Debt Consolidation Australia? Advice & Options To Afford To Live

Debt consolidation is done by taking all your debt like credit cards, personal loans and store cards and creating one debt only. This can be achieved in many ways.
Debt consolidation loans are extremely popular, particularly for those who have several credit cards or store cards as well as personal loans. Some credit card companies might be charging you 15% or more in interest per annum. If you could consolidate two or three of these high charging cards into one loan at say 8% per annum, your savings will be huge.

Another option is to use the equity in your property if you own one. If you have an existing mortgage loan, you could choose to increase it to repay your other debt. This is advantageous as the interest rate on your mortgage loan will normally be much lower than those on credit cards or unsecured personal loans. Hence, your monthly repayments will be reduced.

If you have the option of acquiring a mortgage loan at a reduced rate, you could use this facility to settle your existing mortgage as well as repay all your other debt. Refinancing your mortgage will give you the option to extend the repayment period which will effectively reduce your repayment amount for all your debt.

There are eligibility criteria that have to be met to qualify for a low-interest debt consolidation loan. You will not qualify if you have a bad credit record. If you have a history of late payments on your accounts, you will not qualify. Another reason for non-qualification would be if you have been declared bankrupt in the past ten years. To qualify, you should not be in default on any other loan repayments. And, the most important criterion is that you should be in regular employment. There are financial institutions that might consider giving you a debt consolidation loan even if you do not meet the criteria, but the interest rates will normally be much higher.

You could try to contact your creditors and negotiate with them regarding the repayment terms. You may be successful in getting an extended repayment time period. They may be willing to re-negotiate the loan amount by settling for a lesser amount. They might consider freezing the interest for a specified period.

If you find that you have extra funds available on a monthly basis because of the reduction in repayment values, it is advisable for you to pay that extra amount into your debt consolidation loan anyway. This will reduce your repayment period and you could save thousands in interest, and you could be debt-free sooner.

If you need help consolidating debt