Description: Know how debt consolidation works in Australia and how it can help you get out of debt.
Is your debt going out of control? Are you facing difficulties to keep up with your payments and getting disturbing calls from your creditors? There is good news for you. You can replace your multiple loans and debts through a single loan with debt consolidation. Currently, debt consolidation and debt settlement or debt relief businesses are thriving in Australia since more and more people are resorting to these services.
Debt consolidation companies in Australia are helping out people who are struggling with personal loan debt, credit card debt and other types of unsecured consumer debt.
What is debt consolidation?
Debt consolidation is the process of substituting multiple debts like store cards, credit cards and unsecured personal loans through only one loan. Though this loan might be bigger than multiple individual loans, there are typically a lot of benefits that you can get from consolidation. Given below are some of the common benefits of consolidation:
Managing only a single creditor
A single loan with a single monthly payment
Reduced interest rate
Reduced monthly repayments
Freedom from debt
No need to file bankruptcy
Simpler management of finances
Saving money
Types of debt consolidation loans
Consolidation loans can either be secured or unsecured. For getting a secured loan, you have to put forward some security for the loan and hence enjoy a lower interest rate. If you’re a homeowner and you have some equity in your home, you can combine all your outstanding debts into your mortgage. The interest rate you would need to pay for your unsecured debts is the interest rate of your home loan. This is undoubtedly the most useful type of debt consolidation. A number of lenders might acknowledge a car as security for a consolidation loan.
For getting an unsecured consolidation loan, you don’t have to provide any security. All your high-interest unsecured debts are rolled into one personal loan with a low interest rate. Savings is not so important here. When you take on an unsecured loan to consolidate your debts, you have to make sure that you don’t acquire further debt.
Alternative to consolidation
If you feel consolidation is not right for you, you can go for a debt agreement. This is kind of a debt settlement or negotiation with your creditors where your debt is reduced. Creditors can’t seize your property to recover their money.
Falling into debt is easy. Being able to manage debt is hard. If your debts have gone beyond control, then consolidation can help you control your debts in a simple way.
