Greater Bank Guide to Budgeting
We could all use a little help managing our money – see how we can help.
Consolidating your debt
The burden of debt can be heavy, but consolidating your debts with a bank with your best interest at heart can put you on the fast track to living debt-free.
Consolidating your debt - Greater Bank
Your Debt Consolidation questions answered
Debt consolidation is the process of taking multiple debts and combining them into a single line of credit.
For example, you may have a number of different loans spread between lenders, paying different interest rates and different regular repayments on each.
Repaying debt this way can be time-consuming, and it can feel like you're never making any ground in paying down what you owe.
By combining all your debts into one loan repayment, paying one interest rate, you may find it easier to more effectively pay down your debt.
For example's sake, let's say you had two credit cards, with debts owing of $2,000 and $3,000 each, and a personal loan debt of $8,500.
With each of these debts, you're paying a different interest rate with a different repayment amount, and a different due date. It can be tricky to stay on top of all these details.
Debt consolidation can help simplify your debt situation by combining all your debts into a single personal loan. This way, you have one set of repayments, one interest rate, and one recurring due date for repayments.
If you're able to secure an interest rate on your debt consolidation loan that is lower than the interest rates of your existing debts, this can also help you get ahead in reducing your overall debt.
You can use a personal loan repayments calculator to work out what your repayments could be.
The key advantages of debt consolidation are:
- Debt consolidation gives you one recurring repayment, which can be easier to manage;
- With a single debt consolidation loan, it may be easier to use a repayments calculator to plot your path to becoming debt-free;
- You'll now be able to budget and manage your cash-flow more effectively.
Get the lay of the land
The first thing you need to do is take stock of your credit situation as a whole. As painful as this may be, it will allow you to get a realistic picture of what lies ahead.
You should calculate how much you owe on each debt, how much interest you’re paying on each debt, your debt total and the timeframe you’ve been given to honour each debt. Don’t forget to include any fees and charges you are also currently paying.
Consider your options
Consolidating your debts can come with many advantages.
You can potentially save money by not paying multiple different interest rates and sets of fees, and time by reducing your debt to one convenient monthly repayment.
Credit Cards
When it comes to methods of consolidation, the choice is yours. If you have multiple smaller debts, you may benefit from taking up a Credit Card.
Personal Loans
If your debt total is larger, a Personal Loan might be the better option for your needs.
Get the right product
Before you sign up for anything, make sure you do your homework. It can be worth your while taking the time to talk to an expert from an organisation with a history of responsible lending practices, like Greater Bank.
If the idea behind consolidating is to make your repayment process easier, cheaper and more convenient, speaking to us is the way to go. As we have no shareholders, we’re able to invest our profits into providing better value rates, lower fees and helpful product features designed to help you become debt-free sooner.
Stay on budget
Now that you’ve simplified your debt landscape and are only making one repayment, with one interest rate, all you have to do is stay on track.
The key to this is setting up and sticking to a budget.
Once you’ve configured your finances so that you can support your consolidated debts, the hard part is over.
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