With the new year upon us, this is the perfect opportunity to set some realistic financial goals and start seriously looking at organising your personal debt to kick start your 2019!
- 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 you should list things like if you have balloon payments on car loans, have high break costs on fixed loans, are a guarantor for, or have a guaranteed loan. Make sure you check your loan agreements or speak to the lender if you are unsure.
- Review your cards
Do you pay the minimum repayment on your cards or have a debt that just won’t go away? If so, you should review your cards and determine whether it’s worth reducing the limit as you repay them (to kerb unnecessary spending), or consolidating the constant debt into a personal loan that can be repaid. There are a number of benefits to using a personal loan instead of credit cards, so review these and consider restructuring your outstanding cards.
- Consolidate debts
If you are looking to free up some extra cash, then consolidating some debts may be a worthwhile option. Debt Consolidation Loans are offered by most lenders and can help simplify your finances. If you need help, finance brokers are qualified professionals who can provide you with financial guidance and assist with the application process.
There are many benefits to debt consolidation, including the fact that managing one loan is a lot easier (way less paperwork for one!) and less stressful than managing multiple loans with multiple lenders. The biggest benefit however, is the possible cash savings you could experience. There is potential to pay lower interest rates, and instead of paying for multiple sets of ongoing fees you will be paying for just the one.
- 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 need to set yourself at least one financial goal for the year.
Even if it is simply to complete your debt snapshot and implement a proper budget so you can fully understand your cash flow and establish any worthwhile changes. So with the start of the year well under way, we believe committing to a New Year’s resolution to organise your debts is one you will definitely reap rewards from now and in the years to come.
To see if you are eligible for debt consolidation with Fair Go, check out our
“Debt Consolidation Loan” information page.