Save Money Through a Consolidation
If you are struggling with debt, it’s a good idea to look at a loan that allows you to consolidate your debt into one. There are many benefits to doing so, but one of the most significant ones is that it will allow you to potentially save money. For someone who has to pay off certain amounts every month, any money that is saved would be welcome indeed. Some of the usual scenarios involve single professionals who have to deal with large amounts of school fees. When you add in the fact that there’s a good chance that these professionals also make use of credit cards and have to pay rent every month, the amounts that are due every month can really add up.
A debt consolidation loan, however, can help to make the payments due more feasible and possible. Take the example where you have a family struggling to pay the monthly rates on several credit cards. Credit card interest rates can reach up to 19%, and even higher. Some card rates even go as high as 21% or more. Those percentage points can really add up, especially if you’re not able to pay the minimum required amount each month. And once you factor in the fact that there are several credit cards, then the monthly amount due can move out of reach. But a consolidation loan can help because that loan can be used to pay off and do away with the credit card debt completely. What is left is just the one loan, and knowing how credit cards are, the interest rate on this new loan will be significantly lower than the rates charged by the credit card companies.
Going back to the example of single professionals, it should come as no surprise that there are many single people in Australia today who are struggling with high rates and large amounts of consumer debt. These are the situations where a combining your debt could be of great help. Consider that according to the Australian Bureau of Statistics, total household debt at the end of 2013 was around $1.84 trillion. If you divide that by the population at the time, each person would owe $79,000. That’s quite a large amount! Many people even owe much more. It’s also illuminating to compare household debt with their disposable income. As of 2013, households in Australia generally had debts which were 180% of their disposable income. So clearly, debt levels are reaching levels where people’s incomes are struggling to keep up.
For single professionals or other people in debt, a loan offers a way of making their debts easier to manage and pay off. It allows the regular payments to be reduced to smaller amounts. This way, it becomes more possible for regular income to handle the level of debt.
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