A couple of years ago, I was in a situation that felt all too common—multiple debts from different sources, each with its own interest rate, payment date, and stress attached. There was my car loan, a couple of credit cards, and an old store finance deal I’d almost forgotten about. Keeping up with the payments was like playing a never-ending game of whack-a-mole. Every time I thought I was getting ahead, another bill would pop up. That’s when I started looking into consolidating debt in nz.
What is Debt Consolidation?
Debt consolidation is when you combine multiple debts into a single loan, ideally with a lower interest rate and a more manageable repayment structure. Instead of juggling multiple payments, you make just one, which can simplify your finances significantly.
Why It Worked for Me
One Monthly Payment: Instead of keeping track of different debts, I only had to make one payment each month.
Lower Interest Rate: The new loan had a much lower interest rate than my credit cards, meaning I paid less over time.
Less Stress: Knowing exactly how much I had to pay each month made budgeting easier and reduced financial anxiety.
Things to Consider Before Consolidating Debt
Debt consolidation isn’t a one-size-fits-all solution, and it won’t magically erase your debt. Here’s what I learned:
Check the Interest Rate: If you’re not getting a lower rate than your current debts, consolidation might not be worth it.
Avoid Taking on More Debt: Once I consolidated, I made a strict rule not to use credit cards unless absolutely necessary.
Choose the Right Loan Term: A longer-term loan means smaller monthly payments, but you could end up paying more in interest overall.
Final Thoughts
If you’re feeling overwhelmed by multiple debts, consolidating could be a smart move. It helped me regain control of my finances and work towards being debt-free. Just make sure to do your research, compare options, and commit to staying out of debt once you’ve consolidated.
