Debt Relief – How To Get Help

Don’t let debt consume you. Debt relief can help you get back on track. Modified repayments, debt consolidation, all the way to loan settlements; find out what options and services may be available to you. Reach out for help so you can get on top of your debt today.

Please note, certain ideas and products presented in this article may not be offered by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is debt relief?

Debt is stressful. Not only that, it’s often complicated too.

If you’re struggling to stay on top of your debt, repayments and interest rates then you’re going to need a plan. In short, that’s the purpose of debt relief. It’s about creating a clear path with manageable steps to help you ultimately get out of debt in the not-too-distant future.

While a relief plan is something you can develop yourself, there are also a number of debt management companies that can work with you to develop a plan too. In addition to this, there are a host of debt options that may be available to you.

Given this, there’s plenty to consider. Read on and Monzi will breakdown all the key information that you might need to know. Let’s go.

Australian debt relief options

Debt relief can range from strategies as simple as a budget or payment plan all the way through to more serious measures such as a debt settlement or financial hardship. As a result, there are a host of options that could work for your personal circumstances.

While not it may not be an extensive list, potential options for Australians struggling with debt can include:

  • Budgets and payment plans
  • Modified repayments, interest rates or schedules negotiated with your lender.
  • Debt consolidation or credit card balance transfers
  • Debt agreements and settlements
  • Financial hardship programs
  • Bankruptcy (in extreme cases).

If you’re not sure which is best for you then consider seeking professional financial advice. Specialist debt advisors may work with you to develop an appropriate debt management plan for your financial situation and level of debt.

What are the benefits of debt relief Australia?

Debt can be an incredible source of stress. If you’re struggling with your repayments, it can often feel like there’s no way out. That’s what debt relief aims to tackle.

As a result, one of the main benefits of debt relief is that it creates a plan. A proper program provides clarity by simplifying your repayments or credit contracts so that you have a clear idea of how to manage them.

In saying that, there are a host of other additional benefits too. This includes:

  • More money in your pocket: as your debts decrease, you can put more of your monthly income into your savings.
  • A healthier life: stress is bad for you. Minimising your stress through a relief program can help you sleep better and increase your happiness.
  • Get your creditors off your back: if you repay your debts, you can say goodbye to phone calls from creditors.
  • An optimistic future: a debt-free future can become a reality.

Australia debt relief: what option is best for me?

This will depend on your level of debt as well as your financial situation. If you are unsure about which option is best, it’s never a bad idea to seek the help of qualified financial advisors or other debt management services.

In most cases, to determine which option may be right for you, these advisors will assess your:

  • Your current income
  • Outstanding debts and loans
  • Day-to-day expenses (e.g. rent, food, etc.)
  • Repayment schedules
  • Any other bills or major expenses.

With a full understanding of these factors, a suitable management plan or relief option can be determined.

Debt relief loans

While we’ve already mentioned it briefly, one potential relief option could be to apply for a debt consolidation loan. In short, the purpose of debt consolidation is to streamline your debts to make them easier to manage. Given this, it’s worth outlining the process.

With a debt consolidation loan, you can apply for the amount of debt that you currently have outstanding. If approved, you will receive this amount as a lump sum which can then be used to pay off your current debts. As a result, you are simply left with one loan.

The benefit of this is that rather than having to monitor several debts across a number of credit providers, you’re simply left with one loan. With this, comes only one interest rate, one outstanding balance and one regular repayments. As a result, you’re left with a clear, defined path to repaying your debt.

However, one thing to keep in mind is that before you apply, always ensure that debt consolidation will save you money.

Australian Government debt relief

The Australian Government has developed a number of debt assistance services to help Aussies struggling with debt. From the National Debt Helpline to various financial help websites, there’s no shortage of assistance available.

However, unfortunately, the Australian Government typically does not provide financial debt assistance. As a result, it will be up to you to cover the cost of your debts. With this, implementing an effective debt plan is vital.

So, do your research or seek professional advice to develop a plan that works for you.

Debt relief woman wearing glasses in sunset

Debt relief assist

When it comes to debt, you’re not alone. In fact, there are a number of debt management organisations who may be willing to help you.

Not only can these companies help you develop a debt management plan, they may contact your lender on your behalf too. If you’re struggling to manage your debts, these services can be a life-saver.

As a guide, common services and help that may be offered includes:

  • Assistance to help you create a budget
  • Consolidating your debts
  • Contact your lender to negotiate payment breaks or freezes to help you get back on track.

What is the best debt relief company Australia?

There are a number of debt relief companies who may be able to provide debt management assistance. However, we cannot say which one is best. As a result, you will need to do your own research.

Before enlisting the services of any organisation ensure they have a strong and trusted presence in the market. To do this, check their debt relief reviews and testimonials online to get an idea of past user experiences.

In addition to this, make sure their services are accessible. Do you have to meet them in person or are their online and over-the-phone services available too?

Are debt consolidation loans a good idea?

In short, Monzi cannot say if debt consolidation loans are the right choice for you. If you are looking for guidance, consider contacting a qualified financial advisor. They may be able to assist you to determine if this option is right for you.

In any case, debt consolidations do come with a number of pros and cons. While on a positive note they can reduce your fees, interest payments and stress, there are other factors you will have to consider too.

Firstly, you will need to ensure that debt consolidation won’t increase your costs. In addition to this, ensure you check whether or not you will be charged early exit fees for paying off your outstanding debts early. These fees can add up and may make debt consolidation unfeasible.

Ultimately though, the decision is in your hands. Weigh up the pros, cons and costs to determine if it is a viable solution for you.

Debt consolidation loans calculator

Debt consolidation loan calculators can help you determine if debt consolidation is viable for your situation. In short, all you need to do is enter the features of your loan (e.g. amount and term) as well as your current outstanding debts. Subsequently, you will get estimates of what your repayments and total loan cost may be.

These calculators are offered for free online by a range of financial institutions and lenders. Best of all, they’re simple to use and present all the information in a clear, understandable manner.

However, remember that any figures are estimates only. Use them as a guide to determine if debt consolidation could be an option for you.

Credit card debt relief

Various management plans are available to help you repay your credit card debts. As we’ve already discussed this could include a formal debt agreement or other such programs. However, another option may exist.

With a credit card balance transfer, you may be able to transfer your existing credit card debts onto a single, low-rate card. As a result, you can not only reduce your interest payments but making repayments becomes easier too.

Rather than trying to keep track of multiple cards and interest rates, all you need to worry about is managing one card. That means there’s only one repayment and one interest rate. In short, it can reduce your stress making it a potential credit card debt relief option.

How does a debt relief program affect your credit?

In short, it’s difficult to say. The effect on your credit score can vary depending on the program that you implement.

If your lender implements modified repayment periods which you then stick to (i.e. making all repayments on time) then there may be a positive effect on your credit score.

On the other hand, a debt settlement may have an adverse effect on your credit score. With a debt settlement you must pay a percentage of your outstanding balance as lump sum to clear your debt. Unfortunately, this will be recorded on your credit report as a debt settled for less than the full amount owed and will work to reduce your credit score.

As a result, it’s difficult to say how your credit score will be affected without knowing which debt relief program will be implemented.

Is a debt relief program a good idea?

A suitable program can provide you with a clear path towards repaying your debts. With this, it can reduce your stress and take the complexity out of managing your finances. From this perspective, it seems like an undeniably good idea.

Obviously though, this all hinges on implementing an effective program. There are a number of potential options (e.g. debt settlements or consolidation) so it is up to you to determine which works best for your circumstances.

If you are able to do this then debt relief is often a good idea, not in the least due to the fact that it can make your life so much easier.

Is there debt help available?

Yes.

While we’ve already mentioned that there may be independent companies that are willing to assist you, there are a number of government debt services too.

If you are looking for free, qualified and independent advice on managing your debts then don’t be afraid to contact the National Debt Helpline on 1800 007 007. There you will be able to speak to qualified financial counselors who can help you develop a debt management plan. The helpline is available Monday-Friday between the hours of 9:30am and 4:30pm.

In addition to this, the Australian Government’s MoneySmart website can be a useful debt management resource too. It provides a ton of information on how to manage your money and may be able to instruct you on how to seek financial guidance too.

What does Monzi do?

Monzi is a lender-finder service that aims to pair Aussie consumers with a potential lender. Moreover, our panel of lenders may be able to offer the following personal loans:

Small loan$300 to $2,000Up to 12 months
Medium loan$2,001 to $4,60013 to 24 months
Large loan$5,000 to $10,00013 t 24 months

You should, however, consider your options outside of borrowing new credit, especially if you are in debt. In short, borrowing small amounts of money can be expensive and may not solve your problems. You may even find yourself in a worse financial position than before.

Therefore, please consider the alternative options presented by ASIC.

Factor In

Costs

Two credit cards
Two credit cards

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Loan amount

$2,001 - $4,600

Terms

13 months

24 months

Costs

48% annual percantage rate

67.41% comparison rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Interest Rate for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months

24 months

Costs

21.24% annual percantage rate

48% comparison rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Interest Rate for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.