It’s easy for debt to get out of control
It’s just so easy to let the credit card and other debt get out of control. And the longer this goes on, the higher the interest payments become. It’s a vicious cycle that can be difficult to break.
But once you do get it under control, the financial weight lifts and you can begin to enjoy life again.
Once of the most effective ways of getting your debt under control is to consolidate high interest credit card and loans, into a single lower interest loan. And by continuing to repay the same amount as you were previously, you can really cut into the loan balance.
How do the debt experts work?
Say you have three different credit cards with debts of, for example, $4,000, $5,000 and $7,500. You’ll likely also have three different interest rates and to be making three different repayments at different times each month.
This can feel overwhelming and complicate managing your cash flow. The interest rate on one card may be significantly higher than the others – and if the highest rate is on the card with the $7,500 debt, you could be paying plenty each month just to cover the interest, let alone paying down the debt itself.
Combining your debts means you have a single personal loan to pay off each credit card and any outstanding interest. With a personal loan you’ll have just one repayment to make every week, fortnight or month over a set term – you can usually choose your own frequency of repayments.
And if the interest rate on the personal loan is lower than your credit card rates – and they often can be – this can help you get ahead in reducing your overall debt.
Why would you combine?
To summarize, the key advantages of consolidating your debt are:
- A potentially better (lower) interest rate
- Repayments that are easier to manage
- A means of providing a clear timeline outlining when you’ll be debt-free
And you’ll feel better because you’ll have a roadmap to being debt-free.