Negotiation 101: Busting debt and lowering your costs

Negotiation 101: Busting debt and lowering your costs

5 February 2020

Debt doesn’t have to be a dirty word. In fact, debt can enable you to do big things in life, such as buying your family home. And it can be tempting to think that once you’re in debt, it’s a case of set and forget. While keeping your debt on autopilot may seem easier, a much better deal could be within your grasp.

If you’re struggling with mortgage and credit card payments, or wish there was a way to make them more manageable, taking a proactive approach could be the answer. Negotiating your mortgage and credit card payments could help you bust debt quicker and make your payments easier to manage. This in turn can help you save more, reducing your overall financial stress.

Why negotiating for less debt is a good idea

While your credit card loan or mortgage may have been a great option for you at the time, things can change quickly. It’s important to always know that you’re getting the best deal available by checking rates and options regularly. Slight differences in interest rates may seem insignificant in the short-term, but they can make a monumental difference to your financial position in the long-run.

Your circumstances may have also changed. Perhaps you’ve started a family and have higher expenses and a lower income, so you’re feeling the pinch from debt more than before. No matter how your circumstances, it’s important to always have visibility over your position; the more awareness you have of your situation, the more in control you can be.

Debt negotiation could help you:

  • Save money
  • Settle your debt
  • Lessen financial stress
  • Avoid financial trouble (e.g. bankruptcy).

Remember that with debt negotiation you have nothing to lose from discussing your options – only potential freedom to gain.

Ways to negotiate and reduce debt 

While your approach will depend on your circumstances, here are a couple of ways you could use debt negotiation to save money and bank more financial freedom.


Consolidate your debts

Debt consolidation is rolling your existing debts into one new debt. If you have one or multiple credit cards and a mortgage, you could be losing money on extra interest and fees. Combining your debts into one could help reduce financial pressure, if the new loan’s interest and fees are manageable. Just be sure to confirm that it really is a better deal. Learn more about how you can be best prepared to deal with refinancers on ASIC’s MoneySmart website.   


Talk candidly with your credit provider

Do you feel confident your credit provider is giving you the best deal possible? For a financial commitment this important, it’s crucial to know where you stand. Instead of suffering in silence, bite the bullet and contact your debt provider. 

Whether you’re struggling to keep up with your payments, or are simply curious if there’s a better agreement out there, talk openly with your credit provider. This could be win-win, as they could put you in a better financial position and you remain onboard as a loyal customer.

Save your money and reduce long-term debt

While it’s easy to get complacent about your credit card or mortgage debt, it can have a huge impact on your financial situation both now and in the future. By reviewing your debt arrangements and negotiating with your credit providers, you could pay less interest, which means less debt and more funds to reinvest in your future. Get in touch with the Advantage Consulting team to make informed investment decisions today.

This is general advice and has been prepared without taking into account your particular situation or needs. You should consider whether it is appropriate for you before acting on it.