Debt is usually a part of life, and certain forms of debt allow us to get ahead in time. For example, a home loan is a form of debt but may allow you to build wealth over time. A student loan may also help or even a business loan may help you get ahead in your working life.

Other types of debt may do more harm than good if you’re not able to manage it or pay it down. Juggling debt can feel overwhelming. If you have multiple debts, you may be unsure where to start when it comes to paying them off. But you can put a plan in place to pay off your debts. 

Switch to save

If you’ve got credit card debt, it’s worth thinking about switching to a debit card. You’ll need to have enough in your debit account for any pending transactions and to avoid getting overdrawn. Consider cutting out any ‘buy now, pay later’ purchases, which may end up adding to your debt. If you’re keen to hold onto your credit card, find out how to set yourself some limits to help you manage it.

Meet your minimum repayments

If you’re not able to meet the minimum repayments on your debts, you may need to adjust your budget so you can. While you’re at it, see if there are any government benefits you’re eligible for.

Start paying down your debt

Once you have adjusted your budget to free up some cash, you will need to think about which debts you will pay off first. Some people pay off their smallest debts first; with each ‘quick win’, they can feel motivated to keep going. But paying off debts with the largest interest rate first is smarter mathematically, and will help you pay off your debts faster.

Consider debt consolidation

If you’re struggling to balance your debt repayments, you may want to consider a debt consolidation loan where you bring all your existing debts into one new debt that you pay down regularly. The interest rate on a personal loan is usually lower than it is for a credit card, plus having an end in sight can help you stay motivated as you pay off your debt. 

Get financial assistance

Sometimes things happen and you need a bit of help to get back on track. If you bank with us, call us on 13 3095 or ask for financial assistance in NetBank if you’re behind in paying what you owe.

Financial counsellors provide free and independent advice to help you reduce your debts and get out of financial difficulty. You can also call the National Debt Hotline on 1800 007 007 or search for a financial counsellor near you.

Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Some terms and conditions apply to our financial wellbeing features – please see for details.