February 2, 2021 · Last update: 31/05/2022

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How to Get out of Debt Faster with Personal Loans in NZ

The longer you take to pay off your debt, the more it builds, thanks to the interest you pay on a loan. Unfortunately, this can leave many people in a cycle of debt that can be extremely challenging to climb your way out of. Keep reading for tips and tricks for getting out of debt faster.

Make A Plan

If you don’t know how you’re going to get out of debt, the first step is to sit down and make a plan. Listing out your total debt and how much you owe on each personal loan can feel overwhelming but knowing the amount you owe is the only way that you can start to tackle it. So, write down every total owing and the interest you are paying on each loan. Most people have multiple debts such as credit cards, a car loan, home loans, and more. Make sure that you write down each one, no matter how big or how small it is.

Make a Budget and Stick to It

One major reason why so many people find them in over their heads in debt is that they don’t have a budget. Deciding ahead of time how much you want to spend on groceries, entertainment, and other expenses is one of the best ways to change your spending habits. It also helps you to see where your extra money is disappearing to each month. For many people, their extra income goes towards eating out or takeaways. So, decide how much you’re willing to spend on those types of things and stick to it.

Pay Your Bills Automatically

Thanks to the internet, it’s now easier than ever to pay your bills. If you’re still completing online manual transactions each month, it’s time to simplify your bill-paying process. If you have decided to put extra money towards your debt repayments each month, don’t manually perform that transaction. Because when you go to do it, you may choose to pay off less. Having everything come out automatically avoids the possibility of changing your mind.

Pay Off Your Highest Interest Debt First

If one debt is charging you more interest than the others, then this is the one that you need to focus on reducing first. Even if you can only pay off the minimum on your other debts, pay extra on the high-interest one if you can. This might not be your largest debt, but it can quickly become unmanageable due to the amount of interest charged. Some New Zealand personal loan companies charge interest of 40% and more – at these types of rates, it doesn’t take long for your debt to become higher than it was in the first place even though you’ve been paying it off.

Don’t Use Your Credit Card

Many New Zealanders use their credit cards for daily purchases just to rack up the points. While it may be tempting to think that you will pay it off in full at the end of the month, that’s often not what ends up happening. An unexpected expense comes up, and suddenly you can’t pay off the card, so the interest starts building up and up.

Often the points that you accrue on credit cards are of little benefit anyway. Spending thousands just to get a ten-dollar voucher is not a worthy reason to start getting into debt. You might get your coupon, but you’ll be so far in debt by that time that it won’t matter. The amount of people who apply for personal loans in NZ is high, and credit card debt is part of the reason why. You could try getting a personal loan instead of using a credit card. With a personal loan, you apply to borrow the amount you need, and that’s all. There is no extra upper limit where you can choose to spend more and more like you can on a credit card.

Debt Consolidation

One option that you may not have considered is to consolidate your debts into just one large loan. Here at Crester Credit, we offer debt consolidation loans which allow you to get your debts under control. Many people have multiple different debts, each with their own repayment terms and minimum payments. This can make it tough to keep track of, and you may fall behind by missing a repayment. Plus, you are likely to be paying far too much in interest across all of those loans. Apply to roll all of your debts into one with Crester Credit, and you will be charged one competitive interest rate, with one regular minimum repayment. This can make it far easier to get your debts under control.

Borrow From Crester Credit

Here at Crester Credit, we aim to help our customers in New Zealand to get out of debt, not fall further into it. That’s why we list our rates and fees upfront, so you know exactly what you will need to pay. If you are considering applying for one of our personal loans, use our handy loan calculator first. The personal loan calculator helps you to figure out how much you could borrow, what the repayments could be, and when you’ll have the debt paid off by. 

For more information on our personal loan terms and conditions, contact a member of our team today. One of our experienced staff members can let you know more information about our loans so that you can decide if this is the right option for your finances. Or, if you’re ready to take the first step in getting yourself out of debt, you can apply online now for one of our debt consolidation loans.