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Debt Consolidation and Repayment
Repaying your debt can be a hard, short term task but not if you have a goal and good advice.
Debt Consolidation involves calculating your current income less your current living expenses, credit cards, home loans, unsecured loans (combine your debts into a single lower interest loan) = making it easier to make repayments = reduced debt and personal expenditure.
All interest rates are updated daily.
| Provider | Credit Cards | Interest Rate(p.a.) | Annual Fee (p.a.) | Balance Transfer Rate (p.a.) | Cash Advance Rate (p.a.) | Apply Now |
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HSBC No Annual Fee | 21.99% | $0 | 0% for 6 months | 21.99% |  |
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HSBC Qantas Frequent Flyer | 21.99% | $199 | 0% for 6 months | 21.99% | |
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Virgin Australia Velocity High Flyer Card | 20.99% | $249* | 1.9% for 6 months | 20.99% | |
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Virgin No Annual Fee Card | 18.99% on purchases | $0 for the life of the card | 2.9% for 6 months reverting to 20.99% after 6 months | 20.99% | |
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Westpac Low Rate | 0% for first 6 months then 13.49% Purchase rate |
$45 |
3.99% for 6 months |
21.49% |
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Westpac Earth Classic | 19.99% |
$75 |
0.99% for 6 months |
21.49% |
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Consolidation Loans are very popular for the Australian borrower. These loans are aimed at giving you the best deal for paying off several combined loans, i.e. student loans, personal loans or credit card debts.
It is advisable to research your options and always plan to pay back more than necessary to reduce debt much faster. Otherwise your debt will remain active for many years to come. Just by choosing the right product you can save thousands in the process. It certainly pays to shop around.
Credit card balance transfers
Credit card balance transfers allow you to reduced interest rate by choosing a credit card with a honeymoon period of between 6-months or greater.
Just bear in mind that this has the greatest benefit to you if you continually pay off the card and pay it out within the honeymoon period, otherwise you'll end up paying hefty interest rates which will only increase your overall debt.
Debt consolidation and repayment with this method will require discipline by you.
There are lots of balance transfer cards on offer for you to compare. If you're unfamiliar with the balance transfer concept, or want to find out more on how you can avoid common pitfalls please refer to our balance transfer guide.
Basic knowledge to help you out of debt:
Debtors (individuals owing money to others) need to develop expertise on the subject to ensure they can correct this situation quickly and effectively. No matter how inattentive you may have been in the past to your finances, you should make sure you know every available option in the current market place, where to look for assistance and who can provide you with really solid advice.
It helps to ask these questions initially:
How did I get into debt in the first place? This may give you some clues how to get out of it, and should certainly help you avoid it happening again. It may have happened for personal reasons, business reasons, or bad financial planning.
What exactly is my current financial situation? You need to know what your income, expenditure and assets are to the dollar. Without this information, you cannot hope to make any positive changes.
Spend a few minutes (that’s all it takes – really!) to create a budget based on the above information. This will help you plan ahead to live the most frugal life possible until the debt issue is resolved. You may need to cut back, realise some assets or if possible, increase your employment workload.
Are you eligible for any government assistance? Depending on your situation, you may be able to get some help from the government. Information is available at the Centrelink website.
Have you spoken with your current lender? They may be willing to help! Don't be shy about speaking to your lenders and letting them know you're in debt trouble. It is in their interest to have you remain solvent, and they may work out a more suitable payment plan for you to achieve this end. The alternative - your bankruptcy - would leave them with nothing.
Will your credit rating stretch to a consolidation of your debts? If so, you must still make certain that this is the right thing to do. If high fees and high interest rates are involved, you could end up in an even deeper debt hole.
Court proceedings! If you do end up in court, you can apply to have your debt repaid by instalments. The amount has to be low enough for you to keep up with the repayments, but not so low that the court thinks you're being unreasonable.
Bankruptcy! This is the last resort, but at least it draws a line under your current debt. The downside is that your will not be discharged as a bankrupt for three years, and during that time your ability to borrow will be severely restricted and you may be turned down for certain jobs.
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