If you’re finding it increasingly challenging to repay your debt, you’re not alone. Many people find it difficult to make ends meet because of unexpected illnesses, changes in their personal circumstances, or unemployment. Whatever your situation, you need to act promptly so you can be in control of your finances.

To get out of your financial struggles, you must assess your situation, make a list of your debts, and get financial help to find out whether a debt agreement or a personal insolvency agreement is right for you. You might even be better off refinancing your loan or consolidating your debt.

How suitable is your current home loan to your situation?

If you’re unable to repay your home loan, you must talk to your creditors to come to a new arrangement. Find out if you’re paying for features you don’t require, shop around for home loan products with lower interest rates, or apply for a hardship variation so you can postpone your repayments for an agreed period.

Refinancing your Home Loan

Refinancing may be a good option if you’ve found a competitive rate of interest. If you come across a home loan product that’s lower in fees or one that comes with better features, you may be better off refinancing your loan. Find out the duration of your current home loan and make sure you don’t refinance to a longer period.

Finding a Better Home Loan

Apart from approaching the banks and financial institutions on your own, you could also use the services of a broker to find a better home loan. They may be helpful in negotiating the terms and conditions of the contract or help you secure a lower interest rate.

If you choose to refinance your loan, make sure you calculate your new repayments to determine how much you’ll be paying over the entire loan period. Find out if your current mortgage has a pre-payment penalty or any other hidden closing costs.

How to Manage your Debt

Prioritise your debts. Your car and home loan payments should be at the top of your list, followed by your unsecured debts like credit card and store card payments. Even if you have refinanced your loan, you still need to make sure you set aside sufficient money each month to repay your new loan. Consider taking up a second job if you’re struggling with debt.

Consolidate your Debts

Lastly, you could consider consolidating your debts (including unsecured debts) into one payment. Some people find that debt consolidation helps them manage their finances better. Remember to calculate the costs you’ll face including interest rates, over the limit fees, as well as late fees.

If you’re falling behind on your mortgage, get debt help so you can save your home. Stay away from refinancers who make you unrealistic promises and take measures to avoid getting deeper into debt.