Consolidating debt is something that is talked about more and more in financial circles these days. You see commercials on TV about it, accountants and financial advisors often talk about it and the subject may even come up around dinner table conversation from time to time.
Debt consolidation is something that’s becoming increasingly popular and for good reason. Consolidating two or more debts into one is a positive step to take to regain control of your finances and feel like you can breathe easy and live again. Having said that, before taking out a Debt Consolidation Loan, there are some things to consider and be mindful of.
How Does Debt Consolidation Manage Financial Risks and Improve Your Finances?
The more debts you have outstanding, the more risk there is of you getting into some sort of financial trouble. Let’s say you have multiple credit cards and have debt racked up on each card. Every month, you’ll need to come up with multiple minimum payments to make on those cards. If you have a bad month where money is tight, you may find you can’t make those repayments.
Too many debts accrue too much interest and the total repayment amounts can be crippling. Debt consolidation can relieve stress and pressure by lowering the overall interest rate and also lowering the overall amount you have to repay monthly. Once everything has been consolidated into one simple loan, you then only have to remember to make one repayment each month instead of multiple monthly payments.
Debt consolidation helps you manage your financial risk as well as putting you in a much more favourable position financially. You still repay the money you owe, but with a lower interest rate and more money in your pocket.
Always Look for a Good Deal Before Committing To a Debt Consolidation Loan
There are a few things to look for when trying to decide on which Debt Consolidation Loan or Personal Loan to apply for. Take some time to do a bit of research before making any decisions.
You’ll want to find a lender who is offering competitive interest rates and most importantly, an interest rate that is lower than the rates you are currently being charged on your existing debts that you want to consolidate.
Interest rates are not the only thing you want to take note of though. Does the lender charge any fees, such as a loan application fee or monthly account keeping fees? If so, how much are those fees and is the lender transparent about any associated fees attached to the loan?
You’ll want to choose a lender that offers you a good deal on instant short-term loans, as well as a company that is open and honest about any charges associated with the loan.
Steps To Taking Out a Debt Consolidation Loan
You’re probably wondering how to take out a debt consolidation loan in Australia. Well, the process is generally pretty simple these days, as you can do the application online. Just have all of your details ready to go and fill out the online form. Any documents required to accompany your application can generally be uploaded in electronic format as well, which means you won’t even have to leave the house to complete the entire application process.
Here are some basic criteria you’ll need to meet to qualify for a Debt Consolidation Loan:
- Currently have 2 or more outstanding debts to consolidate
- Be 18 years of age or older
- An Australian citizen or permanent resident
- Be able to prove your identity
- Have the means to repay the loan
Once you have completed your application, if and when it gets approved, you can either organise to have your lender pay out those existing debts, or you can do that yourself once you have the funds.
Before taking out a loan for debt consolidation, you might want to discuss your financial situation with your accountant or financial advisor to devise the best plan of action.
Talk To Us First About Debt Consolidation
If you find yourself drowning in debt that you are struggling to manage, get in touch with the experts at Cashify. We can assist you with debt consolidation at very competitive rates, so be sure to talk to us first.
Disclaimer: Please note this content is of general nature only and does not take into account your personal objectives, financial situations or needs. For advice tailored to your financial situation, it is advised that you seek guidance from an accountant or financial advisor. The information contained in this article is correct at the date of publication.