What is Debt Consolidation?
Debt consolidation is when you refinance all your existing credit card debts and/or personal loan debts into one single repayment. In other words, it means a lender will pay off all your existing debts so instead of having to make lots of small repayments to lots of different lenders you simply make one repayment to one lender. Simple.
So what are the benefits of debt consolidation?
#1 One Simple Repayment
Staying on top of your personal finances can be a challenge at the best of times, let alone when life gets busy. For those of us with multiple credit cards and the odd car loan or personal loan, it doesn’t get any easier – especially when all these repayments are due on different days. Debt consolidation can help simplify “life admin” by consolidating all these debts into one easy to manage repayment. This can help reduce the stress of managing your personal finances, plus in the long-run help improve your credit record by making sure you don’t miss a repayment.
#2 Pay Less Interest and Lower the Amount of Your Repayment
Debt consolidation can also help reduce the amount of interest you pay on your debt and possibly lower the amount of your regular repayment. For example, by refinancing the outstanding balance on a high interest rate credit card to a lower rate personal loan, you can save thousands! Check out our example below What’s more a lower interest rate can mean a lower regular repayment amount (depending on the period of time in which you would like to pay off your debt). This means not only could you save enough money for your next big trip, but you could also have far less stress when it comes to managing your monthly budget.
#3 Set Yourself a Debt-Free Date
Consolidating your debts into one fixed rate personal loan means you’re setting yourself a clear date in which all your debts will be paid off! That’s because unlike your credit cards in which you’re only required to make a minimum repayment, a personal loan has a fixed repayment that includes both an interest component and principal component that goes towards paying off the balance of your loans.
If you interested in obtaining a debt consolidation loan, you can either apply for personal loans here or contact us via email on email@example.com or phone us on 1300 990 115.
Follow Us on Facebook
Please message us on Facebook (https://www.facebook.com/ourmoneymarket/) if you have any questions about this article. If you found our article helpful in any way, please don’t forget to share us with your friends by liking our Facebook page.
Source: OurMoneyMarket Lending Pty Ltd ABN 64 605 231 669 Australian Credit Licence 488228.