Debt Consolidate, Debt Consolidation, Debt Consolidate Loan

With debt at epidemic proportions in Australia, the number of companies offering debt reduction solutions has flourished. The public is virtually overwhelmed by a myriad of options, many of them promising fast and painless pathways out of debt.

With so much conflicting information available, how do you choose between one strategy and another? How do you choose a provider you can trust? It’s little wonder that many people bury their heads in the sand in the hope that their financial worries will simply disappear. Unfortunately, this is one of the least effective strategies.

Looking to reduce your debt? Consolidate carefully.

Be wary of companies offering quick fix debt consolidation and debt reduction solutions. If it sounds too good to be true, it probably is.

It’s vitally important, therefore, that you deal with a company that’s reputable and trustworthy. A company you can trust will focus on the solution that’s right for you, not on the solution that pays them the highest commission.

Make sure that you completely understand the legal implications of any agreement you enter into and what your immediate and long-term financial commitments will be. If you don’t fully understand the documents provided to you, take them to someone who can explain them to you. Do not sign anything without understanding exactly what you’re getting into.

Seek independent advice before you debt consolidate. Make sure that the company you deal with has your best interests at heart. Remember, MyBudget is here to help you.

Is a debt consolidate loan the right solution for me?

Many people believe the only way to relieve their debt is to consolidate their loans. This misconception is often fuelled by advertising slogans like “get out of debt—consolidate and save!” It’s important to remember that there’s more than one way to get out of debt. Consolidate your debt is just one option. It can work well in the right circumstances, but it’s not always the best solution.

To start with, debt consolidate loans are often difficult to obtain. Those people who are already behind in payments or have defaults on their credit file may not qualify for a debt consolidate loan.

Many companies specialise in debt consolidate lending to people with poor credit histories. These loan products usually attract higher than average fees and interest charges which can make the loan repayments unaffordable.

If you do have a good credit history and can secure a loan with a reasonable interest rate, debt consolidation may be a good option for you. A good debt consolidate loan should lower your overall cost of repayments by combining your high interest rate loans (credit cards, unsecured consumer debt, car loans etc) into one loan that has a lower repayments. A good debt consolidate loan will improve your cash flow and streamline your payments without compromising your long-term financial outlook.

MyBudget can help you to do your homework by examining how a debt consolidate loan would affect your personal or household budget in the immediate term and long into the future.

I want to reduce my debt. Consolidate it into my home loan?

In most cases, debt consolidation involves refinancing your house to pay off your credit card and consumer debt. Consolidation sounds simple and sensible, right? Pay off your consumer debt, consolidate your loans into one payment, and have more money left over at the end of the month. Unfortunately, it’s not always that easy.

Consolidating your debts into your home loan can help your household budget in the short-term by freeing up cash flow. But you must also consider the long-term consequences and costs. Compare these two scenarios:

• Scenario 1: $10,000 charged at 15% interest per annum over five years = $12,022 total repayment amount
• Scenario 2: $10,000 added to an existing home loan of $250,000 at 7.5% interest per annum over 25 years = $22,169 total repayment amount

The affects of compounding interest makes the cost of repayments in the second scenario more than double the original loan figure. You may also be hit with fees for making a loan variation.

MyBudget can help you thoroughly examine these sorts of scenarios and work out which strategy is best for you. If it’s agreed that a debt consolidate loan is the right solution, we can manage the process for you and administer your budget to make sure that you’re getting ahead as quickly as possible.

I want to reduce my debt. Consolidate it into a formal debt agreement?

A Part 9 Debt Agreement is a legally binding contract which represents a compromise between you and your creditors. There are strict rules about who qualifies for a formal debt agreement and it only covers unsecured debts, such as credit cards, telephone bills and utilities. The agreement must include any and all creditors to which you owe unsecured debts—there are no exceptions.

A formal debt agreement will freeze the interest being charged to you and provide a set repayment figure for a set period of time, usually up to five years. A formal debt agreement also protects you from legal action from your creditors during that period.

You must keep in mind, however, that the consequences of a formal debt agreement are serious and far-reaching. Formal debt agreements are regulated by the federal government. A formal debt agreement will appear on your credit file for seven years and your name will be listed on the National Personal Insolvency Index forever.

In fact, the consequences of a formal debt agreement are not dissimilar to bankruptcy. This is why you should explore all of your options. Did you know that 97 percent of MyBudget clients are able to reduce their debt and gain control of their finances without entering into a formal debt agreement?

What is the best debt solution for me?

At MyBudget we never promise quick fixes. There’s no magic wand or one-size-fits-all answer to every financial problem.

MyBudget is famous for reducing financial stress and getting people back on track because we thoroughly examine all of their options and, in every single case, design a tailor-made solution.

It starts with a free consultation where we will assess your financial situation in detail. As well as analysing your income and expenses, we closely examine your debt situation. Even if you decide not to proceed with MyBudget, your customised budget plan and our recommendations are yours to keep for free.

Our advice is free and independent, which means that we explore all of your options. Our caring staff also explains everything in simple, easy to understand terms. No question or concern is too big or too small. We’ll continue to answer your questions at every stage of the process.

MyBudget helped Yvonne get on top of her finances without the need for debt consolidation. We can help you, too.

The debt solutions MyBudget implemented for Yvonne saved her from personal insolvency—not to mention insomnia, stress and major anxiety.

Find the best option for you. MyBudget’s advice is independent, confidential and free.

A free consultation with MyBudget is an opportunity to gain deep insights into your financial situation and all of your options. Even if you decide not to become a MyBudget client, the budget plan we prepare for you is yours to keep at no charge.

Change doesn’t have to be difficult. The first step is always the hardest, but in this case it’s as simple as making a phone call. Take the step today to get out of debt and start saving. It’ll be the best decision you’ve ever made.