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A Guide to Debt Consolidation

Applying for a Loan

So what is debt consolidation? Well a debt consolidation loan is a personal loan you take out to repay several small debts (such as unsecured loans, credit cards, store cards etc.)  It does sound appealing but should you jump straight in? Well to be honest debt consolidation can be very beneficial when done well.

Our debt consolidation guide below will provide you with all the ins and outs about debt consolidating and will help you decide whether you should consolidate your debts.

Top 3 Benefits of Debt Consolidation

Lower payments If you consolidate your debts, usually the monthly repayments are lower than what you are currently paying so you improve your cash flow.

Easier to manage one loan You will have one repayment to focus on, rather than a few of them. This will make it much easier for you to budget, as you won’t have to make separate repayments on different days to different lenders.

Reduce the impact on your credit score If you do not debt consolidate, you will have multiple payments therefore more chances of missed payments! And then dishonour fees and penalty interest can be added but remember this will also affect your credit score. (We don’t want that to happen)

Bad Credit Score but you need to debt consolidate

It can be stressful wanting to debt consolidate but you are worried about your bad credit score affecting you. But at Fair Go Finance, we help lots of customers who have a bad credit history get the loans they need. What we also do is help you to get your bad credit history back on track. How?

If you need help with your credit score, you can request a free copy of your credit report from Equifax and find out if and why you have a bad credit history. Once you know, it’s easier for us to advise you. Quick Tip: Checking your own credit will not harm it.

Who is eligible for a debt consolidation loan?

Well first of all, you need to be at least 18 years of age and a permanent Australia resident with regular paid employment. If you have this, we will then assess your affordability.

Other things to keep in mind when consolidating your debt

As with any financing options, debt consolidation loans aren’t entirely risk free. Before applying, it’s important that you are clear on key things to keep in mind.

Paying minimum repayments for your loan Having a reduced interest rate and lower repayments may mean that your debt hangs around for longer. But if you’re able to pay a bit extra into the loan, this doesn’t have to be the case.

Credible lender Make sure you are using a credible lender so remember to do your research! The lender should also set up a repayment plan for you and they should make sure you can actually afford it!

Spending and credit rating Poor financial management means you may end up in more debt with a consolidation loan so it’s really important to rein in your spending. Take your repayments seriously to prevent this from becoming a repeat pattern and it affecting your credit score.

So if want to move forward with us and apply for a debt consolidation loan today as now is a great time to get the ball rolling.