Paying off short term debts like credit cards and personal loans over much longer periods, even at a slightly lower rate, actually means paying a lot more interest in the long run.
Although the lower monthly instalment may give you short term breathing space, it will keep you paying interest for up to twenty years.• It can lead to more debt.
Step 1: Gather information about all your debts To take control of your debt it is essential to know how much debt you have.
Review your statements and work out the following: Step 2: Work out how much you can put towards paying off your debt each month Next, it’s good to know where your money is going and how much you have coming in.
Theoretically, any use of one form of financing to pay off other debts is practicing debt consolidation.
However, there are specific instruments called debt consolidation loans, offered by creditors as part of a plan to borrowers who have difficulty managing the number or size of their outstanding debts.
View the Total Cost of Borrowing Before you apply, we encourage you to carefully consider whether consolidating your existing debt is the right choice for you.
Consolidating multiple credit accounts into one new loan with a single payment may help you lower your overall monthly expenses, increase your cash flow, and eliminate the stress of multiple monthly payments.
When you're choosing the term of a loan, consider the total amount of interest and fees you’ll pay.
At Westpac, we offer three ways to consolidate debt: A personal loan can be a good option to consolidate a range of debts.
The main benefit of a personal loan is that it has a fixed term.