Who needs debt consolidation
When you have multiple debts, it can be stressful trying to keep them all under control, and can put pressure on your family and other areas of life. Many of us have personal loans, car loans and credit cards which we pay off each month, often to different financial institutions. This means you could be paying more than you need to be.
Anyone who is looking to have all their debt in one place and potentially reduce their interest rate and monthly repayments, could benefit from debt consolidation.
Why would you consolidate?
- Consolidating could potentially give you lower monthly/fortnightly/weekly repayments as well as a lower interest rate.
- Having all your repayments rolled into one will allow for better management of your debt.
- With only one monthly repayment being made, you’ll be able to keep track of the amounts coming from your account and have a clearer vision of where your financial future is heading.
Typically, debt consolidation is done by amalgamating all debt into a single personal loan with one payment and one interest rate, making it more affordable and easier to keep track of.
Like with most credit, an application will need to be put through for debt consolidation so it helps to have a good credit rating to maximise the chance of approval. If credit cards are part of the consolidation, it may be beneficial to close the accounts to prevent further costs.
Overall, debt consolidation can be the solution to put you in a better financial position. If you’re thinking of consolidating your debts but would like to speak to someone first, consulting with one of our advisers can help you make an informed decision.