If you’re looking for a way to manage your finances easily and without stress then debt consolidation loans may be able to help.
While paying off multiple loans is not unusual, debt consolidation is a good move if you’re struggling to manage. You might have too many repayments on the go at once, or you could be feeling like there is no light at the end of this long and windy tunnel. At Safrock we specialise in finding you the best deal for your individual situation. Read on to find out how applying for debt consolidation loans with Safrock could potentially help you!
What are debt consolidation loans?
Consolidation loans are essentially personal loans that you use to pay out all other existing debts so that your repayments are rolled into just one. This makes your debts easier to manage and will give you a definitive end date.
Why get a debt consolidation loan?
Sometimes, debt consolidation loans are referred to as credit card consolidation loans. This is because they are often used by people needing to combine multiple credit card repayments into one.
So, let’s imagine for a moment that you have three outstanding debts:
- A $1,000 credit card
- A $3,000 personal loan, and:
- You have about $6,000 left on your car loan.
You owe $10,000 in total, but this is to three different financial institutions.
You are only meeting the monthly minimum of the credit card. At this rate, it is going to take you months and months to get rid of it. To make matters worse, the interest-free period has now ended on your credit card. Your repayments are no longer breaking even and your debt is now increasing!
Your smaller personal loan takes direct debits from your account every fortnight. These repayments come out of your account in between your pay weeks, but they’re quite low and easy to manage. However, the end of your loan term is not until well into next year.
Finally, the remaining amount on your car loan is debited from your account every week but you still have just over two years left on your loan. Your car is starting to get old and you know it’s losing its value.
Laying it out like this is enough to cause a sweat! It’s easy to see how someone in this situation might need the help of a personal loan for debt consolidation.
So let us help you do something about it!
How do consolidation loans work?
Debt consolidation loans are really just online loans to pay off loans. The easiest way to do this is to take out one personal loan and use the funds to pay off the credit card and the two other loans. This type of personal loan consolidation means you’ll only have one repayment to juggle. Better yet, you can usually choose to pay weekly, fortnightly or monthly so that it suits your pay cycle.
It is also a good idea to take out a personal loan for debt consolidation because the interest rates can often be lower than that of your existing credit cards. Meaning not only can you get rid of your debts quicker, you can also potentially save a lot of money in interest.
Who can get consolidation loans?
Anyone who is trying to juggle multiple repayments should consider a debt consolidation loan.
If you are able to provide us with proof of the following, you are just a few steps away from saving yourself from snowballing interest and multiple repayments;
- 100 points of identification,
- Contact information,
- Internet banking credentials,
- myGov account details (if applicable),
- Employment information, and finally
- The registration, make, model, transmission, fuel type and other general information about your asset
Debt consolidation is also a good sign for future creditors. It shows lenders that you have the financial responsibility to take control of your repayments, and that you have the ability to meet the terms of your new personal loan. As long as you make your payments on time without missing one, lenders will look upon this favourably and can increase your chances for future approval.
If you’re searching for ‘debt consolidation loans for bad credit online decision’ then we may be able to help. The lenders we partner with also understand that your credit rating might not be perfect to begin with. As the lender-finder, we do not perform credit checks but some of the lenders might. This doesn’t mean your application will be automatically denied though. Many lenders really just need proof that you can afford to keep up with your repayments. There is a chance that you could be approved for debt consolidation loans bad credit.
Tips to how debt consolidation loans can help my credit rating!
We cannot offer guaranteed debt consolidation loans bad credit. However, following some simple tips can ensure a debt consolidation loan is doing everything to help your credit rating into the future.
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Consolidation loans for bad credit can be positive, as long as you meet the terms of your loan agreement.
Debt consolidation checklist
As with every financial product, there are things you should consider before applying for debt consolidation loans, namely:
- Interest rate, fees and charges: Compare these three key items carefully to make sure that you won’t be paying through the nose due to ‘hidden’ expenses. Also check the fine print for information on establishment fees, late payment fees and early termination fees.
- Terms: Longer loan terms might seem attractive as the repayments are likely to be smaller, but paying off even a low interest loan over a long period of time will cost you.
- Research the lenders: Even though we do the hard work for you, it’s still important that you do your own research. We present you with the basic facts but you should still do your own investigating too. That way, you can make sure the lender you wind up choosing is really the most suitable for your situation.
Are debt consolidation loans right for me?
We’re glad you asked! What better time than to show you our pros and cons list for taking out a debt consolidation loan with Safrock.
- One easy to manage payment which is helpful for your budget.
- You’re able to set up simple repayments in intervals that work best for you.
- You’ll have an end date in sight!
- You will only be paying interest on one loan instead of multiple debts.
- Rolling all debt into one that is easier to manage can look favourable to future lenders.
- Less paperwork to keep track of which will make tax time and budgeting for bigger purchases much easier.
- You’ll pay much less in fees and charges because you’ve only got one loan.
- You can cut up your credit cards!
- If the interest rate on your new loan is much higher than your old loans, it might make matters worse.
- Some really important information is hidden in the usually ignored small print, such as fees, charges, and high-interest rates. Read up on your lender and fully understand their offer.
- If you over-commit to large repayments, you could find yourself back at square one needing to refinance all over again.
How to avoid needing debt consolidation loans in the future
While it’s easier said than done, avoiding debt stress is as simple as not getting in over your head in the first place. Overcommitting to multiple financial institutions is a sure-fire way to end up feeling a little stressed. Now, this isn’t to say don’t take out loans and/or credit cards, because we know that doing so can help establish your credit rating if you stick to the terms of your loan agreement. It also goes without saying that sometimes you just need to take a line of credit for an emergency purchase.
The most important thing is that you take a moment to pause and ask yourself, “Do I really need that?” Working out a budget that is both honest and viable is such a crucial step that so many young people overlook. It is always smart to be prepared and be aware of exactly where you stand with your finances.
Get into the habit of impulse saving, rather than impulse spending. Try your best to not buy into the culture of buying for the sake of buying, too. If you really want something new, wait two months before purchasing. If you still want it just as badly after waiting, buy it then. By the time you’ve waited there’s a good chance you’ll have enough of your own money saved anyway, and you won’t need to rely on your credit card or one of those ‘pay off over 4 fortnightly payment’ schemes.
How will Safrock help you to consolidate?
If you try budgeting, pausing and waiting to purchase things for yourself and you still feel stressed about getting back your financial independence, we’re here to help.
We are specialists in finding you the best personal loans for debt consolidation. Our online lender-finding service is comparison based, which means we provide you with the key loan information straight up so that you can compare your options and make an informed decision.
All of the loans offered through Safrock are secured. This means that you will be required to put up an asset as security against your loan. While this may sound a bit intimidating if you’ve never had to do this before, it is actually good news for you. Lenders are usually able to offer lower interest rates as a saving to you as they are guaranteed they will get their money back. It can also be more of an incentive to make sure you never miss a payment so that you car is not repossessed.
Delivering your dosh dreams
You could get an online decision for your debt consolidation loan, even with bad credit, in potentially just a few minutes. Simply click “Apply Now” from any page on our website to get started with our simple three-step process. Have your basic documentation ready to hand over to us, and be prepared to provide further information should your chosen lender request it.
After all is said and done, paying off your debts quicker is a positive move for your credit rating, your pocket, and your future. Don’t hold off any longer! Get started with your debt consolidation journey today!