Solutions for Debt and Insolvency-Queensland

The advantages of Debt Consolidation.

A debt consolidation solution can be an effective way of paying off multiple debts. These may be:

Store cards
Personal loans
Credit cards
Overdrafts and many more.

Generally speaking, a Debt Consolidation Loan will allow you to pay off multiple debts and make only one payment per month instead of many and will typically have a lower interest rate than that which you are currently paying.

EZY Debt Solutions can help facilitate a range of debt solutions so that you can combine all your monthly outgoings into one lower, affordable monthly repayment.

We have a dedicated team of debt solutions consultants who can discuss your requirements in confidence in order to determine the best solution for you.

Benefits of Debt Consolidation.

Exchange multiple loan and credit card payments with a single monthly payment:

It can be difficult to pay off a number of different loans each month. Each of your loans, bills and other debts you owe may need to be paid on different days. Organising your finances to pay each of these debts can be complicated. With a debt consolidation solution you will only need to pay one loan on a day that suits you. You can also choose whether you would like to pay your loan back on a weekly, fortnightly or monthly basis.

Decrease your overall monthly commitments:

By consolidating all of your debts into one loan you can reduce the amount you are currently repaying. This is done by paying off all of your current debts in one go and then choosing to repay your loan over a period of time that suits you with repayments that you can afford.

Reduction of rates on high interest credit cards, overdrafts or loans:

Paying back the interest alone can be crippling, for example, credit cards and personal loans interest rates can range from 10-25%.

Reduce your payments without affecting your good credit rating:

If you are finding it difficult to repay your credit cards or loans at the moment, you run the risk of defaulting on your repayments and effectively having this noted on your credit file. By entering a debt consolidation solution to clear your debts, you eliminate the risk of defaulting and affecting your credit file.

Fixed term

You will know exactly when your debts will be repaid.

Disadvantages of Debt Consolidation

Longer repayment period.
A debt consolidation loan will give you the benefit of a lower interest rate and lower repayments. In order to reduce your repayments you will be paying your loan back over a longer period of time.

Security required.
Depending on your Debt level in order to get a debt consolidation loan you may need to put up some form of security against it. Ideally this would be your home. However, if you fail to repay your loan then the lender has authority to repossess your assets.

NB: EZY Debt Solutions is not a lender. We do not provide debt consolidation loans. We can assess the suitability of several debt solutions for those experiencing difficulty with their debts and endorse suitable alternative lenders.

If you can’t solve debt problems on your own, your next step should be to contact EZY Debt Solutions and speak to our Debt Counsellor.

Our Debt counselling service is designed to evaluate your debt and offer personalised advice on your debt options to regain control.

Debt Consolidation Options.

Balance Transfer

This is where you take the balance on one or more of your high interest credit cards and transfer it to a card with a much lower interest rate. You can combine multiple credit card debts onto a single credit card with significantly lower interest, so you only pay one bill each month that is often much lower than what you pay on your debts individually.

To make a balance transfer work successfully, you need to have a strong enough credit rating to qualify for the right balance transfer credit card. If you have extremely strong credit scores, then you may even be able to apply for a card that offers 0% APR on balance transfers for an introductory period. This allows you to lower the balance on your debt quickly, because 100% of the payments you make go to paying off the debt rather than accrued interest.

There are two common pitfalls you need to avoid if you are using this as a debt relief option:

If you do not have strong credit, you will not qualify for an interest rate that is low enough to provide a benefit. If the interest rate is too high, you can actually make your debt problems even worse. If you have bad credit or even fair credit, you may need to consider other options for debt relief.

You must commit to avoiding credit until you pay off the balance transfer amount in-full. With zero balances on your other credit cards, you will be tempted to start spending on credit. However, if you start accumulating debt on these high interest credit cards before you have the transferred debt paid off, you are only increasing your debt burden instead of decreasing it, thus making your situation worse.

Unsecured Debt Consolidation Loan

This is where you take out an unsecured loan and use the money to pay off your high-interest credit cards. With the credit cards paid off, the only debt you have to pay each month is on the loan. Once more, your goal is to get a low enough interest rate to pay less each month but get out of debt faster since the interest does not accrue as fast.

As with a balance transfer, much of your success in making this debt consolidation option work is having the right credit scores to qualify for a good interest rate. If your credit scores are low, you will either not be approved at all or the interest rate will be too high to provide the benefit you need. Again, you can actually make your financial hardship worse if you use an unsecured debt consolidation loan in the wrong circumstances.

Thereto also, you need to be mindful that you are not increasing your debts while you work to pay off the loan. If you use your credit cards before you have the unsecured loan paid off, you are increasing your debt burden rather than decreasing it, and you could end up in worse financial distress than when you started.

Secured Debt Consolidation Loan

The Secured Debt Consolidation Loan option is similar to the Unsecured Debt Consolidation Loan option, but you would take out a secured loan rather than an unsecured loan.

A secured debt consolidation loan is also referred to as a home equity loan because you put your house up as collateral in case you don’t pay what you owe. While you can get a lower interest rate with weaker credit (because the loan is secured). We at EZY Debt Solutions warn to not use this option unless absolutely necessary.

Credit card debts are unsecured debts which means, as much as your creditors can threaten and harass you with collection, they cannot take your home or other assets without a court order, such as a bankruptcy petition.

A home equity loan is a secured debt, so if you fail to pay the loan in-full, the creditor can take your home. The trade off is too great and puts your home at risk just so you can pay off your credit cards.

If you’re considering a home equity loan and need to discuss your options, please contact EZY Debt Solutions to speak with an understanding Debt Counsellor.

We will assess your debts and provide advice on your best options for Debt relief.