Being in debt has almost become a way of life for many Australians. There wouldn’t be too many adults out there who don’t have some form of ongoing debt, whether it be paying back a loan or more commonly a credit card bill. Some people have other debts too, such as paying off a tax bill, or a payment plan for medical expenses. Even many young people can find themselves drowning in debt, repaying government loans for education or buying that new car.
It’s estimated that around two thirds of working Australian adults have debts that don’t include repaying a mortgage. That’s a very high percentage of the workforce. Other sources place the personal combined debt of Aussies at more than $2 trillion dollars.
With so much accrued debt, the average Australian working adult is becoming a slave to both their job and repaying those debts. This can really hamper a person’s lifestyle and basically take a lot of the fun out of everyday living.
Debts are not just going to magically disappear once they’ve been accrued, unfortunately. Therefore, they will need to be assessed and managed better, so finances can be freed up and those stress levels reduced.
One of the very best ways of achieving that goal is through debt consolidation.
What Is Debt Consolidation?
It’s the process of combining two or more debts into one single loan, enabling the individual more scope to better manage that debt. “Consolidate” means to bring several items together and debt consolidation does exactly that with two or more loans or credit card debts.
The Advantages of Debt Consolidation
The entire purpose of consolidating your debt is to put yourself in a more favourable position financially. How does debt consolidation achieve this?
There are actually a few advantages to consolidating debt. To start with, when you roll over two or more existing debts into one loan, you will only have the one loan repayment to think about each month. Instead of having to remember various repayments at different times of the month, you only have to remember the one loan repayment. That’s just one benefit. Let’s look at a couple more.
Another advantage of consolidating debt is to reduce the amount of interest you are paying overall on your debts. Let’s say you have 3 credit cards that average around 16% interest per month on the outstanding balance. If you consolidate that debt into a loan at say 13%, that’s going to be a major saving, both in the short term and long term. Credit card interest especially is a financial killer.
A third benefit is this. When your debts are consolidated into one simple debt, you can realistically reduce your total monthly repayment. As an example, you may currently be repaying a total of $700 per month on several or more debts, but debt consolidation could reduce this by hundreds per month.
Take Out a Loan To Consolidate Your Debt
The easiest and most effective way to consolidate two or more debts is to combine them into one single debt with a Debt Consolidation Loan.
With regards to Debt Consolidation Loans, Australia gives you quite a few options. Some lenders create loans specifically for debt consolidation, while others will offer a range of Personal Loans for you to choose from.
What you need to be mindful of are any associated fees and in particular, the interest rate being offered. Debt consolidation is only truly effective if the Debt Consolidation Loan offers a better deal than your original loans and debts.
Talk to your favourite lender about debt consolidation options, or shop around for a lender that’s offering the best deal on Debt Consolidation Loans or Personal Loans.
You Can Apply for Debt Consolidation Loans Online
What’s really great about the modern world is convenience. With the internet, you can apply for your Debt Consolidation Loan online. Most Aussie lenders will offer this option. In fact, you can likely do all of your debt consolidation research and apply for a loan without even having to leave your home.
It doesn’t get any easier or more convenient than that.
If you’re currently struggling with debt and can’t see a way out, consider consolidating your debt into a single Debt Consolidation Loan. You’ll be glad you did.