Debt Consolidation

Debt Consolidation Tips

Once you've set up your debt consolidation loan and have a plan to pay it off, there is a range of ways to help you stay in control:

1. Make extra repayments on your loan
2. Use your credit card sparingly, if at all
3. Clear the way with a budget
4. Make your savings work
5. Keep an eye out for opportunities

1. Make extra repayments on your loan

Once you've consolidated your debt, by making extra repayments you could save on interest and significantly cut down the length of your loan. Use the Repayment Calculator to find out examples of how much interest and time you could save by entering different extra repayment amounts. With a GE Money Debt Consolidation Loan, you can make additional repayments at any time without being charged a fee^.




So repay a little more each month if you can afford it; or if you come into some extra money (such as your tax return or a bonus at work) consider putting some of it towards your loan repayments.



2. Use your credit card sparingly, if at all

A debt consolidation loan has a fixed loan term and repayment amount – so at the end of the loan term, your debt will be totally repaid. On the other hand, if you only make the minimum monthly repayment on your credit card, it could take years to pay off and you would be paying interest all that time.




Making credit less accessible gives you time to think about whether you really need something before you buy it. It will also encourage you to save up for the things you really want. Once you've completed the budget planner you'll know how much you can start saving each week, fortnight or month, because this is outlined in the 'surplus' section.



3. Clear the way with a budget

Whilst setting a budget may seem daunting at first, once you start working out the details you'll understand where your money is going so you can take control.




With our simple budget planner you can work through each heading across the top, including your income and all of your expense details. Once you've finished the summary page provides a breakdown of your income and expenses including the 'surplus' so you know how much you have left over to save. We recommend that you print off your summary page and add it somewhere you'll see daily, such as your fridge, so you don't spend more than you can afford each month.



4. Make your savings work

If you have some money saved in the bank, check what rate it is earning – simply shopping around for the best interest rates can earn you some extra cash each month.




If you are being charged more interest on your debts than you are earning after tax on your savings (and you almost certainly will be), use some of your extra savings to pay off your debt instead. Start with the debt that charges the highest interest rate first; and always remember to leave enough funds available for emergencies.



5. Keep an eye out for opportunities

Living on a budget doesn't mean you can't have fun! Look around for cheaper alternatives to what you enjoy doing – such as taking advantage of discount days at places like the cinema or bowling alley, or have a picnic at the park instead of going to a restaurant – then you won't feel deprived.

Once you've made the decision to take control of your debt, stay disciplined about how you use your money. By monitoring your spending and being smart about how you use credit, you'll be on track to becoming free of debt.