Has lockdown seen your incoming cash drop but your bills stay the same? You are not alone. Lots of people will be increasing their borrowing and building their debt during the current lockdown. The wise thing to do is stay on top of things. Keep an eye on your total debt levels and try and borrow at the lowest interest rate possible. It is here where if you’ve been using Credit Cards you may be better off looking at a debt consolidation process.
Debt Consolidation happens when you combine all your smaller borrowings, loans, credit cards etc into one, easy-to-manage loan - leaving you with one monthly payment, rather than several repayments that you need to track and manage.
One of the biggest advantages of consolidating debt is the opportunity to lower your overall interest rate and monthly repayments, giving you the ability to pay off your debt faster and pay less interest overall. It is great for cashflow.
The overall interest rate you’re able to get through depends on which type of personal loan you get, so be sure to have a look at our the difference between secured and unsecured loans – if you are not sure on the difference this handy article will help.
Benefits of debt consolidation?
With a debt consolidation loan you may be able to get a lower interest rate and a new loan term which means your repayments may be smaller and more affordable.
One loan to manage instead of a couple can make budgeting, and keeping track of your finances, easier.
Drawbacks of debt consolidation?
There may be extra fees and charges, depending on the loan offers, so be sure to compare the debt consolidation offers with different lenders;
As people, our willpower sometimes isn’t as strong as we would like it to be - having more money to spend each month can mean you don’t put it towards your debt and instead, spend it on other things.
Compare loan providers with Money Compare
We list and compare loan rates and providers from a large number of different financial institutions. You can use Money Compare to see what rates and loans may be available to you. Some of our recommended partners include;
The Lending Crowd - The Lending Crowd offer a comprehensive range of personal loan options if you are looking to borrow an amount between $2,000 and $200,000. They recently expanded their offering to offer both secured and unsecured loans. Interest rates for unsecured loans start at 5.66% p.a., and if borrowers choose to secure their loan with property or a vehicle, they will be rewarded with an even lower interest rate across all risk grades. Secured rates start from 5.03% p.a.
Harmoney - Borrow up to $70,000 unsecured with personalised rates from 6.99%. Harmoney offer loans of $2,000-$70,000 with repayment periods of 3-5 years. All loans are unsecured. They currently offer interest rates between 6.99% p.a. – 24.69% p.a., which are fixed for the life of the loan. You will need to pay an establishment fee and interest on your loan, and there is no early repayment fee. You can make repayments weekly, fortnightly or monthly.
Need a Business loan?
If you are a small business you may also need to look at some borrowing to see you through these tough times. We strongly recoemmend Prospa for business loans. Great online process, really simple and very understanding lenders. Chek our Prospa if you are looking for a small business loan here.