It is easy to borrow money these days – and even easier to get into debt. Don’t give up if you are having trouble managing your debts. There are always options available to you and people that can help.
The first thing you need to do is assess your current situation and get an idea of the size of your debt. This can be difficult to face, however, you need a clear picture of your circumstances to work out an appropriate plan of attack.
Once you have an idea about your overall financial position, you can start looking at options to clearing your debt. Depending on how much and what type of debt you have, there could be a couple of options available to you. As an example, you could start by:
Using ASIC’s MoneySmart mortgage, credit card, and personal loan calculators you can work out how long it will take to clear your debt and also how small extra repayments can make a big difference in reducing the money you owe, the interest you will pay, and the length of time required to pay it off.
If you have multiple sources of debt and are struggling to keep track of when payments are due it may sound like a good idea to consolidate or refinance your loans. While this can result in lower fees and interest for some people, it may only be a short-term fix for others, especially if they can’t meet the repayments on the new loan.
If you feel your debts are spiralling out of control there are some places you can go for help and guidance. If you haven’t done so already, speak to your lenders about your situation and then seek financial counselling and free legal advice if required. If you urgently need help with living expenses, such as food or accommodation, there are charities and community organisations that can help you through a rough patch.
When it comes to getting on top of debt, the most important thing is to act quickly and get started. Assess your situation and consider your options that will work best for you. By taking charge of your money, you will ease money stress and feel more secure and in control.
Australian Securities and Investments Commission