If you overspent at Christmas, you’re not alone. Many of us feel pressured to splash out during the silly season, and this can leave a serious dent in our wallets.
A recent Finder study revealed that 36% of Aussies funded Christmas using a credit card or Buy Now Pay Later (BNPL).
If you’ve paid for Christmas with a credit card or BNPL, you can end up with a long list of individual repayments to cover. This can increase your risk of falling behind, which can lead to late fees and additional interest. A debt consolidation loan can be of use if you want to avoid this.
How a debt consolidation loan can help
Keeping on top of repayments can be stressful, especially if they’re spread across multiple providers. A debt consolidation loan will transfer your existing debts into one account under a single interest rate. Let’s take a closer look at the key benefits.
Switch from multiple repayments to one single repayment
It’s hard to keep track of numerous repayment due dates, especially if they all fall on different days. By taking out a debt consolidation loan, you’ll only need to make one regular repayment. You’ll also only have to deal with one creditor rather than several.
Minimise dishonour fees
With fewer repayments to juggle, you’re less likely to incur dishonour fees from missing the odd repayment date. Not only does this benefit your hip pocket, it can also protect your credit score from being dragged down.
A debt consolidation loan can often mean a lower monthly repayment amount by allowing you to make one payment instead of having to make minimum payments to a long list of providers. This can make it easier to remain within budget and regain control of your finances. Check with your lender to see if you’re able to make extra repayments or pay above the minimum amount. This can help to speed up the repayment process.
Other things to keep in mind
As with any financing option, debt consolidation loans aren’t entirely risk free. Before applying, it’s important that you have a clear understanding of what’s expected from your end. Below are some additional factors to keep in mind.
Starting off the new year bogged down in debt isn’t ideal. But a debt consolidation loan can help you regain control of your finances and get back on track in 2020.
If you’re ready now, apply for a debt consolidation loan with Fair Go Finance today.