Debt Relief

What is debt relief?

Debt relief is a form of financial assistance that is designed to help borrowers reduce their financial commitments. In most cases, debt relief comes in the form of a debt consolidation loan. Such a loan offers the borrower an opportunity to settle outstanding debts or loans.

What is debt consolidation?

One of the toughest things to deal with is having to keep up with multiple debts and loans. Sometimes you even forget due dates and therefore have to incur a fee on late payments. Additionally, late payments can result in you having a poor credit score.

Debt consolidation refers to a process whereby you take out a new loan to pay off most or all of your outstanding debts and loans. This makes it possible for you to get control over your financial situation instead of dealing with the overwhelming demands of paying each debt and loan on its own.

Top reasons why you may need to take out a debt consolidation loan

Here are just some of the reasons why taking out a personal loan for debt consolidation may be an excellent decision.

You want to improve credit score 

A lot of people pay little to no attention to their credit score because they do not think it is something important. However, sooner or later, when they wish to borrow money or open a credit account, they are hit with reality. Your credit score can determine just how much a lender can give you and with what terms. 

A bad credit score often leads to higher interest rates and low borrowing maximums. A good credit score leads to low interest rates and high maximum borrowing limits. Suppose you are, therefore, keen on improving your credit score. In that case, you might want to take out a debt consolidation loan to pay off any outstanding debts and loans that may otherwise reflect negatively on your score and history.

Lower interest rates 

Interest rates are the amounts of money that you are charged over the amount you borrowed. They are often calculated as percentages in relation to the overall amount of money you take out as a loan. When faced with an urgent financial issue, you are unlikely to pay attention to the interest rates charged. 

This can sometimes end up leaving you in a difficult situation because you have to deal with paying high-interest rates. A debt consolidation loan can be key to liberating you from such situations. Such a loan allows you to pay off your outstanding debts, and afterwards, you are free to take out a new loan that offers lower interest rates.

Simplify payments 

Even if you are able to pay off all your loans and debts on time, the process of having to send out multiple payments on different dates can be quite tedious and time-consuming. Taking out a debt consolidation loan helps make your repayments easier. You can easily pay off all your outstanding commitments and then remain with one monthly repayment obligation, which helps free your mind to focus on other important financial issues.

Save on money 

Forgetting to make your repayments can lead to extra charges on certain loans. There are also some institutions that charge higher interest rates when you need a long time to make repayments. By taking out a debt consolidation loan, you are able to avoid certain pitfalls that may cause you to lose extra money.

Types of debt consolidation loans

Below are the two main types of debt consolidation loans.

Secured debt consolidation loans 

Secured debt consolidation loans are those loans that a borrower is given only after they produce any item of value as collateral. This means that you can not take out such a loan unless you have something to put on the line. Some of the things that may be used as collateral include property, vehicle, appliance or land. 

The financial institution that provides you with a secured debt consolidation loan requires you to prove that the item used as collateral belongs to you. You must also remain as the owner of the item until you have cleared all your outstanding debt. In case you are unable to pay your debt, the money lender has a right to seize the item and sell it to regain the money you owe.

Unsecured debt consolidation loans

Unsecured debt consolidation loans are those loans that you are given without the need to produce collateral. These are commonly given by online lenders who simply check your credit score and history and then determine your creditworthiness based on the data that they analyse. Such loans are not only convenient but can be disbursed within minutes or hours after you submit an application.

How does one qualify for debt relief?

Different financial institutions have specific eligibility criteria for their customers. However, Ozzie Loans, which is one of the most reputable online money lenders, requires that you must be 18 years and above, live in Australia and have a stable income.

How can you apply for debt relief?

Before applying for debt relief, it is important for you to ascertain that you meet the eligibility criteria. This will help save your time and ensure that your request is not declined. The next step is to either download the Ozzie Loan app and install it on your phone or go online and register.

The good news is that registration is free and takes up only a couple of minutes. Some of the details you will need to register include your legal name, age and address. The information you provide is always held in confidentiality therefore, you do not have to worry about third parties having access.

Once registered, you can go ahead and use the debt consolidation loan calculator to determine the overall amount of money you need in the form of a loan. Afterwards, you should fill out the small debt consolidation loan request form and submit for review. In most instances, you will be able to receive feedback from Ozzie Loans within just a few minutes. If your loan application is successful, you can expect to receive your online loan into your account shortly.