How To Lower Credit Card Debt

Avoiding credit card debt in the first place is always your best bet. However, staying on top of credit card debt can be complicated. High-interest rates can make it feel like no matter how much you pay down, the debt doesn’t change or continues to grow. Knowing how to lower credit card debt can save you money in the long run. There are some steps you can take that will help get you back on track.

1. Pay On Time

While this might seem common sense, it can be easy to miss a payment. Even if it is just by a few days, missing a payment can incur a penalty fee. Repeated missed or late payments also are registered on your credit history. 

A good way to stay on top of repayments is to follow two easy steps:

• Set a reminder in your calendar.
• Set a direct debit to your credit card for the minimum repayment each month. 

Following these steps can help keep your credit file healthy.

2. Pay More Than The Minimum Amount

It can feel like you’ll never get on top of your credit card debt when only paying the minimum amount. With interest adding to the balance over time, it’s a debt that continues to grow. What many credit card holders don’t consider is paying more than the minimum amount. 

There’s no rule stating that repayments are an all or nothing affair. Just because you are unable to pay the balance in full, doesn’t mean you have to only stick the minimum repayment schedule. Even $20 extra here and there can help – it all builds up against the debt and helps bring down the accruing interest. 

Creating a budget can help you work out what you can afford to pay each month, over and above minimum repayments. 

If you only ever pay the minimum amount you’ll never get on top of your debt and you’ll pay a lot of unnecessary interest. 

3. Reduce Your Credit Limit

One of the most effective ways to keep your debt down is to reduce how much you can spend in the first place. When you remove the ability to spend as much, the temptation is gone. There is many ways you can reduce your credit limit:

• Online via online banking
• In-person at your banking institution
• By phone

Most of the time the reduction will be almost immediate. Occasionally it can take a couple of days to take effect. Be sure that any direct debits you set up will not bounce once you lower your card limit.

4. Limit Your Number Of Credit Cards

Even one credit card can get out of hand. Juggling multiple cards with high, unpaid balances is best avoided. If you’re planning to cancel one or more credit card accounts, there are two ways to approach this:

1. Pay off the card with the lowest balance first. This makes it more achievable in the short term which motivates you to continue. 
2. Pay off the card with the highest interest rate and fees first and then focus on the rest. 

The second option is the most favourable as it saves you more in the longer term. However, if you’re struggling to stay motivated and feel that you are not making progress, option one may help. Often knowing how to lower credit card debt is about understanding how to keep yourself focused and on track.

5. Seek Out A Better Deal 

Whether you have multiple cards or just one with a very high balance owing, a balance transfer is worth looking into. 

What Is A Balance Transfer? A balance transfer works by taking your existing debt/s and rolling it on to a different credit card. The incentive to do this is usually in the form of a 0% interest rate for a period of time. If you can manage to pay the debt down during this interest-free period, you can save yourself a lot of money.  Balance transfers should be treated with caution however as they can come with strict conditions. If you are unable to pay the debt down in the specified time, a higher interest rate than your previous credit card may apply.

If you have a number of cards and are looking at how to lower credit card debt, then Debt Consolidation is also a great option. By consolidating all your debts into one, you can not only simplify life but also save money. You can benefit from:

• Lower / frozen interest rates
• Only 1 repayment schedule
• Only 1 lender to make repayments to
• No more harassing calls
• New, flexible terms

Take Control Of Your Debt

If your credit card debt feels insurmountable and you need help finding solutions, Debt Consolidation Australia can help. Credit card debt can build up very quickly. Don’t let it cause you unnecessary stress and worry. Our expert consultants can walk you through how to lower credit card debt and start living within your means again.

What Is A Good Loan Interest Rate?

What constitutes a good interest rate is dependent on a number of factors such as:

• The type of loan you have or are applying for: for instance, personal loans often have higher interest rates than a mortgage, but lower than a credit card.
• Your credit history: if you have a poor credit history the interest rate offered may be higher to offset the risk you represent to the lender.
• The current market conditions and cash rate set by the Reserve Bank.

These elements all combine to determine the final rate. So the answer to ‘what is a good loan interest rate?’ is relative to your circumstance.

Types Of Loans And Their Interest Rates

There are many types of loans, the top four most people encounter are:

Personal Loans:

Ideal for those needing funds to buy big-ticket items for the home, going on holidays, buying a car, paying off debts etc. There are two types of personal loans, secured and unsecured:

Secured Personal Loans: When you use an asset such as a house or car for security against the debt. If you are unable to repay the debt, the lender will potentially sell the asset to recoup their loss.

Unsecured Personal Loans: These require no security, but they usually come with a higher rate of interest as a result. This helps to offset the risk to the lender. According to research done in 2016, ‘personal loan interest rates ranged from a low of 6.28% to a high of 22.99% for an unsecured personal loan, and a low of 4.53% to a high of 19.49% for a secured personal loan.

Business Loans:

Similar to personal loans these can be secured or unsecured. With secured starting at around 5% interest and unsecured from 12%. The rate will often be determined based around high risk your business is and the lease term of your proposed premises.

Payday Loans:

A payday or ‘small amount’ loan can be useful if you need access to funds quickly in the short term. There are usually limitations on how much you can borrow and they require minimal checks for approval.

These loans tend to be capped at a maximum of $2000 and give you anywhere between 16 days and 12 months to pay it back. They attract high fees and interest, meaning that by the time you pay it back, you have often paid almost double what you borrowed. Interest rates can be anywhere from 9-22%

Mortgage/Home Loans:

The biggest loan you are likely to ever undertake, a home loan or mortgage interest rate can vary a lot. Banks often have higher interest whereas alternate lenders may be able to negotiate a lower rate. Your rate will also be impacted by whether you choose to pay interest and principal, interest only and whether you opt for a fixed or variable term. At their lowest, home loan rates can be under 2% at their highest, over 5%.

Homeloan Rate Terms:

Baseline interest rates for home loans fluctuate. When you undertake a loan, you will have the option to choose a fixed or variable rate. What is a good loan interest rate term for you may depend on your situation at the time.

Fixed: a fixed rate refers to the interest rate remaining the same for a set period regardless of market conditions. This can have both pros and cons. Should the rates suddenly skyrocket, you are protected, should they plummet – you are stuck at the higher rate.

Variable: A variable-rate means you will experience fluctuations in your loans interest rate. This doesn’t offer as much stability as a fixed rate and could increase at any time. Conversely, it does mean you’ll reap the benefits of any sudden drops.

How To Secure A Low-Interest Rate

Even if interest rates are at an all-time low, your personal circumstances still have a huge part to play in the rate you are offered. So what is a good loan interest rate for you? It depends – ultimately your best bet of securing a great rate is to have a healthy credit score. Your credit score offers insight into your financial habits and your reliability as a borrower.

Ensure You’re Eligible For A Great Interest Rate

Are you consistently being offered high-interest rates? Or unable to negotiate lower rates due to mounting debts and a poor credit score, Debt Consolidation Australia can help. We specialise in consolidating and reducing your debts to get your finances back on track. Call today on 1300 795 775 and gain the power to negotiate for better interest rates.

What Is Debt Negotiation?

Debt negotiation, as the name suggests is when you attempt to negotiate the terms of your debt with your creditors. There are many potential benefits to doing this such as:

• Stopping further damage to your credit score from missed or late payments.
• Helping you avoid bankruptcy.
• Avoiding debt collectors. 
• A possible reduction in the interest rate or payment amounts.
• A possible reduction in the amount owing in exchange for a one-off, lump-sum payment. 
• The ability to save while still paying down your debt due to a reduction in interest/payments. 
• Improvement of your quality of life, reducing stress and anxiety. 

When Should You Negotiate Your Debt?

Given so many of us live with debt, and struggle with it, how do you know when you should seek to negotiate? A missed credit card payment or phone bill here or there isn’t usually going to qualify for debt negotiation. The best indicators that you should seek out debt negotiation are:

1. You’re more than 90 days late making a re-payment.
2. You have no feasible way to clear the debt in the near future.
3. You have a growing number of repayments you cannot make to more than one lender. 

90 day behind may not seem long enough to begin negotiating a debt. However, the reality is that the longer you wait, the more damage is done to your credit score. 

It can also impact how successfully you are able to negotiate the debt. This is due to you potentially having multiple creditors you are now unable to pay as well as a history of missing payments. Realistically, if you cannot resume making the current repayments with regularity then you should negotiate. 

Most creditors will send your debt to a third-party debt recovery service around the five-month mark of delinquency. So you should absolutely engage with them to negotiate before this time – debt collection is best avoided at all costs. So what is debt negotiation? The smart way to avoid further financial distress. 

How Debt Negotiation Works

Debt negotiation can be difficult to navigate. It needs to be mutually beneficial to both you and the creditor. Ultimately, the creditor is having to agree to receiving a lesser amount than originally agreed. This is due to them agreeing to one or more of the following:

• Reduction of the debt owed
• Lowering the interest rate on the debt
• Extending the repayment period

Due to the complexities involved, it is a good idea to engage the help of a seasoned debt negotiator. Creditors want the debt repaid and would much prefer to negotiate and recoup some of their losses than end up with nothing. For older debts, creditors maybe have already earned back the cost of the initial purchase or principal, and are simply making money on the interest.  

Just how well they’ll negotiate can depend on a few factors. Creditors will evaluate based on how much is owed, how consistently have you made repayments in the past and how well you put forth your case. 

A debt negotiation professional understands in-depth exactly what is debt negotiation. While you should always choose one carefully, a debt negotiator can achieve very desirable outcomes for you. It is possible to approach negotiation with your creditors directly, but it is not recommended.

Debt Negotiation – Good For You And Creditors

It may seem counterintuitive for a creditor to negotiate the terms of your debt, particularly if they reduce the amount owing. However, it can work in their favour as much as yours. 

Take for instance bankruptcy. Should you file for bankruptcy, your creditors will have no way to recoup their losses. By negotiating the terms with you, they are able to get some or all of the debt repaid. By not declaring bankruptcy, you are keeping your credit score protected and avoiding severe financial consequences. 

Make Escaping Your Debts A Possibility

At Debt Consolidation Australia, they take a compassionate and proactive approach to your debts. They understand that the unexpected can happen to anyone – loss of a job, change in circumstances, injury etc are facts of life. The inability to service your debts doesn’t have to consume your life. 

Wonder no more about ‘what is debt negotiation?’ Talk to their expert consultants today and let us help you get back in control of your debt. Whether you are facing one debt or many, they can help you consolidate and negotiate. Creating the opportunity for reasonable repayment terms and keeping your credit file free of bankruptcy and other damage. 

Keep the debt collectors away from your door, call us today on 1300 795 775

If you have never been a saver, learning how to save money 2020 is the best time to start. Having cash reserves ensures you are never caught out financially – meaning less stress and worry. You are also less likely to rely on credit or loans and more able to invest or treat yourself. The best way to save money is to reduce your expenses and live within a budget. 

Budget, Track & Plan Your Expenses

Without a doubt, the best way to save money is to create a budget and stick to it. The best way to create a budget is:

• Start by setting goals, debts you want to pay down, things you want to save for etc. This helps you focus your budget.
• Identify your income.
• List all your expenses. (groceries, bills, food, gifts, fuel, transport, seasonal etc)
• List your needs vs wants.
• Balance your budget – ensuring you are not spending more than you earn.
• Put your budget into action and stick to it!

Check out our simple online budget planner here.

Once you have your budget set up, it is a good idea to track your expenses and plan ahead. This helps you stay on track and live within your means. One of the best things you can do when planning how to save money 2020 is to pay yourself first.

As soon as your salary is paid, refer back to your budget and pay all debts and bills. Set aside your funds for necessary expenses such as groceries and savings. Keeping your savings in a nominated, high-interest account is a good incentive. Avoid touching these funds unless absolutely necessary. 

Consider Purchases Carefully

Arguably one of the most challenging aspects of saving is resisting the impulse to spend. Particularly if you are not used to living to a budget. If you are wondering how to save money 2020 then a good way to reduce your spending and learn to live with less is to pause before you purchase.

Before spending on something, ask yourself:

1. Do I need this or want this? A want is not a priority and impacts your ability to save.
2. Can this purchase wait? If it can, consider adding it to your savings goals and planning ahead to purchase it later.

Saving requires ongoing discipline and sacrifice.

Focus On Paying Down Debt 

Ask any financial planner and they will tell you that before you save, you should reduce or clear your debts. This is because paying interest on debt is counterintuitive to saving. Ideally you would pay off credit cards and ensure you are making all repayments on time. 

If you have numerous debts that are impacting your ability to save, consider consolidating your debts or negotiating your debts. The benefit of this being that you may be able to reduce your repayments, minimise the debt and clear it faster. 

Seek Out Better Deals

One of the easiest ways how to save money 2020 is to shop around for the best deal. We all have necessary expenses such as electricity, rent/mortgage, phone bills, health insurance etc. Successful savers revaluate the providers of these necessary expenses regularly. Comparison websites can help you determine if you are with the most competitive lender, energy provider, phone company and more. 

New deals and incentives come up all the time, so it quite literally pays to review these regularly. Depending on the local rental market, you may even be able to negotiate a lower rent. During 2020, rent has dropped dramatically, many landlords would rather discount your rent than lose a good tenant. 

By finding ways to save within your budget, you have more to set aside for a rainy day – helping you learn how to save money 2020. 

Review Your Earnings

If all of the above still doesn’t help you save, consider other ways to boost your income such as:

• Asking for a raise or volunteering for overtime if available. 
• For families; review subsidies and payments available from the government to help with the costs of raising a family. 
• Sell unused items via an online marketplace.
• Take on an additional job.

Gain Control Of Your Debts And Save Money 2020

Knowing how to save money 2020 sets you up for future success. If your debts are impacting your ability to save, speak to the experts at Debt Consolidation Australia. Our friendly and knowledgeable experts can help you to get out of debt and save for your future. Contact us today.

Each one comes with a different repayment schedule, different interest rates and different fees. It can be confusing, to say the least. This is where debt consolidation comes in. It allows you to get on top of these debts so you can manage them better. This debt consolidation guide will share everything you need to know when it comes to consolidating your debt, as well as tips on how to go about it.

A Debt Consolidation Guide: What Is Debt Consolidation?

In this debt consolidation guide, let’s start by looking at exactly what debt consolidation is. Loans and credit cards can be helpful, but when they start mounting it can cause a degree of anxiety. Debt consolidation can help to combat this. It simply refers to the act of taking out a new loan to pay off all your other loans and debts. You have the opportunity to find a lower interest rate, which can save you money in the process.

By bringing all your debts together, you simplify the process and make it easier to manage. You will find yourself with just one monthly repayment to make and stay on top of. Debt consolidation does not get rid of the other debts. When you find a lender, they will pay off your existing debts for you and roll them into the one debt. The debt is simply transferred to this new lender. 

There are two different types of loans to explore in this debt consolidation guide: 

Unsecured loan: this is when no collateral is offered up against the loan. In this instance, the lender is taking on all the risk. As a result, the interest rate is likely to be much higher.

Secured loan: this is where you offer up collateral against your loan, such as a house or car. This means you take on the risk of the loan. If you default on the loan, the lender is entitled to that piece of collateral. These types of loans generally come with a lower interest rate.

A Debt Consolidation Guide: Benefits

While we have already discussed exactly what debt consolidation is in this debt consolidation guide, now is our chance to take a look at the benefits it has to offer. Debt consolidation is a chance for you to take back control of your finances and get back on track with your spending habits. Here are just some of the benefits it offers:

• Easy repayments: by combining your debts into one, you only have one repayment to make each month. This simplifies the process and makes it much easier for you to stay on top of it.
• Save money: rolling all your money into one loan also has the added benefit of being able to reduce your interest rates. You have the option to seek out a better rate to save you. At the same time, with just one loan to pay off, you will be able to stay on top of the repayments and avoid any late fees.
• Avoid further debt: mounting debt can be a struggle to stay on top of, and you can find yourself missing payments and paying off more interest in the long run. Debt consolidation simplifies the process to get you back on track and in control of your finances.
• Boost your credit score: paying off your debts is a great way to boost your credit score. You need to make sure you meet the repayments and don’t default on the loan.

Before taking out a debt consolidation loan, it is important to do the maths and make sure you are actually getting a better deal out of it. Look at the interest and the fees and compare it to your current situation. You also need to make sure there are no other hidden costs, such as penalties for paying off your original loans early.

Another key part of this debt consolidation guide is to take a look at the process of applying for a debt consolidation loan.

Taking Out A Debt Consolidation Loan

If you are wanting to consolidate your debts into one, then speak to the experts at Debt Consolidation Australia. The process is easy. The first step is to work out if you are eligible by taking 30 seconds to fill out our online form. A finance specialist will give you a call to discuss your specific situation. This will help us to determine the right loan for your needs. From there, Debt Consolidation Australia will help you to get on top of all your debts and back into financial control.

This can result in confusion, making it hard to pay back each loan at the right time each month. Additionally, it can also lead to further debt in the process as it is so hard to manage. This is why people often choose to consolidate their personal loans into one single loan. It has many benefits and can help you get ahead financially. Here is how to consolidate personal loans.

Types Of Personal Loans

While personal loans aren’t nearly as flexible as credit cards, they do carry a much lower interest rate, which makes them a great option when you need the cash. When you apply for a personal loan, a lender will check your credit score and use this number to determine whether or not you are worth taking a risk on.

If you have a good credit history and meet all your repayments on time with no defaults, then you will find it easy to take out a personal loan. In fact, you may even find yourself taking out two or three of them over the years to fund different things. Here are the different types of personal loans you can choose from:

• Variable personal loan: the interest rate of this loan is subject to change depending on the market. This means your repayments will also change.
• Fixed personal loan: this is when your personal loan interest rate is fixed for the duration of the loan.
• Secured personal loan: when taking out a personal loan, you are often given the choice of whether you would lie to secure it against an asset, such as a car. This has the added benefit of securing you a lower interest rate.
• Unsecured personal loan: these loans don’t require you to secure with an asset. It means the lender is taking on most of the risk and often comes with a higher interest rate.

No matter which loan you opt for, if you take out a few different personal loans it can get confusing. While you may still have the means to meet the repayments, it can be tricky to manage them. This can lead to missed payments and can bring down your credit score. One great solution is to learn how to consolidate personal loans.

How To Consolidate Personal Loans

What exactly does it mean to consolidate your personal loans? If you’re wondering how to consolidate personal loans, the process itself is quite easy. It is the process of combining all your debts into one single debt. There are many benefits that come with doing this:

• Much easier to manage: by having all your debts brought into the one loan, things are much easier to manage. You only have to make one monthly repayment and keep track of one loan, taking the pressure off and making it more manageable.
• Reduced stress: with your payments much easier to manage, you will also find that your stress is reduced as a result. You have less to think about and worry over.
• Cheaper: consolidating your loans also presents an opportunity to secure a lower interest rate. This means you could end up paying less overall than if you had left the loans separate. You can also save on fees and charges that come with each loan. There are even tools to help you estimate how much you can save.
• Boost your credit score: staying on top of your finances is key when it comes to boosting your credit score. Being able to consolidate your debts into one easy repayment will make this task much simpler.

How To Consolidate Personal Loans With Debt Consolidation

Wondering how to consolidate personal loans with Debt Consolidation Australia? The process is easy! A debt consolidation loan works by combining your debts into one simple payment. Our team of loan specialists have helped thousands of people get in control of their finances. There are four quick steps involved:

1. Enquire online: we have a quick and easy form you can fill out in seconds.
2. Talk to our experts: our expert team will contact you straight away to talk about your individual circumstances.
3. Upload your documents: once we determine your needs, we will ask you to upload the necessary paperwork online using our secure platform.
4. Consolidate: we will send through a proposal to get you out of debt and to help you get on top of your finances.

This is where the Government stepped in and changed the rules when it comes to financial regulation and loan repayments, offering a mortgage payment deferral to those who are struggling and eligible. Of course, as Australia slowly opens back up again and businesses attempt to get back on their feet, where does this leave struggling Australians? Is a mortgage payment deferral still possible, or have the rules completely flipped back? Here’s everything you need to know.

What Is A Mortgage Payment Deferral?

Mortgage payment deferrals were introduced during the height of the COVID-19 crises to help those in financial hardship. Borrowers were allowed to take a break from paying their home loan for up to six months. The interest on the loan is capitalised. This means that it is still accrued during this time in most cases and has been added on to the cost of the loan, to be paid after the deferral period has ended. To keep the repayments as similar as possible to what they were before the deferral, many banks are simply extending the term of the loan to account for this added interest.

Most people were required to check in with their bank at the three-month mark, and were asked to begin making repayments again as soon as they were able. 

According to the Australian Prudential Regulation Authority (APRA), $192 billion in payments were deferred during that time, which is about 11% of all mortgages. The latest figures show that 9% of these loans are still on hold.

Can I Still Get A Mortgage Payment Deferral?

The original mortgage payment deferral offered by the Government allowed homeowners to defer their loan for a period of up to six months. On 8 July, the Australia Banking Association (ABA) announced that member banks would be extending this period for an additional four months to bring it to the end of March.

This extension, however, isn’t an automatic one. If you are able to repay your loan, then it is expected that you do so. If you are still struggling financially, then it is best to talk to your bank about the possibility of extension and whether you are eligible.

If you never applied for the first deferral program, but have found your circumstances have since changed, it is still possible to get a mortgage payment deferral. Your first point of call should be to speak to your bank and discuss the options available. The ability to access this program is very dependent on the institution.

Seek Help

If you are looking to take up the offering of the mortgage payment deferral, then the best thing you can do is chat through your circumstances with the bank. It’s important for banks and customers to work together to try and come to the best solution.

Before you call them up, it helps to have the following on hand:

• A thorough understanding of your financial situation.
• Look through the bank’s website and read up on any information they have regarding the packages. It’s important to know the terms that are specific to them, so you are prepared when it comes to discussing your options.
• Draw up a family budget that looks at any income you are receiving, government support coming through and the family expenses you are trying to cover, to provide the best overview possible. 

Having all this information on hand will help the bank chat with you about your circumstances moving forward and to determine whether or not the extended mortgage payment deferral is the right option.

Other Options

If you are still struggling to make ends meet, then it is worth looking into a debt consolidation loan. This will consolidate your mortgages, or debts, all into the one loan, with one simple repayment to be made.  This helps to simplify your finances and cut down on the costs involved with a better interest rate. This will give you less to pay off each month and make it much more manageable.

Whether you aren’t eligible for the mortgage payment deferral or are simply looking for help beyond it, speak to the team at Debt Consolidation today. We will take a look at your individual circumstances and work out the best course of action for your needs. With the year that has been, the last thing you need is more financial stress weighing you do. This is the perfect way to start looking for a solution that works for you and will benefit you in the long run.

What Is Debt Consolidation?

The process of debt consolidation is fairly straight forward. The idea is to combine your current credit card debts into the one single debt. There are many benefits that come with this. It makes the debt easier to manage, with just the one repayment to keep track of. You also have the bonus of being able to get a better interest rate on the debt, meaning you save yourself money in the long run as well. If you are struggling with multiple credit card debts and are looking for a better option, then you might be wondering, can I consolidate credit card debt.

Can I Consolidate Credit Card Debt?

Have you been asking yourself the questions, can I consolidate credit card debt? It can be overwhelming to have so many different debts all needing to be managed individually. Consolidating credit card debt is a great way to overcome this and there is a number of different ways you can go about it. So, how can I consolidate credit card debt?

1. Transfer Credit Card Debt

This is the first option many people turn to in order to help them manage their debts. The idea is simple, you transfer all your current credit card debts onto just one card. This is a good way to make your credit card repayments much easier to manage, with less interest in the process. The only issue with this option is that you need to ensure your credit card debts aren’t too large that they exceed the balance transfer limit, and that you can pay it off before the end of the period. If not, it is worth considering another option.

2. Taking Out A Personal Loan

Another great option when it comes to paying off credit card debt is a debt consolidation personal loan. This is a loan you apply to take out, which moves your credit card debts into a new loan. Ideally, this is achieved at a lower interest rate than you are currently paying on the credit cards. Personal loans have a fixed repayment structure, which means taking one on can eliminate the fees that are paid on multiple credit cards, while also getting rid of the hassle of repaying different lenders. Learn more about the benefits of debt consolidation loans here.

In order to take out a personal loan, you will normally need to have a good credit history. However, if you struggle to get approved, you can always go down the route of a bad debt consolidation loan. Before taking out a personal loan, you need to be sure you can meet the repayments and budget for them accordingly.

3. Using Your Home Loan

One final option available to you is refinancing your debts through your home loan. This means your credit card debts will be added to your mortgage. Home loan rates are generally much lower than credit card rates, and can often be lower than personal loans as well. This makes this a great option when you are looking to consolidate your credit card debt. However, there are some things you need to consider.

Refinancing your home loan is only likely to be possible if you have built up a certain amount of equity in your home. Therefore, it is worth looking into how soon after buying a house can you refinance. It could extend your mortgage by up to a few years and take even longer to pay back. In the process, you end up paying more interest overall. There can also be extra fees that come with refinancing your home. Such as break costs, establishment fees and more.

Each of these options come with their advantages and disadvantages and it is about working out which one best suits your situation. In the end, being able to bring all your credit card debts into one loan has many benefits that can help you get on top of your finances. You can also avoid this altogether by tackling your credit card debts one at a time and closing them off at the end.

Getting Credit Card Debt Help

Are you wondering, can I consolidate credit card debt? You aren’t alone. The team at Debt Consolidation Australia is here to help. We get to know your individual circumstances and give you the best advice for your situation. We will help you manage your debts to make them more manageable, easier to pay off, and with the best interest rates possible. Give us a call today.

What Is An Informal Debt Arrangement?

An informal debt arrangement is an agreement between yourself and your creditors whereby repayment terms are negotiated to reflect your personal circumstances. They change the terms of your loan in consideration of what you can manage to repay. They can be structured in numerous ways, with not every arrangement looking the same. They can entail:

• A reduction in the owed amount to allow a one-off lump sum payment to cover the majority of the debt and clear it. This requires the creditor to be willing to write off some of the debt so is understandably a less favourable option.
• An extended loan term that reduces the scheduled repayment amounts.
• Reduction in the interest percentage to allow quicker repayment of the loan amount.
• A pause in repayments for a set period to allow you to source the funds or save for the repayment of the loan.

An informal debt arrangement can be just one of the above or any combination of these. It will really depend on what your creditor is willing to negotiate with you. 

Pros and Cons Of An Informal Debt Arrangement

There are some great reasons to pursue an informal debt agreement over other forms of debt management, however, these are balanced out by some potential negatives. 

Benefits of a debt arrangement

• Informal debt arrangements do not impact on your credit score or show on your credit history. 
• Takes into account your personal situation and is tailored to give you the best opportunity to get on top of the debt. 
• As the debtor, you are not required to disclose an informal debt arrangement when applying for future lines of credit or a loan. 
• Stops creditors from harassing you or pursuing you for recovery of the debt. Creditors cannot ask you for more money than agreed on. 
• It is a more relaxed and peaceable approach to repaying a debt. 

Drawbacks of a debt arrangement

• As they are informal, the creditor can choose to re-draw the terms or retract the arrangement if you fail to keep up with the arrangement. 
• Informal debt arrangements rely solely on the goodwill of the creditor. They are not required to offer such arrangements.
• They are not available to everyone and require certain criteria to be met prior to approval. 

When Should I Pursue An Informal Debt Arrangement?

Entering into an informal debt arrangement is something you should still consider carefully. As with all debt management, you will usually need to provide proof that you are unable to service the debt as per the originally agreed terms. Things that are often taken into account to prove financial hardship are:

• Unexpected or sudden change in employment. 
• Sudden or unexpected illness or injury that impacts your ability to work.
• Changes to your living situation such as separation or divorce. 

Have you simply fallen behind on your repayments or taken on more credit than you could reasonably service? Be prepared that your creditors are likely to decline an informal debt arrangement in favour of a Part 9 Formal Debt Agreement or even declaration of bankruptcy. 

A Part 9 Formal Debt Agreement or declaration of bankruptcy have long-lasting, negative impacts on your credit score and credit history. Staying on your record for years to come and impacting on your financial future and ability to borrow. If you own a business, you are also required to disclose Part 9 Debt Agreements to companies you work with. 

It is important to note that no matter what kind of debt arrangement you enter in to, it does not release you from your debts. You are expected to adhere to the arrangement until its conclusion. Ultimately, however, your creditors want their money back so it is in everyone’s best interests to work together to find a solution. 

A debt negotiator or debt consolidation service is recommended to ensure that the terms are fair and achievable for your circumstances. Engaging the help of professionals can mean you avoid more damaging outcomes such as bankruptcy and actually get your finances in order.

Seek Help And Take Control Of Your Finances

If your situation has changed and you’re no longer able to service your debt, don’t wait until it becomes worse. Seek help from experts at Debt Consolidation and review your options to get ahead. 

Living with the stress of debt collectors is something you can avoid, call today on 1300 795 775 and get your debts back under control.

From obtaining a better interest rate to getting a shorter loan term, there are plenty of reasons you may want to go down this path. But the question is, when can you do it. How soon after buying a house can you refinance?

What is Refinancing?

Refinancing is the process of taking out a new mortgage to repay an existing loan. Many people choose to refinance their home due to a change in their personal or financial situation. Others look towards this option because they are simply looking for a better deal. You can refinance with your original lender. However, it’s much more common to change lender in the pursuit of better loan terms.

There are costs involved in the process, which can be up to 5% of the loan’s principal. It also requires everything needed for the original mortgage, such as an appraisal, title search and application fees. Before considering how soon after buying a house can you refinance, it is first worth understanding your exact reasons for wanting to refinance your home before going down the path. Before thinking about how soon after buying a house can you refinance, it is worth understanding the common reasons for refinancing.

Common reasons for refinancing

1. Securing a lower interest rate:

This is one of the best, and also one of the most common reasons for refinancing a loan. But how do you know if it is worth it and whether or not it’s a good idea? As a general rule of thumb, it’s a great idea to refinance if it is going to reduce your interest rate by at least 2%.

2. Shorten the loan term:

You are often presented with an opportunity to refinance an existing loan for another one for a similar monthly payment, but a much shorter term. It’s about doing the maths and working out how much more you would be paying and whether it is worth it.

3. Converting to an adjustable rate or fixed-rate mortgage:

If fixed interest rates are lower, then you are presented with a unique opportunity to refinance under these rates. You can then enjoy them for the course of your loan, without having to worry about the rates rising and falling.

4. Consolidating debt:

There are other, more personal reasons why people choose to refinance their home. Getting yourself a better rate and paying off less, in the long run, is great. However, some people choose to use the equity in their home to cover big expenses, such as renovations, or a child’s education.

Debt consolidation consists of tieing all of your debts into one neat and tidy package. This makes repayments much easier to manage, can save you thousands on interest and also stops the nagging creditor calls. This form of loan can provide you with an influx of extra cash and can be either secured or unsecured.

How Soon After Buying A House Can You Refinance?

There are so many different reasons for refinancing your home, and each one has its benefits. Make sure to weigh up the costs involved against what you will get in return. From here, you can decide whether it is worth it in your situation. This brings us to the question, how soon after buying a house can you refinance?

The great news is, there is no set period you have to wait before choosing to refinance your home. In fact, you can do it in the first year of your home loan approval. But there are some things you should consider before diving in.

One of the most important things to look at is the equity in your home. This is the difference between what you bought the place for and what it is now worth. It is often advised to hold off refinancing until the equity is at least 20%.

This is one of the main things that lenders look at when making a decision about whether or not they should lend you the money. The more equity you have in your property, the higher your chances of getting the best deal when it comes time to refinance your home.

Of course, if you are looking at how soon after buying a house can you refinance, the best option is often to wait. It takes time to build up equity in your property, and if you refinance too quickly, you are unlikely to be getting the best deal possible for your situation.

Finding The Right Help

Once you have made the decision to refinance your home, it is worth getting the right advice for your personal situation. Perhaps you are refinancing for a better deal, to pay off debts, or to renovate your home. Whatever your reason, it is worth knowing what you are getting into. The experienced team at Debt Consolidation can look at your individual circumstances. From here, we can help you to decide what the best option is for you.