduced rate – one which you can afford. As it is all done privately with professional debt negotiators, it operates outside the restrictions of personal bankruptcy and won’t further impact your credit file like bankruptcy does.

Part 9 Debt Agreement

A part 9 Debt Agreement is a government regulated agreement between you and your creditors outlining a new affordable payment arrangement. A Debt Agreement will freeze your interest, reduce your overall debt amount and get the creditors off your back. Entering a Debt Agreement is considered an act of bankruptcy, however it doesn’t have the lasting consequences like bankruptcy does. A note is marked on your credit file and your name is listed on the NPII during the term of the agreement which is usually 5 years. Once your Debt Agreement is over your name is removed from the NPII and your credit file will be adjusted to show you have been discharged from your agreement.

Budgeting

No matter which debt relief solution you decide to use, you should always include a budget as part of your long term debt recovery solution. A budget wll help you develop long term money management skills which are essential for staying out of debt into the future. The professionals at Debt Rescue can offer you budgeting advice as well as debt consolidation advice and guide you on ways to improve your budgeting abilities.

For more Information

For more debt consolidation advice and information call Debt Rescue today on 1800 00 3328. You can have an obligation free chat with our expert case managers about your debt situation and they will advise you on the best course of action based on your situation. No two cases of debt are the same and there is no one size fits all solution. We take the time to listen to you and understand your needs and lifestyle before suggesting a debt relief solution.