If you are like many Kiwi’s you will be receiving your credit card bill soon with all your Christmas and New Year spending.
The ‘festive season’ might have cost more than you think.
Now you have to deal with the financial hangover that follows.
Credit Card Debt Is Expensive
They say that credit cards are designed to allow you to buy products and services now, but pay for them later. Most credit cards provide a period of interest free credit meaning you can pay the balance owing in full each month and not be charged any interest; however if you are not able to pay the balance in full then they whack you big time!
You do not want to be paying these sorts of interest rates for any length of time – it’s just too expensive.
A Debt Consolidation Loan Helps You Save
The idea of rolling up all of your credit card balances and other debts into a single debt consolidation loan makes a lot of sense.
One thing is to ensure that the interest on your new debt consolidation loan is less than you were paying, and then be careful not to spread the repayments over a longer period than necessary.
When you consolidate debts into a single loan you need to be saving money and not just racking up more fees … more debt.
A key decision that should go alongside any debt consolidation is to say NO to more debt, and that needs some determination. One tool that we find useful is the budgeting app called PocketSmith which shows you clearly what you are spending and potentially wasting money on. PocketSmith was created by Kiwi’s to help people understand and organise money, and it is now helping people in over 200 countries around the World. We do not get paid to recommend this, but it’s such a great product that we are telling people about it all the time.
We Can Arrange Loans For You
As finance brokers we have access to a range of banks and non-bank lenders that offer debt consolidation loans.
If you have a property then a top-up on your mortgage will probably be the best option. Adding another loan into your mortgage may seem wrong as you are trying to pay off your mortgage, but by applying the same repayments to a loan with a lower mortgage interest rate means you can pay the debts off a lot faster leaving more money for you to then apply to reducing your mortgage.
If you do not have a property then you will need to get either a loan secured over a vehicle or an unsecured debt consolidation loan.
Loans secured over a vehicle are more expensive than mortgages, but still cheaper than most credit card debts.
Unsecured loans are generally more expensive again, but we do have access to some very competitive rates – often over 3% cheaper than what the main banks are charging.
