Reading time: 2 minutes
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.
Juggling several debts? The quickest way to get out of debt fast is to pay off the debt with the highest interest rate first, such as credit cards or hire purchase. Use our budgeting tool to make a money plan.
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 reach out to the team at MoneyTalks on 0800 345 123, help@moneytalks.co.nz or text 4029. You can even use this service anonymously if you prefer.
GUIDE
Pay-later options can be a helpful way to spread out the cost of something over time with no charges added...
GUIDE
Credit cards are an easy way to pay for things with a quick swipe or tap, but they can be...
GUIDE
‘Consolidating’ debt means taking out a new loan to wrap all our existing debts together and pay them off at...
GUIDE
Understanding your rights as a consumer and as an investor can make a big difference should things go pear-shaped.
GUIDE
We’re getting identified more and more by our credit reports these days. When businesses decide whether to lend us money,...
GUIDE
Debt comes in many forms – credit cards, hire purchase, car loans, personal loans, mortgages, student loans. There's no shortage...