Are you ready to set some realistic financial goals and start organising your personal debts once and for all?
Here are 4 tips to get started:
Prepare a debt snapshot
Our first tip is to create a clear and up-to-date snapshot of all your debts. An easy way to do this is to put all your debt information into a single excel table such as the one below.
This list will provide you with a quick and clear reference of your debt position and can help highlight improvement and refinance opportunities.
In the important notes section list information such as balloon payments on car loans, high break costs on fixed loans, if you are a guarantor, or have a guaranteed loan (someone is your guarantor.)
If you’re not sure sure, it’s a good time to check your loan agreements or speak to the lender, as enough may have been repaid to have the guarantor requirement removed.
Review your credit and store cards
Do you only pay the minimum repayment on your cards or have debts that won’t go away?
If so, you should review them all now as you are probably paying high interest charges.
Determine whether it’s worth reducing the limit or consolidating the constant debt into a personal loan that can be repaid.
There are a number of benefits if you use a personal loan instead of credit cards, so please read our linked blog. It may be the right time to restructure and consolidate your debts.
If you are looking to free up some extra cash, consolidating some debts may be a worthwhile option. Debt Consolidation Loans are offered by most lenders and can help simplify your finances.
There are many benefits to debt consolidation, including the fact that managing one loan is a lot easier than managing multiple loans with multiple lenders. The biggest benefit however, is the extra cash you’re likely to see straight away.
Make one or more “debt goals” for the year ahead
Many finance guru’s support the theory that you should always try and repay your highest interest rate debts first. Others suggest paying off your smallest debts first so you can experience a sense of satisfaction when it’s closed.
Overall the decision is entirely yours, but you should set yourself at least one financial goal for the year.
Even if it’s simply to complete your debt snapshot and implement a proper budget that you stick to – you’ll be one step closer to a brighter financial future.
To see if you are eligible for debt consolidation with Fair Go, check out our
“Debt Consolidation Loan” information page.