Seek debt counselling to improve your financial wellbeing.

Maybe you had not planned for the repayment of the loan. It is also possible for adverse circumstances in your life such as loss of employment income to affect your ability to pay back.

There are also some Australians who fall into a debt trap by borrowing more money to repay existing debt.

Debt counselling as a solution

One of the most effective methods for getting out of debt is the use of debt counselling services. A debt counsellor is a specialised financial advisor who provides assistance with debt repayment and budgeting. With professional help, you will be able to repay your debt without experiencing any difficulties and without major spending restrictions and get in control of your finances.

One of the major roles of the counsellor is to assist you with negotiating more flexible repayment terms with your micro lender. You can secure extension of the loan term, postponing of the repayment or both. It is also possible to get a lower interest rate.

Depending on your situation, the counsellor may recommend debt consolidation. You can be certain that the professional will offer an effective and affordable solution.

Benefits of Debt counselling

It is perfectly possible for you to pay back what you owe to lenders. It is all about finding the most effective strategy for doing this. This is where the debt counsellor comes in. When you work with an experienced specialist who has an excellent achievement record, you will get an effective solution which is specifically tailored for you. You will adopt a plan for repaying debt which matches your income and financial needs. You will be at low risk of default and possibly get a higher income left to spend during the month. The professional will help you with preparing a budget and adhering to it.

This will help you to avoid financial difficulties in the future and manage your money better.

Start by meeting the Debt counsellor in person

You should be able to explain your financial situation and provide as much relevant information as possible. It is best if you bring copies of your payslips, bank and credit cards statements, loan documents and any letters which you have received from the bank regarding debt repayment.

You should not hesitate to ask questions which are important to you.

The specialist will use the information provided by your and the details present on your credit record in order to analyse your current financial situation, your needs and your position as a borrower. This analysis will enable the expert to produce the most effective strategy for resolving your existing debt problem and for managing your finances in the future.

Two main types of Debt counselling in Australia

The free services are provided by community legal centres, other specialised community organisations and some government agencies. They are found in virtually all parts of the country. It is possible to get support over the telephone as well as in person. When you use a free service, you have to be aware of its limitations. The main one is that you cannot select the professional to work with. 

With paid debt counselling services, you can choose which expert to work with. You can select a professional based on factors like experience, educational background, level of specialisation and achievement record.

You have to check how much the service will cost you and when you will have to pay the fees.

How to Manage your Debt

There are different methods for getting rid of debt and there is no such thing as one size fits all. That is why the debt counsellor who you work with will analyse your individual situation to propose the most suitable strategy.

Take a closer look at the main options which are available to you.

Through negotiation with the lender, the counsellor can secure a repayment structure which matches your current situation and which is affordable for you. Many lenders are willing to show flexibility as getting their money back through using debt collection services or legal means is more expensive and time-consuming.

Debt consolidation can also be a solution to the problem. With a consolidation loan which is secured against your home equity, you can make just a single monthly payment. The payment will be much lower compared to the total amount which you currently pay to creditors every month. This will leave you with more cash to spend and provide considerable financial relief.

Credit card debt can be wiped away with the use of a 0% interest credit card. The outstanding balances on all of your other credit cards are transferred to this one so that interest payments are eliminated straight away.

You have to ensure that you will be able to pay back what you owe before the interest-free period expires. Typically, it is from 6 to 12 months.

Choosing a Debt Counsellor

You should take the time to select the right debt counselling service for you. You should ask around to get personal recommendations as they are typically highly reliable. If you have any friends or acquaintances who have overcome their debt problems with the help of a particular specialist, you should definitely get the name of this person. It pays off to research and compare different services online as well.

It is always best to meet the counsellor in person before making a final decision on whether to use their professional services. You would want to work with a specialist who has extensive experience and who has helped many people get out of debt. Education is important as well. You should find out more about the negotiation skills and communication skills of the professional and about their experience in working with lenders.

You should prepare a list of questions which you find important and ask them.

A good counsellor will provide an overview of the different options available and explain how they can work our rather than promising to resolve your situation with a magic wand.

You will definitely benefit from using Debt counselling

It will help you to get out of debt, regain your financial freedom and enjoy stability.