Consolidate Your Debts and Avoid Defaults
One of the fears of many Australians today is the possibility that they might fall behind on their monthly payments. Going into arrears is something that they just don’t want to experience. There is the fear of creditors calling their phones, or even visiting them in their homes or places of work. There is the dread of having someone ask you to pay what you owe, when you know that you just don’t have enough to do so. If you want to take steps so that you don’t go into arrears, do some reading and research. One of the things that you will want to look into is how to consolidate your debts.
Most people have some idea of the process of how to consolidate your debts. The general idea behind it is that a lot of debts or loan payments are done away with, and brought into and paid for by one remaining debt. You’re generally left with one creditor, one interest rate and one monthly payment. This simplifies things, and for a lot of single professionals or other families or people in debt, this simplification can make all the difference.
If you have already found yourself in arrears, then you can consolidate your debts so that the past due accounts get paid off, and you are left with one obligation which is current and not in arrears. So this process allows you to get back on even footing. Another thing to consider is that the process of debt consolidation could result in you having to pay a lesser amount each month. Just think about the high interest rates and penalties associated with credit cards. Consider all the additional late fees and other penalties that companies impose if you fall behind on your personal loans, business debts, mortgage or other obligations. Those rates can reach almost dizzying heights over time, and the amount that you have to pay can truly balloon compared to the original amount involved.
However, if you consolidate your debt, you can undo these high rates and fees, and replace them with a much more modest rate and amount. This can save you money as well as greatly reduce your stress level. Also keep in mind that if you bring in professionals to assist with your debt consolidation, they can provide some much-needed guidance. They have experience and expertise when it comes to analysing a person’s true financial position, crafting an appropriate budget and finding ways to stick with it, and more.