Practical help with debt NZ

debt consolidation nz

If you suspect that you are heading towards financial issues, seeking help with debt NZ is vital. The sooner you seek help paying debt, the sooner you can bring your finances back under control. Unless you have been forced to seek debt help before, it is difficult to appreciate the mental and physical pressures. These can have a massive impact on your working life and your private life. Thankfully, help is not far away!

When should you look to consolidate debts?

Unfortunately, the vast majority of those struggling with debt tend to bury their head in the sand until the issue goes away. In reality, unless you seek debt help, it is unlikely your problem will change and more likely, it will get worse. Those struggling will know in their heart of hearts that they need to seek help paying debt. The sooner you address the problem, the sooner it can be brought under control.

There are many reasons why you may look towards debt consolidation loans such as:-

• You have extensive debts, and they continue to grow
• Debt consolidation as part of your long-term plans to improve your finances/spending
• Recent improvements in your credit score may qualify you for lower interest rates
• Multiple minimum loan payments are stretching your cash flow

There are other reasons why you may need help with debt NZ, such as medical bills. However, consolidating your debts is a way to take back control and negotiate more favourable monthly payments, even if this means extending the loan payback period.

Is debt consolidation NZ right for you?

As we touched on above, the vast majority of people who require debt help already know in their heart of hearts, even if they continually try to ignore the situation. The problem is that once your financial scenario changes and you are struggling to meet repayments, this can have a knock-on effect on other areas of your life. It is not just the financial problems that need to be addressed because financial issues can impact your private/working life and relationships.

When you see any financial issues on the horizon in a perfect world, that will be the time to take advice about help with debt NZ. The quicker you can address the problem, the less damage to your credit rating and the greater chance of consolidating debt under one loan. However, there will be some scenarios where individuals struggle even with an extended loan period and reduced monthly repayments. It may be best to take additional advice regarding debt repayment plans or even bankruptcy in this scenario.

It will surprise many people how quickly your financial situation can deteriorate by simply missing one loan repayment. If you are struggling, seek debt help!

Pros and cons of debt consolidation

As we alluded to above, there are many issues to consider regarding finances and seeking help repaying debt. While debt consolidation loans give you a greater degree of control going forward, you are likely to experience short-term pain to secure long-term gain. From feedback from our customers, we know that the reduction in mental pressure is immense as soon as you decide to seek help with debt NZ. We will now look at the pros and cons of debt consolidation, which you need to consider.

Pros of debt consolidation

There are many apparent benefits to consolidating debt, but some may not be immediately obvious.

One manageable payment

While we are all different, many of us have an array of monthly financial obligations, which could include any of the following:-

• Mortgage payments
• Rent
• Utility bills
• Medical bills
• Household expenses
• Credit cards
• Personal loans

Common debts can include an array of minimum monthly repayments, which can often stretch monthly cash flow. Consequently, the ability to consolidate debts into one manageable loan with one minimum monthly repayment (usually less than the combined previous minimum repayments) can make a huge difference. In many cases, this can give the individual a window of opportunity to reorganise their finances and get themselves back on their feet.

Revised payment terms/duration

The potential to negotiate improved payment terms is often linked to the duration of debt consolidation loans. For example, your monthly repayments would be greater with a five-year debt consolidation loan than a seven-year duration. You would pay more in interest due to the extended term, but this may be more in line with your finances at the time.

If you look at credit card debt in isolation, this is, in effect, a debt with no fixed repayment date. Many people struggling with their finances can likely only afford the minimum monthly repayment. In this scenario it could take many years to repay high credit card balances. Those who are struggling will more likely be adding to their credit card balance instead of making inroads into their debt. So, switching from an open-ended debt repayment set-up to one with a fixed interest rate and fixed duration can make a huge difference.

On this subject, we will bring up a note of caution. While many people will be keen to repay their debt consolidation loans as soon as possible, you need to be realistic. Negotiating relatively short repayment durations could put pressure on your cash flow and ability to keep up with repayments. If you were to fall behind on your debt consolidation loan repayments, this could have serious consequences. Therefore, it is essential to be cautious when looking at the duration instead of being too ambitious and failing.

Potential reduction in interest rates

The ability to reduce the average interest rate charged on your outstanding debt will depend on your credit rating and financial situation. For example, credit card interest rates are relatively high compared to personal loan interest rates. Therefore, there is the opportunity to reduce the average interest rate compared to your existing debts. As we touched on above, the sooner you take action to address any oncoming financial difficulties, the more chance of negotiating favourable terms.

If you were to bury your head in the sand for six months, you might miss various utility payments and loan repayments. If you then decide to address the problem, the damage may already have been done to your credit rating. Consequently, when applying for help paying debt, the interest charged on debt consolidation loans may be relatively high. On the other hand, if you had applied before your credit rating was impacted, the interest charge would likely have been lower. Simple but true!

On a side note, it is crucial to recognise that even if you can negotiate a reduction in the average headline interest rate, you also need to have one eye on the duration. You may end up paying more in actual interest payments because of the extended loan term.

Seeking debt help to protect your credit rating

As we touched on above, it is vitally important that you address any financial issues as soon as they emerge. For example, while you may currently afford your monthly debt repayments, there may be issues with your long-term employment. Furthermore, in the event of redundancies, it is likely that you won’t be able to afford your current monthly debt repayments. Therefore, it may be in your best interest to reorganise your finances now to give yourself a little more breathing space.

Your credit rating would likely remain relatively strong when applying for a debt consolidation NZ loan while in employment with a regular income. Therefore, extending your loan duration to reduce your monthly payments will reduce the financial pressure going forward. Consequently, your credit rating should be protected as long as you can fulfil your reduced monthly financial obligations. Unfortunately, many people experience unexpected and fairly dramatic financial challenges which don’t always allow time to plan.

Whatever the situation, whatever the timescale, it is vital to protect and repair your financial standing as soon as possible.

Cons of debt consolidation

As you can imagine, there are some downsides when dealing with financial challenges that may involve missing payments. This is why it is vital to seek help paying debt. There are several issues to consider, which include:-

No silver bullet solution to underlying financial issues

Whether you’re looking to head off any potential financial issues in the future, already experiencing the crunch, debt consolidation loans are only part of the solution. To put it bluntly, if you are spending more than you bring in each month, then you need to make changes as soon as possible. For many people, especially those who have passed the point of no return and started missing payments, debt consolidation NZ may be their last throw of the dice.

For example, if you do not adjust your expenditure, then the chances are you will end up in the same situation further down the line. You can only stretch out a consolidation loan so long, reduce monthly payments even if this should ease the short-term financial pressure. Unfortunately, many of those struggling see debt consolidation loans as the silver bullet, the answer to all of their problems.

It is advisable to seek help with debt NZ in tandem with reorganising your finances. This two-pronged approach has the potential to get you back on your financial feet in the medium to longer term.

Increased risk profile may see higher interest charges

As we touched on above, while there is the opportunity to potentially reduce the average interest rate on your debts, this depends on your financial situation. If you have missed payments, then the chances are your credit rating has already been impacted. All lenders should consider an individual’s financial situation and also check their credit rating. In simple terms, the lower your credit rating, the higher the interest rate you will be charged.

This scenario perfectly illustrates the need to address any actual and potential financial concerns as soon as you become aware of them. Leaving it too late could prove expensive!

Additional fees for help paying debt

Here at Alternate Finance, we pride ourselves on offering competitive interest rates and competitive charges. Therefore, if you make repayments on time, then your additional fees would be kept to a minimum. It is only when extra work and correspondence is required, for example, you begin missing payments, that you may encounter additional charges.

We are a responsible lender, and as a matter of course, we will discuss the debt consolidation options open to you together with interest charges and fees. It is in our best interests to align your financial situation with the most relevant debt consolidation opportunities. This will ensure that your repayments are more manageable, your stress is reduced, and you can begin to look to the future with a degree of optimism.


We cannot stress the importance of addressing any actual or potential financial troubles as soon as they emerge. Those who bury their head in the sand, hoping these issues will go away, will likely see a worsening scenario. We are here to discuss the options, offer debt help, deliver an honest assessment of your situation and advise you of the most appropriate path to take. Once you take that first step in addressing your financial issues, you can start to regain control, and you will feel a massive sense of relief.

Mark Benson

Mark Benson, a renowned and astute stockbroker/financial adviser spending the majority of his finance-related career operating in the United Kingdom. With 16 years+ experience in the financial sector. he still maintains a strong interest in all things financial. Over the years, he has written about subjects such as property finance, loans, pensions, insurance, stock market investments, tax planning and more. Mark believes it is essential to keep up with the latest financial regulations and adapt your finances accordingly, something he portrays in his financial articles.

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