How to Consolidate Debt and Regain Control of Your Finances
Are you looking to consolidate debt into one easy repayment? Debt Consolidation has many advantages for people who are struggling with their finances, these include:
- getting better deals and rates on your existing loans
- increasing your day-to-day cash flow
- making your debt more manageable
If you are starting to feel the sting from your everyday expenses or if you would just like to save money in the long term, you should consolidate your debt. Depending on your financial situation and the debts you owe, there are a number of ways to consolidate debt. Below are just a few examples of how to Consolidate Debt.
Consolidate Debt with Credit Cards
Credit card debt is one of the most prevalent debts in the country with Aussies working to pay off a combined $50 billion in credit card debt. If you rely on your credit card to make regular purchases, you will know how difficult it can be to pay down your credit card debt. You can fast-track your repayments in a few simple steps to consolidate the debt.
Step 1: Stop Using Your Cards
The first step to consolidate debt using credit cards is to stop using your card! There is no point in paying off your card if you are only going to charge more expenses to it. At the end of this process you will be able to use your own money and savings to buy things and pay bills so cut up your cards and throw them away.
Step 2: Consolidate Debt
Whether you have one credit card or four, in order to get anywhere in repaying your debt, you need to buy yourself some time through debt consolidation. Look around for a credit card offering an interest free period on all balance transfers. Then consolidate debt by transferring the balance of your cards to the no interest card. For the next six months (or for the duration of the interest free period) pay as much as you can off your card. All the money you pay at this time will go directly towards your debt, not accruing interest and fees. At the end of the interest free period, continue to pay as much as you can until the debt is gone.
Step 3: Have A Back Up Plan
Now you are living without credit card debt, you would have freed up some money for everyday expenses. Make sure you never need to rely on a credit card again by putting some money into a savings account. This way, the bank will pay you interest instead and you will always have an emergency fund to rely on instead of a credit card. If you do want to use your credit card for any reason, such as earning loyalty points, ensure you have enough money in your savings to pay off your purchase before the next bill to avoid falling into debt again.
Consolidate Debt with a Debt Consolidation Loan
If you have mortgage and personal loans under your belt, you might find it difficult to keep up with your repayments. Each loan has it’s own set of interest and fees and the repayments fall at different times. When you consolidate debt, you are essentially rolling all of your debt repayments into one with one set of fees and interest and one regular repayment. Debt consolidation makes repaying your debt more manageable and increases your cash flow through savings on interest and fees.
Step 1: Know What You Owe And Weigh Up Your Options
If you want to consolidate debt, you need to know exactly how much money you owe to which creditors. Have a good look at your loans and mortgage and get an idea of how long you have been repaying it, how much your repayments, interest and fees are, and how much you have remaining. While you are looking at your loan documents, read the fine print. While banks can no longer charge exit fees, some loans come with terms, conditions and penalties for paying out the balance before the agreed term. If you want to consolidate debt, make sure it is worth your time and your savings won’t be lost on paying penalties and fees.
Step 2: Find Debt Consolidation Loans
Now you will need to find a debt consolidation loan and borrow enough to pay out your existing debts. In the end, you will be left with one loan, one interest rate, one set of fees and one easy regular repayment. Through Positive Solutions Finance, we can help find the right debt consolidation loans for you. Positive Solutions Finance does not lend money itself, rather, it calls on a number of affiliate lending partners to help you find a great deal. Bad credit is not an issue for Positive Solutions Finance as it has relationships with several non-conforming lenders who believe in second chances.
Step 3: Apply and Implement the Loan
Once you have found the right loan to consolidate debt, you’ll need to follow the application process. If approved, your new lender will pay out all your existing debts from the loan and you will be left with nothing to pay off but your debt consolidation loan. Be sure you keep up with the repayments on your new loan to get the most from your effort to consolidate debt.
When Debt Consolidation Doesn’t Work
If you have tried to consolidate debt without any luck or your savings still aren’t doing enough to help get your finances under control, you might like to consider a different debt relief solution. Informal Debtstroyer Agreements are great for people who are struggling through financial hardship and don’t want their debt to impact their credit files. For more information on Debt Consolidation through Positive Solutions Finance or any other debt relief program, call Debt Rescue and Talk to an Aussies Who Cares on 1800 00 3328.