A simple financial health check is the first step to a successful year money-wise
The way you manage your debt has a profound influence on your general financial health. There are many products available on the market and it is highly beneficial to regularly shop around to review the rates and fees which are being offered by providers. Something as simple as switching a $300,000 home loan from a rate of 6.50 per cent to an improved interest rate of six per cent will reduce the monthly repayment by approximately $98 and could save you almost $35,000 in interest over the life of the loan.
Another effective method to reduce debt is to increase the level of repayments. If you have the funds, simply increasing the monthly payment on a $5000 credit card from the minimum $100 per month to $500 per month could result in a saving of over $5000 in interest, as well as a significant reduction in the time it takes to pay off this debt completely.
Another strategy may include aligning the term of your debt with your preferred retirement date. By using a debt repayment calculator, you will be able to illustrate the future date by which you could have your debt repaid and by aligning this date with your anticipated retirement date, you will be able to determine whether these debt repayments are able to fit within your budget and form a realistic goal. If not, you may wish to consider reviewing your budget, altering your debt repayments, extending your retirement date and/or mortgage term.