If you are struggling with multiple debt with different interest rates and want to get rid of that debt trap, you may want to try debt consolidation in Australia.
There are several ways to consolidate your debt and you need to choose the right one basing your decision on your debt amount, your current financial situation and you≥r credit history.
Debt consolidation allows you to combine your multiple smaller debts into one monthly repayment and re-negotiate charged or interest on your debts. With more affordable terms and fees, credit card consolidation helps you to reduce your monthly credit card repayments, save on interest and get out of debt as soon as possible. There are several ways of consolidating debt and you need to decide which credit card consolidation is right for you.
Applying For a Loan
Receiving a loan allows you to make one monthly payment instead of making multiple payments each month.
- Debt Consolidation Loan: You may try to find a lender who provides debt consolidation loans and pays off all of your debts. Then, you need to repay that amount to that lender in monthly installments with single interest.
- Personal Loan: If you meet the eligibility criteria, you can borrow money with a personal loan issued by a reputable lender and pay off your credit card balances and other debts with that amount.
- Home Equity Loan: You can borrow against your home’s equity and use that money to pay off your multiple debts. Since you reduce the risk for the lender by offering up your house as security, you will be charged lower interest rates. But if you do not want to lose your house, you should not default of payments.
- Retirement Account Loan: You may use your retirement funds to pay off your debts without a credit check.
Using Balance Transfer Credit Cards
Balance transfer credit cards allow you to move your balances from other credit card accounts to a new credit card which offers 0% APR on balances for a promotional period. If you achieve to pay off your balances before that introductory period ends, you can save on interest. But, when that certain amount of time ends, you will be charged that card’s regular interest. Also, late payments may cause you to lose the chance of paying no interest in the promotional APR time.