Paying off debt | Tips to manage your debt - NAB
Work out what will work best for you
A big part of managing your debt is understanding your financial situation. This means looking at how much money you’re earning or have coming in, as well as the costs you have in life (like your bills, rent or other financial obligations). The Spending tool in NAB Internet banking and the NAB app can help break down where you spend your money and our tool, Upcoming can give you a predicted view of what bills and subscriptions may be coming.
See if your repayment date suits you
Look at the frequency of each payment on your loans and find out whether that can be changed. Perhaps you make repayments monthly but get paid fortnightly. Changing your repayments to match your pay cycle could help you manage better.
See if you can increase your repayments
Knowing how much of your money goes towards your debts will help you make decisions on how much more you might be able to repay. Increasing your loan repayments, or making additional repayments, will reduce your balance and interest payable so you can pay the loan off sooner.
See what extra funds you can use
If you have money saved, you may prefer to use that money to pay off a portion of, or all of, your outstanding debt.
If you have a variable loan and have previously paid extra, you may be able to redraw those funds to pay off another debt if it’s a higher financial cost to you.
Debt consolidation vs balance transfers
Consolidating your debt means taking out a single credit product to pay off all the debts you currently have. This could be with a new credit card or personal loan that allows you to manage your debt more easily and potentially pay less fees and interest.
| Credit card balance transfer | Debt consolidation personal loan | |
|---|---|---|
| What is it? | Credit card balance transfer Move existing credit card debt to a new card | Debt consolidation personal loan Combine multiple debts into one loan |
| Interest rate | Credit card balance transfer It depends on the credit card you choose – look for balance transfer offers with introductory rates. After the introductory period ends, the cash advance rate will apply to any remaining balance | Debt consolidation personal loan Could be lower than a credit card, and you can choose fixed or variable rates |
| Fees | Credit card balance transfer Annual fee | Debt consolidation personal loan Application and monthly fees |
| Repayments | Credit card balance transfer Monthly, with no fixed term and the ability to transact up to your card’s credit limit | Debt consolidation personal loan Weekly, fortnightly or monthly with the loan to be repaid over a fixed term |
| Type of debt | Credit card balance transfer You can only transfer debts owing on other credit cards | Debt consolidation personal loan You can consolidate different types of debts including personal loans, credit cards, store cards and more. |
Learn more about credit card balance transfer offers and personal loans for debt consolidation. Use our debt consolidation calculator to see if you could reduce your repayments.
Learn more about the benefits of consolidating your debt.
If you’re not sure if a credit card or personal loan would work better for you, you can read about how they work to help make a decision.
Think you might miss a home loan repayment?
If you’re in financial difficulty, please get in touch with us as soon as you can so we can discuss your options.
Debt consolidation guides and calculators
Need a bit more information before deciding if debt consolidation is right for you? We have some helpful calculators and articles that can help.
Debt consolidation calculator
Understand how your repayments could change by consolidating your debts.
What is debt consolidation?
Learn how debt consolidation works, and how consolidating your debts could help you save on fees and interest.
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The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.