Do you have a problem managing your debts? Are you struggling with a range of debts such as credit cards, personal loans, car loans, store loans? Wouldn’t it be handy to roll all your loans together into a single repayment ? Have you thought of debt consolidation? Debt consolidation enables you to combine two or more loans into a single repayment.
What are the advantages of debt consolidation?
Having all of your debts and credit cards rolled into one big debt can be an attractive option especially when one considers the savings that can be realised:
- Save money by reducing the amount of interest you pay
- Reduce repayment periods
- Improve personal cash flow
- One easy to manage repayment
What should you consider before choosing debt consolidation?
- Match debt consolidation with a change in behaviour:
Debt consolidation may provide significant relief. However, it is not going to magically solve your financial problems. As new debts arise the likelihood of defaulting on these payments increases.
- Know the risks of debt consolidation:
Debt consolidation can bring you substantial benefits but can affect your credit score. Your smaller debts and credit cards will have built up a certain amount of credibility. When all of your smaller accounts and credit cards are closed in favour of a debt consolidation loan, your credit history is shortened thereby reducing your credit score. Also, having additional credit enquiries on your credit file reduces your credit score; try to minimise the number of attempts you make to consolidate.
Whilst it’s important to understand the risks involved with debt consolidation, depending on your personal circumstances, consolidating your credit cards and other debts into one repayment may provide significant benefits in terms of savings and reducing the repayment term. lifeafterdebt.com.au can assist you by providing an independent assessment of your financial position to determine whether debt consolidation is right for you.
Contact us now on 1300 237 669 or enquire online for a Free Financial Assessment.