It’s almost impossible to turn on the radio or television without seeing an advertisement for home equity loans (sometimes called second mortgages or home equity lines of credit). These companies promise to consolidate your credit card debts and other debts into a single low monthly payment. These offers sound tempting; after all, who doesn’t want to lower their payments each month?

The truth is that home equity loans can be helpful in cutting some peoples monthly bills, but they are not for everyone. To know whether a home equity loan is a good choice for you and your family, it’s important to understand the pros and cons of using the equity in your home for debt payment.

The biggest reason why many people use home equity loans to pay off debt is because they can result in a lower monthly payment. This is due to two major factors First, provided that your credit score is in good shape, home equity loans typically offer lower interest rates than many credit cards, so you end up owing less interest each month on your outstanding balance. Second, lending companies usually allow you to stretch out your payments over a longer period of time. While credit card companies usually want their money faster, lending companies often allow you to payoff debt over 15 or even 20 years By stretching out your payments over many years, you can lower your monthly payment considerably.

Another way that home equity loans save money in the short term is through a tax savings on the interest you pay throughout the year. Just like any home mortgage, when you pay interest on a home equity loan, that interest becomes a tax deduction that can result in a substantial savings. Interest paid on credit cards is not tax deductible. Finally, many people seek out home equity loans because they help to simplify the bill-paying process. If you are paying several credit card bills each month, it can be difficult to keep track of the different invoices and due dates, which can result in late or missed payments. For those who find that they are losing bills or accidentally missing payments, it can be helpful to have all of their debt consolidated into one simple payment.

As wonderful as these positives are, however, a home equity loan may not be the right choice for anyone who is uncertain about their future income or who may not be able to make the monthly payment on a home equity loan. Just like a regular mortgage, a home equity loan is secured by your house and surrounding property. If you missa payment, the lending company can foreclose on the loan. This means that they could set in motion a legal process that could result in your losing your home. Therefore, if you are not certain that you can make each monthly payment on time, it’s best not to consolidate your debt byway of a home equity loan. After all, credit card companies can ruin your credit if you miss a payment, but barring some really strange circumstances they won’t take away your home.

Other articles by this autor: music teacher job description or public relations specialist job description

It is often said that necessity is the mother of invention. This basic principle means that many of mankind’s greatest achievements have been born out of our biggest predicaments. Therefore, in harsh economic times such as these, many people are coming up with innovative business models, finding new ways of solving old problems and crafting ingenious ways to turn a profit.

Unfortunately, just as the rain falls on the just and the unjust alike, criminal groups are just as likely to up their game in pressing situations as legitimate organizations are. As a result techniques for credit card fraud are becoming more and more advanced, responding to technological developments and policing techniques in order to get access to your money.

Despite this, preventing credit cards fraud can be incredibly simple. Here are some of the most effective ways to secure yourself against the fraudsters;

Check Your Statements Regularly

The first step is to check your statements regularly to check for any activity you believe doesn’t add up. Don’t remember making a purchase? Check your receipts for the month. It can be annoying to store these, but it is the best way to verify whether you made the purchase or if it was somehow done with a cloned card.

You may be thinking that if the transaction is so forgettable that you can’t remember if you actually did it or not, then its unlikely a fraudster would have gone to the trouble of making it.

Whilst it’s true that many criminals, would simply withdraw as much cash as possible the moment they got access to your funds, there are those who play the long con. These guys will only spend small amounts on a clone card, from areas in you local vicinity (in the knowledge the credit card companies and banks will notice large transactions in unusual places), in the hope that you won’t notice. This way they can bleed you slowly without the card being cancelled, so be sure to check statements thoroughly.

The quicker you cancel a card that you have lost or noticed unusual behaviour on, the quicker you reduce the chance of anyone illegally getting hold of your money.

It’s a good idea to have a customer service number jotted down that you can call to cancel a card immediately if you suspect a problem.

Never Let Your Card Out of Your Sight

If, in a restaurant, or any other point of sale, someone tries to carry out a transaction using your card, insist it be done in front of you. This is especially important abroad, where it is a common scam to take a tourists card from a restaurant and clone it.

Beware that a criminal only needs a photo of the details on your card and the information is just as valuable to them as if they has the card itself.

With all the technology that comes with mobile phones these days, almost everybody has some form of camera on them. It’s just as important not to leave your card in someone else’s sight as it is not to let it leave yours.

Limit Your Overdraught

People often do not realise the size of the overdraught facility that comes with their bank account. This amount can range from $500 to $10,000. It’s normally unadvisable to have a big overdraught anyway as you’ll be tempted to use it, and it’s never fun to owe money. Another reason is that, even if you never use it, a fraudster will gladly help himself to the full amount.

Ideally your bank will foot the bill if you are the victim of fraud, but the less money fraudsters are able to get at, the less risk there is to you. For the same reason it can benefit you to split your money between different accounts.

If you do split your funds between accounts, only take the cards you are intending to spend on out with you on shopping trips.

Don’t Leave a Paper Trail

Remember to shred documents such as bank statements, credit card bills, tax documents and credit card offers, all of which could be of use to a fraudster, before you throw them out. Likewise, ensure you fit a lock to your mailbox, to stop fraudsters getting to the personal details that lie within.

You should also take care not to freely give this information away. If you use social networking sites you should be aware of your privacy settings. Don’t allow fraudsters to piece together the information they need to assume your identity.

Never Sign a Blank Credit Card Receipt

If you’re presented with a credit card receipt that doesn’t have the amount written on, don’t sign it, or, if you prefer, cross through blank spaces or write $0 in any gaps on the slip before you give them your signature. If not you never know what might get added before it reaches your credit card issuer.

Don’t Fall for Phishing

If you receive an email which provides you with a link and asks you to provide any of your financial or security information, do not fill it out, regardless of who it appears to be from. Banks and other legitimate companies will never ask you to supply information in this way, yet it is a common technique imposters use to gain access to your details.

Anti-virus software can be a massive help in letting you know if a webpage on which you are being asked to enter sensitive information is secure or not, but you should also follow your gut in only using a website you have reason to trust 100%.

Excessive adverts and pop-ups are always a hint that a website may be linked to a scam. Another sure fire indicator as to the legitimacy of the website is whether or not it has a secure connection. On these pages the web address will start “https” rather than “http”. If that ‘s’ is missing then the page is not secure.

Jason Henderson is a personal finance aid to many people in his local community and doles out some other serious credit advice on his FinanceNet blog.

When it comes to buying a home the real dream of most prospective purchasers is to eventually clear the mortgage and own their home outright. Consequently at a time when everyone is particularly aware of not getting themselves into too much debt and the importance of making sure they are not encumbered with debts for too long a number of people are now looking into the possibility of shorter mortgages when they buy their homes. The reason for this is obvious. If your aim is to lower your mortgage and get debt free as quickly as possible and to own your home outright, whilst paying as little interest as possible, then shorter mortgages seem ideal. If you’re making larger payments then your principal is falling at a quicker rate and you can clear the mortgage in half the time that it might take on a thirty-year mortgage.

A fifteen-year mortgage sounds very tempting. Who wouldn’t want lower interest rates and a quicker repayment schedule? Indeed, just choosing a fifteen-year mortgage can mean you save tens of thousands of dollars. But you need to be very certain of what you are doing. Before you decide to sign up for a shorter-term mortgage you need to consider a couple of things. Firstly, remember that if you sign up to a fifteen-year deal you will lose a degree of flexibility.

Your first compromise will come when choosing your house – for a fifteen-year mortgage you’re going to need to either sign up to a larger repayment schedule, or buy a smaller house. If you have a house that you absolutely love and the choice is between the two kinds of mortgage then clearly you’re going to pay a lot more money every month if you opt for a fifteen-year deal. But you will be locked into that deal and you need to be absolutely certain you can keep up those higher repayments for a long, long time.

What happens if your job doesn’t work out, or you end up earning less money? What happens if you have children, or if you find yourself short when it comes to their school fees? If you’re worried about such scenarios (and you should be) then a thirty-year mortgage is probably for you. A thirty-year mortgage gets you a larger home for the same payment, or gets you the same home for smaller payments. If you’re planning to live there for a long time and not looking for a fast turn around or profit then clearly this is the best option, particularly if you are planning on having children. If you wish you can overpay as if you had got the fifteen-year mortgage, but revert back to the normal 30 year schedule when you need to tighten your belt.
Obviously the main advantage of a fifteen-year loan is that you will clear the mortgage quicker. If you are in a well-paid job and have significant job security and a great deal of savings then it is worth considering. The idea of owning your own home in thirty years time seems almost too far away and a bit daunting, but fifteen years sounds manageable. And the prospect of owning your own home while you are still young (ish) is also one that is worth working towards. But, and it is a very big but, if you are not absolutely certain of that kind of financial security then you should take a thirty year deal every time.

Alex is a freelance copywriter. He likes to write about cricket and jazz but these days seems to be mostly writing about finance and payday loans.

There are thousands of people all over the world currently trying to trim their spending and draw in their financial horns thanks to the recent global credit crunch and the on-going recession. For most people however that task is made doubly difficult because before they can trim their outgoings they need to clear any debts that they might have accrued when times were better and credit was easier to find. Normally the vast majority of these debts will be credit card and store card related and the those kind of credit card debts unfortunately bring with them high interest rates.

Deciding to clear those credit cards is an important step to getting out of debt, but it is also often extremely difficult to do. Indeed once you sit down and organize all your credit card bills into one place and start calculating how much you need to repay the whole thing can sometimes appear a little bit intimidating. But don’t worry too much. If you follow these five steps you will soon see that after a couple of months everything looks a lot better.

(1) Organize Your Debts
This is the first step in getting yourself debt free and is important. Sit down at a table and collect all of your credit card statements (including store cards) together. Organize them into separate piles and ensure that you’ve included all of your outstanding accounts. Now add up the total outstanding bill and brace yourself, it might be more than you thought!

(2) Calculate Your Repayments
The next thing to do is to work out exactly how much you’re going to need to pay off every month. Firstly, add up the total cost of all of the minimum payments on each card. This figure is the amount you absolutely must pay. If you don’t your debt will go up, rather than down as you will face punishing charges and extra interest as well as seeing your credit rating affected. If you think you wont be able to clear the minimum payment then you should give the credit card companies a call, explain your situation and negotiate a repayment schedule that you can afford. This is a far preferable option than not making your payments, not talking with the credit card companies and ending up with prohibitive charges and the interest piling up. If you can however, see if you can pay off a little more than the monthly minimum on each card as this is one way to clear your debts far more quickly.

(3) Look at Ways to Clear Debts Quicker
The next thing to do is look around on the Internet and see what kind of deals are being offered by other credit card companies. There are normally hundreds of deals around, offering very low interest if you transfer your outstanding balances to their credit card. Many even offer 0% on balance transfers and if you find some of these, snap them up. Either way, select the very best interest rates on the market, for the longest introductory periods (they normally revert to full interest after 6 months) and read very carefully through their terms and conditions to make sure there are no catches you need to be aware of. After this, ensure that you make yourself pay off as much as you possibly can every month. Put every last penny into your credit cards rather than leave savings in the bank. Chances are that you will be paying out far more interest on those credit cards than you are receiving from those savings and high interest accounts. Alternatively see if you can get one large personal loan or home equity loan to clear the debts from all the cards at once. Once again, the chances are that the loan interest on such a loan would be far less than the interest you are paying on the cards.

(4) Clear Cards with Highest Rates First
If you are able to clear more than the bare minimum and have a bit of extra cash to clear more debt, ensure that you clear the card with the highest interest rates. If you have savings, don’t think to yourself that you are doing the right thing by not touching them.

(5) Tear Up All Cards Until You Are Out of Debt
However you clear the debt, whether through gradual, patient month by month repayments or one consolidating loan, make sure that you never ever let them build up again. If you know you are bad with credit cards then get yourself a debit card and nothing else. If you want to save a credit card for emergencies then keep one but tear it up and leave it at the bottom of a draw somewhere. That way you can still use it on the internet or phone but can’t take it out with you and spend freely on it.

Alex is a freelance copywriter. He likes to write about cricket and jazz but these days seems to be mostly writing about finance and payday loans.

Looking for a better mortgage rate?  Then why not think about remortgaging?  Remortgaging means taking out a new loan to replace an existing mortgage, which can be attractive for a number of reasons.  Some people will need to do so as the attractive mortgage rate they have is expiring.

Others may wish to release equity from their home by borrowing additional monies, perhaps in order to repay other debts with a higher interest rate, or to spend on improvements to the home.  Perhaps borrowers have had a pay rise, or alternatively someone in the household has lost their job, and needs to reduce outgoings.  You do not need to move house to remortgage, so it can be a good way to save money, or get a lump sum at a favourable interest rate.

Generally, one of the benefits of remortgaging is to obtain a more favourable interest rate, which obviously reduces the repayment burden each month, which is something many households are grateful for in this economic climate.  Of course, to fully benefit from this, borrowers need to do their homework and investigate the wide range of deals available to them.

The remortgage market can be a complex one, and it is helpful to get some external advice when making major financial decisions.  There are other costs to think about when remortgaging;  you may need to pay an exit fee to the existing lender, for example, plus a new mortgage arrangement fee, valuation fees, and possibly early redemption fees, so it is helpful to have someone walk you through the multitude of options.

The first step when looking for good remortgage rates is to approach the existing lender.  They benefit from the interest being paid on the loan right now, and they might be prepared to improve the deal if the alternative is losing the business.  The credit crunch has made lenders more picky about the business they do though, so do not be disheartened if they refuse.

For example, there are few remortgage deals out there right now for those who want to borrow more than 75% of their homes value, so if that is you, it might be harder to improve your current deal.  The market is slowly improving though; according to the Council of Mortgage Lenders, remortgage approvals in February 2011 were the highest for more than two years.

If the current lender fails to step up to the plate, look around at the wider market.  There are many types of remortgage available, so think about whether you need an interest only or repayment mortgage, for a start.

Most people prefer repayment mortgages because of the certainty that they will pay it off over the agreed time.  Then look at the various remortgage rates that will be open to you, ideally through an independent advisor, as the market is very fast moving and deals change from one day to the next!

Remember to look at the entire cost of remortgaging, not just the interest rate, as this can make the difference as to whether it is worth going through the process or not.  Finally, keep an eye on the market at regular intervals; deals change quickly, so the top deal you get today may be bottom of the pile in six months.

Howard writes for Just Remortgages one of the UK’s top sites for the latest remortgage rates and remortgage deals

OK, so you cannot live without your credit cards. We get that. We understand that they can make life easier for those who can manage them effectively, but as evidenced by the increasing number of credit card defaults, that may be a lot easier said than done.  Unfortunately, many people are quick to jump on the plastic bandwagon without learning the key secret to credit cards: Diligence.

If you are going to allow credit cards to play a big role in your finances, it is essential that you have a system for managing them and, even more important, to know how they work.  If you have ever seriously studied the fine print of a credit card agreement, you know that there are a lot of moving parts, many of which can change on you at any time.  They’re certainly not the kind of financial tools in which you can just set it and forget it.

If you want to ensure that you do not meet the same fate as millions of credit card defaulters, you need to know what it is you are using, why you are using it, and how much you really need to use it.  Then it is essential to be diligent in your efforts to manage them. Anything less and you could find yourself spinning into the spiral of debt.

What You Need to Watch

Your personal debt limit: Your debt limit is the amount that you could comfortably pay off completely within six months if you had to.  Ultimately, your debt limit shouldn’t be any higher than 20% of your annual income, but that is on the high end.  It’s best to set your own limit, a specific dollar amount, that you cannot exceed and then apply your discipline to stay beneath it.

Minimum monthly payments: Your bank may seem like it is doing you a favor by letting you make such low payments. They’re not. They just want to make more money from you. If you get to the point when you are only able to make a minimum payment, you have too much credit card debt.

Fee mania: Banks are getting much trickier with methods for taking your money.  You already know about late payment fees (can’t fault the bank for that), over limit fees, and replacement card fees. Be on the lookout for backdoor fees such as the ones they charge for cash advances and balance transfers. Or, you could be charged a fee if you don’t carry a balance or make enough charges. And, don’t forget the fees some banks charge when you actually want to speak to a real person on the phone. No kidding!

Also, banks can change their fee structure at any time, so don’t throw out the letter they send outlining the changes. Study it, and then ask questions.  You may be better off by canceling your card and going with someone else.

Waiving fees: Some of the fees mentioned could be waived if you simply ask. If you have a good track record with the bank and you incur a rare late payment or over limit fee, it may only take a nicely posed request over the phone. Bank reps are used to this request and are often happy to oblige their good customers.

Your score: Your score, which changes monthly based on your credit activity, is reviewed regularly by your credit card banks that can then change the terms on you if they don’t like what they see.  Be vigilant of your credit report. You can get one free report a year from the credit report companies. It may be worth it to subscribe to a service that provides monthly updates and credit alerts.

The Bouncing APR: While banks are no longer able to boost your rates as a result of your activity at another bank (Universal Default was banned in 2009), they can still raise rates for about any other reason having to do with your activity with them.  Watch your APR each month.  And, be ready to transfer balances to a card with a lower APR.

Managing your credit cards doesn’t have to be a full time job, if you know what to look for and you don’t lose sight of why and how much you are using them.  The diligence required to stay on top of them and stay out of trouble can be applied in less than a half hour each month which is nothing compared to the time you’ll spend trying unravel a nasty financial mess if you don’t.

This is a guest post by Richard Thomas, contributing writer at www.creditdonkey.com.  Visit CreditDonkey.com to unlock the secrets of credit cards by comparing features, benefits and rewards.

Now is a good time to refinance your loan. There are currently numerous refinancing products that are available to borrowers across Australia. Borrowers could now enjoy more options for refinancing, finding the best personal loan possible, whatever their reasons for doing so could be.
A home loan industry body recently revealed that its previous analysis of mortgage applications found that up to 34% of such filings are comprised of refinancing applications. It is quite logical that refinance loan applications would continue to rise so that they could get a greater pie of total loan applications in the future.
How costly is it to refinance a loan? You should realise that refinancing may cost several tens or hundreds of dollars on your part. That is why before you get such a loan, it is best if you would first look at all the possible costs that you may incur for deciding to do so.  Before deciding on anything be sure to see the worst personal finance advice to avoid like the plague.

Typical costs

The major costs you should shoulder for taking a refinance loan could pertain to time and mental pressure. You should spend more on these factors before and during refinancing. It could be difficult, if not impossible to put corresponding dollar figures for these two.
Before you refinance, it would be ideal if you would first spend some time to consider your options. Weigh the pros and cons of refinancing. Would it be to your advantage? Could you save money on doing so? Spend time and effort to take a look at as many refinancing loan products as possible. Do so to make sure you would find, choose, and take the best refinancing products or options available.

Fees and charges

When it comes to fees and charges that come with refinance loan products, there could be significant differences. Such costs could differ from lender to lender or from state to state across the country. Take a look at the figures involved to decide whether refinancing would be ideal for you or not.

An average home loan in the country could be around $215,000. For this amount, the standard refinance cost is about $1,000. The refinance loan products you may be looking at could offer higher or lower fees than $1,000. You could now easily decide which of those would be reasonable. What you should rave about more is that such a cost could be rolled into or within the refinance loan so that you would not be asked to take out-of-pocket costs when you refinance.

Other costs

There are many other costs that come with refinance loan products today. The dollar figures could vary depending on lenders, states, and other circumstances. Do not forget to look at such other costs when assessing refinance loan products. Such costs include registration fees, account fees, loan stamp duty, mortgage insurance, and valuation fees.
You should also look at your old or original loan that you want to refinance. It could come with an early exit or discharge fee. Some borrowers are hampered from refinancing because early exit fees of their current loans are too high that it may not be practical anymore to refinance.

Andrew has been working in the finance industry for several years and he is expert in helping people to refinance home loans

When selecting a rewards card, it is important to consider your situation and lifestyle. The question is not which card is best, the question is which card fits your life best. There are some great rewards cards out there which can amount to a 5% savings on most if not all the purchases you make. The types of rewards offered are different. Some cards offer airline miles, some offer free gasoline, while the ones most universally useful offer cash back. In order to collect rewards, the card must be paid off in full each and every month before the due date. This can be difficult for some people, but if you are sure you are up to the challenge, here are some tips on selecting rewards cards.

• Look for a card that offers 5% rewards: Do not settle for any less than 3% rewards. 1% and 2% rewards are really not very impressive. Shop around with credit card offers to get the best rewards.
• Make sure the rewards are cash back, or something else you can use: Cash back rewards are obviously the best, but gas cards are also universally useful to almost everyone.
• Don’t get a card that offers airline miles if you don’t fly: It takes a long time to add up enough miles to pay for a long trip, and often the airlines have a lot of restrictions which those who do not fly frequently would find inconvenient.
• If you are a frequent flyer, airline miles could be a great reward for you: Be sure to read the fine print to make sure your situation fits the criteria for using the miles, and that purchases required are things you normally buy, at places you normally shop.
• Look for rewards over rates: Don’t worry too much about interest rate since the card must be paid off each month. Go for the best rewards package. However if you think there is the remotest chance you could end up with a balance, consider the interest rates. Maintaining a balance will forfeit the rewards.
• Watch out for late fees: The object of rewards cards is to pay off the bill each month and on time, but it doesn’t hurt to take a glance at the late fees. Being late will forfeit the rewards and will likely result in a substantial late fee. Keep this in mind and be careful to pay on time.
• Read the fine print: There are many stipulations on which purchases pay a given percent. In order to get maximum rewards read this section carefully and shop at participating stores who offer the most rewards.
• Look at minimum purchases: For example rewards for gas purchases are some of the highest and most popular rewards, but if there is a $3000 minimum before the rewards start, consider whether the family uses that much gas.
• Look for maximums on rewards: For example some cards stop paying rewards on gas after the first $300, this would not help anyone. 5% of $300 is $15. That’s not much, especially if there is an annual fee to compensate for.
• Avoid annual fees if possible: Unfortunately many of the higher rewards cards do charge an annual fee. Read and calculate the family’s normal budget to see if it would qualify for enough rewards to compensate for the annual fee.
• Compare the annual fee to the potential value of annual rewards: If it doesn’t look like rewards would well exceed the annual fee this isn’t the card for you.
• Consider your monthly spending budget: While considering annual fees and rewards, please consider the monthly budget and whether you could stay within the budget and still earn enough rewards. Avoid the trap of buying more things in order to get the rewards, only to blow your budget and end up with a balance.
• It isn’t that you are trying to avoid ‘bad’ rewards cards: The ideal rewards program for one person might not fit the lifestyle of another person at all. Match the rewards and the required purchases to your lifestyle for a perfect fit.
• Buy fuel at real fuel stations: Often supermarkets and discount clubs do not fit the requirements to get rewards, or those rewards do not pay at the same rate. Check to see which fuel stations qualify for the best rewards.
• Be aware of the value of rewards: Make sure rewards are actually paying off, and if not switch to another type of rewards card. Possibly the system some cards use doesn’t work as well for some people as others. Keep trying till you find a card that works for you.

This post was written by David, co-founder at Credit Card Compare, who has reviewed many of the top credit cards with rewards on the market for Australian consumers and businesses.

Are you among the numerous Australian consumers who suffer from uncontrolled credit card debts? It is the right time to consolidate your credit cards. Doing so would be wise and logical before you get further and incur a bigger debt. You should act before the trouble gets more uncontrollable and riskier on your part.

You could obtain three major benefits if you decide to immediately consolidate credit card debts. First, you could find and take a lower interest rate. Second, you could manage repayment schedules better. And third, you could improve your credit score or maintain a good credit status.

Getting better interest rates

If you have multiple credit cards that accrue high interest rates, it would definitely be advantageous to switch to low-interest ones. You should consolidate credit card products into one or two multi-purpose cards that offer much lower interest rates. The best way to do so is to take advantage of balance transfer services.

You would have to transfer the balances in your high-interest credit cards into a lower-interest one. Through this, you could stop incurring interest payments on your high-rate cards and clear your outstanding debts in such products. The amount would be transferred into a card that would collect lower rates so you could save on costs. It is advisable to close the high-interest card accounts after. By doing so, you would never take the risk to incur high-interest debts again.

Effective debt management

If you own and maintain numerous credit cards, you are required to keep track of each card’s payment due dates. When you consolidate credit card accounts you own, you would get to monitor just one or two credit card payments. You would not have to go to different banks or payment centers each week to settle balances. This way, handling credit card debt is made more systematic and more organised.

You would surely like the idea of having to pay just one or two credit card debts in a month. As mentioned, doing so would also be an effective way to save on costs especially from interest rates and other fees accrued. You would not have to experience receiving numerous credit card bills at the same time. Your credit card usage and purchases would also be regulated.

Maintain or improve credit score

If you save on costs, you would have more capacity to pay debt obligations. If you manage credit card debts, you could easily get track of your obligations. The result: if you consolidate credit card accounts or debts, you would more likely be able to keep your credit score high or improve your credit rating.

This is because you would lessen the possibility of falling into default. Remember, if you keep too many credit cards, there is a higher chance that you could unintentionally forget paying one on due date. High interest payments would be too costly that you may not be able to repay other credit card dues. Those would equate to negative credit score points. Thus, if you do not like incurring a bad credit standing or you want to keep your credit score high, it is time to consolidate credit card accounts or debts.

Andrew has worked in the finance industry for several years, helping people with low doc loan and business loans

New Year – New You – New Finances!  Now is the perfect time to make your way out of debt and to follow through on that popular New Year’s resolution – ‘get ahead financially!’ As we have embarked into a new decade and are on the upswing of recent economic downfall, instead of continuing to suffer through multiple monthly payments look for other options available.

Debts throughout Australia are highly concentrated in credit cards and personal loans.  For these types of loans the interest rates typically range between 10-30% APR and that can be very difficult to get under control.

There are various ways to manage the debt from the recent Christmas and New Year period.  One of the more popular options is through debt consolidation.  This type of financial assistance takes all of your existing debt, such as credit cards and personal loans and merges them into a single loan with a lower interest rate.  You will be paying one instalment per period rather than multiple.  Additionally, the interest rate will most likely be lower as it’s charged on a single debt instead of many; thereby reducing immediate monthly repayments.

Debt consolidation is an excellent option offering multiple benefits to those trying to stay afloat or to merely get ahead financially, including saving money by reducing the amount of interest paid; reducing repayment periods; improving personal cash flow by increasing disposable income; and saving time through one single easy-to-manage repayment.

Alternatively, many other people who consider consolidating their debts that aren’t struggling to make their repayments, but simply realise they can save money and time by consolidating their debt. If you have real estate property it can assist in repaying the debts also as you’re often able to consolidate credit card and personal loan debts into your home loan, which means you will be repaying higher credit card debts, now back at a lower rate.

Why would you continue paying exorbitant interest rates on personal loans or credit cards, when you can combine your debt at favourable home loan interest rates into your existing mortgage.  Refinancing is the process of paying out your current home loan and debts with a new interest rate home loan.

The advantages that follow refinancing your loan include: lower monthly payments, ability to pay off multiple debts at once, reduced risk by changing from a variable rate to a fixed rate, and the access to additional cash to cover major expenses.  All of these assist you in living a more worry-free and better cash flow lifestyle.

Through both avenues, debt consolidation and refinancing, the major advantage comes from how easy it will become to repay your debts.  The one loan means you will only have to worry about paying interest on one home loan, which is usually significantly lower than personal loans or credit cards, therefore the overall amount of money owed in interest is lower giving you more cash in your pocket.  With the extra cash available, you can increase the amount you pay each month and that could shave years off of your current repayment schedule.  Imagine having your home paid for in 15 years rather than 25 years!