Take Control of your Money
If you’ve been hiding from debt, now is the time to face your fears and get rid of the ugly financial monster hiding in your closet.
The first step is to calculate how much debt you have and how much it’s costing you in regular payments and fees. Add up all your regular payments and frequencies, including how much you pay that you don’t need (interest charges on borrowed money and card fees) to prepare your repayment strategy.
Try using our debt consolidation calculator to total up your debt.
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Once you’ve calculated how much debt you have and how much it’s costing you, you can create a plan to pay it all off.
The more a debt is costing you, the more you benefit from paying it down. This means it may be worth prioritising the debts with the highest interest rates and/or fees before you tackle other lower-cost debts, even if they are for larger amounts.
Credit cards each have their own interest rate. So, if you can’t pay off the balance in the short term, try and find a lower-cost credit card that you can transfer your available balance to. Then lock the new card away while you repay it.
Here are some other tips to help you on this journey.
A credit card due date that doesn’t align with when you get paid can make budgeting and balancing your finances more difficult.
Choosing a payment date that works best for you and your current employment payments could help you pay off your debt fast and ensure you aren’t charged for late or missed payments.
Think about when you get paid and the times of the month you have the most cash available in your account. Then consider setting a repayment to line up with that.
You can do this in a few ways, but the most popular techniques are changing your existing repayment dates to all fall on the same day or consolidating your existing debts into a single loan with a single repayment date and amount.
Your aim here is to reduce your debt as quickly as possible while avoiding taking on any additional debt or increasing any of the charges attached to your existing payments.
Once you have a payment strategy in place, you might find you have additional money available from paying fewer fees on your debts, which can be directed into your emergency fund or used to make additional payments and reduce your debt even faster.
Try our free budget planner to help get a handle on your debts.
Debt consolidation loans can help you take control of separate debts and make them easier to repay. Ultimately, the right debt consolidation loan can also save you money.
Debt consolidation can have its downsides too. For example, applying for a new loan and being declined could negatively impact your credit score and make it harder to get finance in the future.
These loans may have upfront or ongoing fees that may look attractive on paper but in reality, cost you much the same (or more) than you were previously paying.
Consolidating debt in to loan with a longer term can be appealing as it could mean lower regular repayments, but the risk is you end up paying more in interest overall.
Only choose a debt consolidation loan when you have weighed up your options and are sure it will save you money overall.
Important information: Any advice or information on this site is of a general nature only and has not taken into account your personal objectives, financial situation and needs. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your personal objectives, financial situation, and needs. Helen Baker is an Authorised Representative(s) of Godfrey Pembroke Group Pty Ltd ABN 38 078 629 973, AFSL number 245451, an Australian Financial Services Licensee, with offices at The Bond, Level 3, 30 Hickson Road, Millers Point NSW 2000.