We have been helping Australians with debt consolidation advice for years! What type of advice do we provide?
We provide advice to Australians as to how they should deal with personal debt and the options available to consolidate debt. The burden of personal debt can be very stressful and it is critical that you speak to industry experts who understand all products that are available.
The area of personal debt is very complicated and there are many products to choose from. Not many companies offer the full range of debt consolidation solutions and as such their advice may be biased towards the products they offer.
How does debt consolidation work?
The concept of debt consolidation is to take all the debts you owe to many different creditors (lets say you have 5 different creditors) and you then consolidate those debts into 1 debt.
Typically people believe that the only way to consolidate debt is to apply to the bank for a debt consolidation loan. Whilst that is a proven method of consolidating debt for people who are insolvent, it is not appropriate for people who are insolvent (ie people who cannot pay their debts as and when they fall due). Therefore for people who are insolvent they should consider other legally accepted forms of debt consolidation for example a Debt Agreementor a Personal Insolvency Agreement.
If you are insolvent, you may benefit from a Debt Agreement or a Personal Insolvency Agreement. With a debt agreement or personal insolvency agreement the interest will be frozen on your debts and you will enjoy debt relief (ie usually you do not repay 100% of the debt). This will enable you to pay off the debt within a shorter period of time. A Debt Agreement or a Personal Insolvency Agreement isn’t appropriate for all people and strict application criteria apply.
When is a consolidation loan not appropriate?
If you are on a low income and have a high amount of debt you may not be able to afford the loan repayments for a debt consolidation loan. In fact you may be insolvent. If you are offered a consolidation loan make sure you can afford the loan repayments and the interest rate is reasonable. We wouldn’t recommend a consolidation loan longer than 5 years.
How can we help you?
Debt Free provides a FREE debt analysis and will help you establish which debt consolidation product is best for you. We are open 7 days a week from 9am to 5pm.