Debt consolidation is a form of refinancing that you can use to combine your debts. This helps you to pay off your debts quicker and makes the debts easier to handle. Find out how Get Out Of Debt Today can help you reduce your debts and help you budget with a debt consolidation solution.
What Is Debt Consolidation? | Reducing Debt In Sydney NSW
A debt consolidation can help you eliminate debt by making repayments easier
As mentioned above, debt consolidation is a way that you can refinance by taking out a new loan to pay off all your other debts. So you combine all your debts including credit card debt, overbalances, home loans and any other debts, into one easy payment. When you are dealing with a lot of creditors all wanting payment on different dates and each having a different interest rate it can make debt unbearable. That is where a debt consolidation loan comes in; combining all your debts into one easy monthly payment, often with less fees or a lower interest rate (or both), to pay off your debts.
Debt consolidation is only the start however, it is important to talk to a debt counsellor or debt consolidation company as they can help you plan and budget for your debt consolidation loan. The most important thing to remember is that you need to be able to meet the repayments of the debt consolidation loan otherwise you may need to explore other options.
Debt consolidation helps you to reduce debt as it allows for a bargaining chip with your creditors which is, the promise of upfront, lump sum payment of your debt in exchange for a reduce amount of debt to pay. It gives you some control over your finances again and you will have leverage to get a better deal with your creditors.
Make sure to negotiate with your creditors before you consolidate your debts through a mortgage refinance or personal loan as you want to make sure that your creditors agree to the deal before you take out another loan. A debt negotiator can talk you through what you need to know when consolidating your debts to get a reduced payment amount from your lenders.
How Can A Debt Councellor Help You Consolidate Your Debts In Sydney?
Get Out Of Debt Today offer debt counselling services that can help you get on top of your debts in Sydney
Many people choose this route as it helps them keep on top of their debt and manage their money better. It also makes it hard to fall deeper into debt as you have one payment. A debt councellor can help you with your debt consolidation in a number of ways. Debt councellors can negotiate with your creditors on your behalf to reduce your debt payment. This is done using the debt consolidation loan, with the promise of full upfront payment of the debt often appealing to creditors, especially if you are struggling to pay off your debts.
Once they have helped you secure a reduced amount of debt and you have consolidated your debts to get a lower interest rate, a debt councellor will then help plan a budget tailored to your needs to make sure you are able to pay off the debt. During the negotiation phase with your creditors, they may have also given you time to save to pay off your debts quicker. When you are struggling with your debts, creditors will often give you a break from paying off your debt with the promise of a lump sum payment. You can then use this for your monthly repayments or pay off a large chunk of your debts all at once. Talk to get out of debt today about getting expert debt counseling to help you reduce your debt and come up with a debt management plan tailored for you.
Debt counsellors can also help you in other ways. After preparing your budget they will help you stick to it, which is especially important when you hit an unexpected road bump on the way to clearing your debts. This can come in the form of medical emergencies or home repairs, but whatever the expense you are having to pay, a debt counsellor can help you stick to your budget after the fact and help you look at the bigger picture.
You can also find out about other debt options from a debt counsellor and with a free consultation available with Get Out Of Debt Today, there’s no reason not to get your options properly evaluated. We look at all your options, making sure to inform you of all your options and what they mean for your financial situation now and into the future. Call us today on (02) 9011 7919 and get all the facts you need to make an informed decision.
Debt Consolidation Loan And Mortgage Refinancing In Sydney Australia
What is the difference between a mortgage refinance and a debt consolidation loan in Sydney?
There are a number of options to consolidate your debts and one of the main ones it through a mortgage refinance. A mortgage refinance is when you switch your mortgage in order to either get a better interest rate, a better deal or often to access the equity in your home. You can also increase the amount of your home loan to pay off the rest of your debts, consolidating your debts into your mortgage. This is useful as your home loan will often have a much lower interest rate than your other debts, especially high interest credit card debts.
You can also take out an ordinary loan with your bank. This too will have a lower interest rate than your credit card and other debts and is good for when you don’t have a home loan. Combing debts through a debt consolidation loan is an easy and effective way to get all your debts together and start paying them off with lower fees and interest rates.
In both cases you need to remember that by putting all your debts together, there is the potential that the loan could end up costing you more if you don’t stick to your budget and pay it off as quickly as possible. When you don’t pay off your debt quickly, while you will still be paying a lower interest rate than you would have, you are also extending the amount of time you are paying the interest which is why it is important that you stick to any budget that your debt counsellor helps you create.
There are a number of other benefits for using a mortgage refinance. Using a mortgage refinance to access the equity in your home is a great way to pay off your debt. This is one easiest ways to secure a loan refinance, while you are paying off your mortgage the value of your home will usually increase and you can use this increase in value to pay off your debts through a mortgage refinance.
You can also use a mortgage refinance to move to a fixed interest rate. This is hugely beneficial if you are currently in a non-fixed home loan situation but the interest rate drops to a low figure. You can then use the refinance to fix your interest to the lower rate for the term of your loan. This could lead you to paying much less interest than you could have but can also have the opposite effect if the interest rate continues to drop. Talk to a financial specialist about trends and their prediction for future interest rate rises and falls to make an informed decision.
Why Should I Use A Debt Consolidation Loan In Sydney NSW?
A summary of the usefulness of consolidating your debts in Sydney Australia
There are a number of good reasons you should consolidate your debts. Some do require help from a debt councellor while others are benefits that are easily accessible by all.
All your debts will be in one easy monthly repayment.
Your interest repayment or fees (or both) will be lower across the board.
Having one easy to repay debt is a good way to improve your credit rating.
You can negotiate an extension on your debts with a debt councellor. This gives you time to save to pay off large sums of your debts.
You can negotiate a lower repayment with all your creditors with the promise of lump sum payments. This will also usually require the help of a debt councellor.
A debt councellor can also help you plan and budget your monthly repayment plan.
A debt consolidation loan is not a form of bankruptcy so your credit rating is not affected like if you entered into bankruptcy or a debt agreement.
By choosing to consolidate your debts and negotiate and informal agreement with your creditors, you avoid the long term negative effects other forms of debt reduction can cause. This includes the main forms of bankruptcy, part 9 debt agreements and insolvency agreements. Bankruptcy can have long term effects on your credit rating and work prospects.
Always consider bankruptcy as your last possible option and fully assess your other options. Declaring bankruptcy in Australia means your name stays on the National Personal Insolvency Index, leaving a black mark next to your credit rating. You also have to tell any potential business partners that you have been bankrupt which can seriously affect your business prospects. Find out more about the impacts of bankruptcy here.
Debt consolidation on the other hand is not a form of bankruptcy and hence cannot be used against you. You will be able to borrow in the future with no defaults or black marks against your name and no inclusion on the National Personal Insolvency Index. It is the freedom that these sorts of agreements provide that make them so popular to people looking to get out of debt. It is especially good when you are able to control your debt, talk to a debt counsellor about getting your debt under control today.
Is Debt Consolidation Right For Me?
There are a number of options available to you across Sydney that can be affective in combating debt
Avoid the main forms of bankruptcy and talk to an expert debt counsellor today about reducing your debt and protecting your credit rating. The negative impacts that a black mark against your credit rating can have long standing impacts on your life and seriously affect any future plans to borrow. While you might not be thinking of borrowing at the moment, your situation can change with opportunities appearing and the need to borrow. Having that blocked can leave you stuck in place and affect your ability to increase your capital.
Negotiating with your lenders and getting a deal on your debts is a better option as you keep your current credit rating. Using debt consolidation to get out of debt also give you much more freedom and means that your assets won’t be sold off if you can repay the amount like with bankruptcy.
Talk to Get Out Of Debt Today to find out the options available to you. Every person and every debt situation is different, which is why it’s important to choose the right way to reduce your debt or you could end up further in debt. We attempt to avoid all forms of bankruptcy including debt agreements to ensure you don’t get a default or black mark on your credit rating. We want to protect your credit rating, which is why we explore all other options to find the best one for you. You don’t have to enter bankruptcy in order to get out of debt, call us today on (02) 9011 7919 or fill out or form and we can contact you!