Debt Consolidation

Are you struggling to manage your debts? Between remembering multiple payment deadlines to managing high-interest rates, it can be a smart idea to consolidate your debts into a single loan. 

Australian household debt is on the rise, and Aussies have some of the highest levels of personal debt in the world. While this might slowly be becoming the norm, it doesn’t have to be your reality. 

In this guide, we’ll uncover the advantages of debt consolidation to determine if it’s a good fit for you. If you’re in debt, we’re here to help.


  • What Is Debt Consolidation?

    Debt consolidation is the process of taking all your debts and consolidating them into a single low-interest loan. Rather than having multiple monthly payments, debt consolidation gives you one manageable monthly payment to meet.

    If you have any high-interest debts like credit card debts, you can roll these into a single, lower-interest payment. This makes it much simpler to manage a single payment and interest rate so you can focus on your debt-payoff strategy.

  • Why You Should Consolidate Your Debt

    Having a single payment comes with a lot of advantages, namely, a lower interest rate. In general, a debt consolidation loan that has a longer repayment period will allow you to lower your monthly payments even more, though you’ll ultimately pay more over the life of the loan.

    You should consolidate your debt if you’re currently struggling to manage your credit card payments or you have loans with high-interest rates. However, consolidating your debt can be an unwise move if you’re not careful. Consolidating your debt is a good idea if the following apply to you:

    • Your total debt (not including your mortgage) is under 40% of your gross income. If this isn’t the case, you’ll likely need a more comprehensive option than a consolidation loan.
    • You have good credit. While there are debt consolidation options for those with poor credit ratings, you’ll need to be careful about higher interest rates and predatory fees.
    • You have a debt payoff plan. Without a plan in place, it’s easy to fall back into even more debt.

     

    If you’re not sure whether debt consolidation is the best option for you, talk to our professionals. At Debt Busters, we’re here to make sure you’re confident in your financial future.

  • How to Consolidate Your Debt Step-by-Step

    There are two main options when it comes to traditional debt consolidation: balance-transfer credit card or a consolidation loan. With a balance-transfer card, you transfer all of your debts into a low-interest credit card and pay the balance as quickly as possible, usually during the promotional period.

    The second option is a fixed-rate debt consolidation loan. Once you get the loan, you’ll use this money to pay off your debt. From there, you’ll pay back the loan through monthly payments. Here’s how to get started:

    1. Check your credit score. This will help you understand what you can afford and what interest rates will be available to you.
    2. Research balance-transfer and consolidation loans. It’s a good idea to shop around for the best rates and offers.
    3. Apply for your choice. Once you’ve decided, apply for a few options that seem like a good fit for you. Always read the fine print to make sure you’ve broken down all of the fees and payments.
    4. Submit any necessary documents. You might need to provide income information as well as your credit history.
    5. Make your decision. Once you’ve received your results, you can compare options to get the best deal.
    6. Pay your debts. It’s time to pay off your debts with either your balance-transfer card or your loan.
    7. Create a payment schedule. Finally, make a schedule for making your new payment on time.
  • Debt Consolidation Solutions in Australia

    A personal debt consolidation loan will:

    • Allow you to consolidate your debts and reduce your monthly payments overall.
    • Let you pay one payment for all your debts.

     

    Setup fees and termination fees can sometimes apply, so it’s important that you secure a lower interest rate when you consolidate to offset these costs.

    An alternative to traditional debt consolidation is mortgage refinancing:

    • Refinancing can help you consolidate your debt and reduce your total monthly repayment.
    • While mortgages generally attract a lower interest rate than credit cards and personal loans, paying off your consolidated debts will take longer (a mortgage is typically 25 – 30 years).
    • It’s important to remember that by extending your term, you might actually end up paying more in interest overall.

     

    If our loans for bad credit debt consolidation aren’t right for your needs, our other debt solutions such as informal payment arrangement or a debt agreement may be better for you. Alternatively, if you’re not too sure whether debt consolidation is the service you need, please get in touch with a member of our friendly team to discuss your overall financial situation today.

  • What’s the Difference Between Debt Consolidation and Debt Agreement?

    Both debt consolidation and debt agreements are financial strategies for getting out of personal debt, however, they work very differently. As we’ve established, debt consolidation reduces the number of creditors you owe, but it doesn’t reduce how much debt you owe. On the other hand, a debt agreement (also known as a Part 9 or Part IX) is a way to reduce the total amount of debt you owe.

    With a debt agreement, you’re not trying to replace your existing debt with a new loan or balance-transfer card. Instead, a registered debt agreement administrator such as Debt Busters will negotiate with your creditors to pay less than you currently owe.

  • Finding Freedom From Debt with Debt Consolidation

    If you’re in debt, we’re here to help. Whether you need to consolidate your credit cards, personal loans or school fees, our debt consolidation services can put your mind at ease. We will find the best way to consolidate your debts in a way that works for you.

    Are you ready for a brighter, debt-free future? Contact our money specialists today on 1300 368 322. We can help set you on the right path for your financial needs.

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Debt Busters is an Australian owned business which was founded in 2005 - since then we have been able to help thousands regain financial control.

Debt Busters prides itself on providing a dedicated Client Service Manager to work closer with you and provide a higher level of customised service about your situation.