If you find yourself with a range of debts that you're having difficulty paying off, you may consider the option of debt consolidation. Whether you choose a personal loan with favourable interest rates or a specific debt consolidation loan, making one payment each month can be much easier than making multiple payments. There are also companies that deal with debt consolidation, that can find the best debt solution for you.
If you don't know what you're looking for yet, read our Beginners Guide to Debt & Debt Relief here in our Tips & Guides section.
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|Rates shown are minimum for a 5 year fixed rate personal loan over $20,000. There is a monthly fee of $13.|
|from 10.99%p.a||from 10.99%p.a||$69||0||Apply NowMore Info+ Shortlist|
|For a limited time with Citibank Ready Credit pay only 10.99% p.a. for 3 years, no annual fees and a low establishment fee of $69.|
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** This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
If you have too many debts and you are finding it difficult to pay them off, then debt consolidation is an option that could help. Whether you have a collection of credit cards running up interest, or you have store cards that that can't make payments on, or you have loans that you can't manage, finding out more about debt consolidation could help.
Debt consolidation can come in the form of a debt consolidation loan, a general personal loan, or a line of credit. Having multiple debts means multiple payment dates and multiple interest rates. It can be difficult to keep track. You may miss a payment because you didn't realise it was due, leading to fees and charges. Or you may not be able to make the payment because you have not been able to budget properly.
Consolidating all your debts into one means one monthly payment and one rate of interest. You will know exactly what you are paying and when, and it can make budgeting your finances much easier. If you choose a personal loan or debt consolidation loan, you will also know exactly how long it will take to pay off your debt. You will have set repayments with set interest over a set period of time.
A line of credit is also an option when it comes to debt consolidation. This type of loan allows you to transfer all your debts into one place. As long as you keep making payments on time, your line of credit will remain open. You may also be able to take advantage of introductory interest free offers on balance transfers.
If you are in trouble with your finances, you may want to speak to a financial expert. It could help to talk about your problems with a professional who is trained to advise you of all your options. Take some time to find out what is on offer, and find out if debt consolidation is the right choice for you.
If you are checking out debt consolidation options, there are some things you should think about.
Loan or Line of Credit:
See what's on offer, read the terms and conditions and find out which option is right for you. If you only have credit card debt, you could also consider transferring your debts onto a balance transfer credit card, but only if you think you can pay off the debt within the allotted timeframe.
Find out how much you will be paying back in interest. Try to find the option that will allow you to pay the least amount of interest, as this will usually mean you can pay off your debts quicker.
Think seriously about how much you can afford to pay back each month. Don't stretch yourself so much that you won't be able to pay off your new loan, but make sure you are paying off enough to allow you to pay back the debt as quickly as possible.
Speak to a Professional:
If you get really snowed under with debt, seek advice as soon as you can. The further you sink into debt, the harder it will be to get out.