Consolidating your debts could make it easier to get ahead this year.
If you’re making repayments on multiple loans to different lenders each month, there could be an easier and more cost-effective way to manage your debt. To save yourself a lot of stress and money, why not consider rolling everything you owe – on personal loans, credit cards, and more – into one easy-to-manage loan?
Debt consolidation can be a good option for people facing financial hardship, but you don’t have to be struggling to benefit. Even if you can comfortably make your repayments each fortnight, consolidating gives you the opportunity to save money by securing a lower interest rate and a loan with better terms.
Long-time members Kirsty and Blair recently found out how consolidating their debts through MOVE Bank could help them save money on interest and assist in paying off their debts quicker. MOVE Bank was able to offer Kirsty and Blair an interest rate which was over 3.5% cheaper than the rate they were paying with Commonwealth Bank. This has meant they’ve been able to simplify their repayments into one, and also saved them money on interest in the long term.
If you’re looking to consolidate your debt like Kirsty and Blair, here are some tips to make it work for you:
Look for a good deal
If your goal is to save money, make sure your new interest rate is lower than what you’re currently paying. Don’t forget to take the fees and charges into account. You can do this by checking out the comparison rate. The comparison rate is a rate which includes both the interest rate and the fees and charges relating to the loan, combined into a single percentage figure. This will make it easier for you to compare different loans from different lenders.
Check for penalties
Your existing lenders may charge you to pay off your debts early. Look through each contract to see what it’ll cost you to end the agreement. Keep in mind that the interest rate savings will usually more than make up for the cost of any early repayment fees.
Don’t go deeper in debt
When looking to consolidate, try to avoid extending the length of your loan. Remember that while a longer loan term will reduce the size of each repayment, you could end up paying more as the interest accumulates – even with a lower rate. It’s best to try paying off your loan as early as your budget allows.
Also, try to resist the temptation to add a little extra on top of the new loan; consolidating only works if you reduce your overall level of debt. Once you’ve transferred the balance on your credit cards, cut them up and close the accounts!
Work with someone trustworthy
As this process can take time and effort, make sure you work with a reputable organisation, such as the team here at MOVE Bank. A reputable lender will take the time to understand your financial situation, and will always be upfront about all fees, charges and repayments.
Is it time you took control of your debt? Then it might be the time to consolidate.
To discuss strategies for getting on top of your debt contact us on 1300 362 216 or start your personal loan application online here.
This blog post is for general information purposes only and is not intended as financial or professional advice. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product or other professional advice. You should seek your own independent financial, legal and taxation advice before making any decision about any action in relation to the material in this article. Railways Credit Union Limited trading as MOVE Bank ABN 91 087 651 090. AFSL/ Australian Credit License number 234 536 | ABN 91 087 651