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If you have one or a number of loans, there may be a way that you can better manage your debts. Acumon Financial Services is able to help you with this but here are some top tips for your debt management.
Calculate your debt
It is important that you look at each of your loans and calculate how much overall debt you have. This will be necessary when looking at management strategies.
Create a Budget
Keep track of all of your income and expenses for 3 months so you can complete an accurate budget. This will allow you to see where you are spending your money, where you can cut back and if you can use any additional income to pay off any debts.
Pay off High-Interest Loans First
Try to make sure you are at least paying the minimum required amount for credit card and personal loans as these often have a higher interest rate. If you have a bit of extra income, make extra payment on your highest interest loan. Remember that generally (depending on the set up of your loan), the more you can pay each month, the less interest you pay, and the sooner it is paid off!
Pay off Smaller Loans First
Another strategy you may take is to pay off smaller loans first. This will give you a sense of achievement and will allow you to have once less payment each month that you need to worry about.
Combine your debts
If you are able to get a personal loan with a lower interest rate than your other loans, it may be an idea to use this personal loan to repay all your other debts. This means you only have to make one payment per month and you will save on interest.
Redraw on your home loan
If your bank allows it, you could redraw on your home loan to pay off your credit card and personal loans. Since home loans usually have a lower interest rate, this will mean you pay less interest overall.
Please remember that this information is of a general and preliminary nature only and has been provided without taking full account of your objectives, financial situation or needs. For personalised advice, please book an appointment with Acumon Financial Services.