A long term solution to debt for New Zealanders
Debt has become extremely prevalent in many households in New Zealand.
This new way of life brings a lot of strain on a family and the best thing you can do for yourself, your loved ones and your financial situation, is to consolidate your debt with one of many available personal loans.
If you’re struggling with debt in New Zealand, let us help you choose from a range of debt consolidation loans so you can take control of your finances. It’s time to regain control of your finances and it’s a tough thing to take on when you have numerous lines of credit that you are paying off each and every month. The interest rates are higher, the management is tiresome and complicated. The best solution to take away all the aches and pains and in fact, save money, is to simplify your life with a debt consolidation loan.
Lending institutions are on your side when it comes to offering this product on the market because they understand how difficult it is to climb out of the debt trap once you are in it. Private lenders alike, have flexible long and short-term loan products to suit your wallet and your situation.
What is a consolidation loan?
Most individuals have a few accounts that they pay off every month from upfront credit that they applied for. You probably have a credit card for emergencies, a few clothing accounts to buy clothes your kids and yourself occasionally, a home loan, and maybe even a personal loan that you took out the one time you really needed that large amount upfront for your child's college degree.
The problem is that all these loans have varying interest rates, varying charges and is overall an admin nightmare! There is an easier, more convenient and far cheaper way to manage your debt!
A consolidation loan is where the lender takes all your outstanding debt and converts it into one loan amount with a newly designed contract, interest rate figure and term of repayment. The creditors are all informed of your financial situation and that you have chosen to consolidate your debt. They each have an agreement with the debt consultant that has arranged this consolidation loan for you. Now you’re in for an improved interest rate and saving, all the while slowly settling your debts!
The lender you have chosen to take the loan with will negotiate a repayment amount that satisfies your creditors and suits your affordability. Creditors are happy with this choice because they are guaranteed to receive a monthly payment that they can rely on monthly.
Am I a candidate for debt consolidation?
You might not be aware how dire your situation is. There are a few questions to ask yourself to determine this. Are you currently struggling to make ends meet with your scheduled repayments on your personal, short-term or payday loans each month? Is there very little to no disposable income left after expenses are met? If this all sounds familiar to you, then you are definitely a candidate for a debt consolidation loan.
The other determining factor is just how over-indebted you are. It will assist in figuring out which loan type is best. If you apply for a loan and the lender finds that your debt is still somewhat manageable, you could be referred to a debt counsellor. They will guide you in the right direction to resolve your debt before taking on a consolidation loan. Ways that restructure your budget and spending habits.
Are there steps I should take prior to applying for this loan?
Yes, and the first step is to source a reputable lender for your loan. Remember that this lender must suit your needs. You should also choose someone that you are comfortable with and whose company policy you agree with and relate to.
The number of lenders in New Zealand that offer in-store and online loans is endless. Get out there and do your homework on the lenders available to you. Make sure that you are considering rates, fees, and conditions of the lender. Make sure that they are registered lenders and abide by responsible lending rules. This is vital. If a lender doesn’t have your best interests at heart, you could land yourself up in even more debt.
After finding your most ideal lender by using a loan comparison site, the next step is to get down to scheduling a sit down consult with them about applying for a loan. A registered debt counsellor at the firm will assist you through this process.
What exactly does the debt counsellor do for me?
They go through and consider all of your financials to assist in drawing up a proposed agreement for each of your creditors. This agreement is drafted for approval ahead of the time, so that once the debt consolidation loan is approved, and a singular repayment is now determined, then at least all parties are happy and in agreement with the terms and conditions of the loan.
Each month going forward, you are liable for a monthly repayment on an agreed date with the lending institution. This new monthly repayment is a huge reduction on what you were paying when you were paying them all separately. The best part is that you are not only paying less per month, you’re even saving as a result of the lower interest rate.
Applying for a debt consolidation loan
If you’re over-indebted, this loan provides financial relief and helps you regain control of your financial situation. With fewer payments comes fewer problems.
There are a number of ways to settle debt and a number of loan types out there. But there aren’t options and products that suit multiple debt payments the way a consolidation loan suits the situation. Not only are you sorting your life out repayment to repayment, you’re even receiving quality advice on how to budget in the future so that you don’t land up in the same situation later down the line.
If you go online now, you’ll find lenders that have online application forms for you to complete and submit for approval. Typically, a reliable and registered debt counsellor will contact you and schedule a time to see you to discuss the way forward and help you determine if debt consolidation or debt counselling suits your situation better. Whatever you do, deciding to take the first step is the biggest step of all.