Debt Consolidation in itself is a loose word. It can be used at various instances. In a laymans terms debt consolidation is a way where you can consolidate all your debts into one on a cheaper interest rate and terms that you are already on.
With a good credit ratings and history with bank, a bit of equity in the property, one should look no further than consolidating debt into a home loan, this way the interest you will be paying is lot cheaper than your average credit card or a personal loan interest rate.
An individual with a bad credit rating or have no way of getting help from any sources including friends and family should look at something like a Debt agreement to pay off the unsecured debts in a manner that is not just affordable but absolutely feasible to one’s budget.
A Debt Agreement is a stage before bankruptcy and helps avoid bankruptcy and with other limitation that comes with bankruptcy. It will combine all your unsecured debts into one and will allow you within your budget to pay the debts off over 3 to 5 years.
Although there are advantages that comes with a Debt Agreement such as paying off the debts based on your affordability (at many instances it is even less than your minimum payments on your credit cards which one cannot afford), the debts are written off at the end of the term. Creditors will not call, harass or even send letters during the tenure of the agreement. The only thing one should be worried about is to maintain one single payment based on the individual’s affordability.
There is a drawback that comes with this type of agreement, the inability of an individual to borrow money whilst in the agreement. It will be listed on the credit file for 7 years, once the agreement is completed, it will be reflected on the credit file.
Debt Agreement can work as a blessing in disguise for someone who is going nowhere with his or her debts but wants to get on top of the debts and have realistic goal of even saving some money to secure his or her own future.
Speak to one of our friendly advisors and get a free assessment. Quote Debt Agreement and call 1300 351 008