Government Debt Consolidation Loans

In Australia, there are several consolidation services available to you if you are in debt and are looking to relieve some of the pressure on your monthly payments. Although the government does not specifically provide personal loans for debt, they do oversee certain debt relief solutions.

Below are a few different debt solution options provided by not-for-profits, government and private businesses
 
 
Cash flow Help

Centrelink Assistance
The first major option for those in financial trouble is to see if they are collecting all relevant benefits to help reduce general monthly living expenses. Different grants and benefits can help free up cash to the monthly budget, making it easier to handle bills.

 
Low Income Loans
If you do find yourself in a position where you need to borrow, be careful with whom you borrow from. If you are on Centrelink, try an Advanced Payment prior to taking on a loan.

In addition, if you need cash for unexpected expenses around the home. The GoodShepard provides two great low and no interest loans for important household needs – appliances, furniture, computer, etc. These loans are specifically designed to help low income earners.

Debt Consolidation Options
There are a handful of debt consolidation options out there. You can trade your way out of debt on your own or get professional help, which can be free or paid. If going the paid route, make sure that the benefit being provided outweighs the fee.

Free Financial Counsellors – This program is funded by the government and is run nationally. Counsellors are able to provide unbiased professional assistance on the best way to get out of debt for your specific circumstances. In many cases they provided better assistance than those of paid services.

DIY Debt Solutions – Actual debt solutions come down to a handful of tactics – budgeting being the foundation of all of them. Debt avalanche and debt snowball are two of the most popular debt eliminating tactics. They are both effective techniques depending on the person. The first tackles higher interest debt first while the other tackles the lowest debt amount first.

Debt Agreements – These are binding agreements between you and your creditors where by you pay back what you can afford. It is regulated by the government (afsa) and is more of a change in repayment amount versus debt consolidation. A debt agreement can be lodged by yourself or through a professional business.

Bankruptcy – Whilst this may not seem like the best option, it can be a great one depending on your situation. If your situation is one that your quality of life will be impacted for a significant amount of time, bankruptcy should be considered.

Professional Services – Most professional services that charge for debt consolidation will simply provide you with one of the above solutions. They are well versed in the above options and can help determine which one is suitable for your situation.

 
While there are dedicated government loans for debt consolidation, there are numerous resources provided by the government. This includes important information, not-for-profit funding and dedicated financial websites such as moneysmart and the ACCC.