The longer we take to pay off debt, the more it costs us. So if there’s room in the budget, it’s smart to put more money towards debt repayments - read on for more tips on how to manage debt.
Here’s how it works.
The Sorted loan calculator can help with crunching the numbers.
Sometimes a bank or other lender can combine several different high-interest loans into one lower-interest loan. (A single payment can be a lot easier to manage than multiple ones, and you could save a lot of money by paying less interest.) This is called debt consolidation. You just need to be aware that repaying a new loan over a longer period could cost more in interest overall. The trick is to keep paying it down as fast as possible – and avoid racking up any new debts along the way.
If it gets hard to keep up with debt, talk to the person or organisation that lent the money as soon as possible. They may be able to work out a new repayment plan. There’s also free advice available through financial capability (budgeting) services - visit the Family Services Directory.