ANZ debt consolidation using a balance transfer or personal loan
Consolidate your existing debts, save on interest costs and get your finances in control with a balance transfer or personal loan with ANZ.
If you're struggling to repay a high-interest debt (or multiple debts), debt consolidation could be the key to paying your balance down without the burden of large interest rates. Most banks offer promotional balance transfers and low rate personal loans, giving Australians plenty of debt consolidation options. This guide, however, will focus on the alternatives offered by ANZ. Read on to compare the ANZ Debt Consolidation Balance Transfer and ANZ Personal Loan, and see which debt consolidation option could better suit you.
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ANZ Debt Consolidation Balance Transfer vs ANZ Personal Loan
If you wish to turn to ANZ for debt consolidation, you can choose between getting a personal loan or a credit card with a balance transfer offer. Details of these options are as follows:
- Personal loan
ANZ personal loans allow you to combine your outstanding credit card and loan dues under a single account. You can choose a repayment period from one to seven years in accordance to how much you can afford to pay each month. If you opt for a variable rate loan, you can make extra repayments as and when you like without paying any penalties, and these loans come with redraw facilities. You can make weekly, fortnightly, or monthly repayments; and you can set up direct debits to simplify repayments.
- Balance transfer
ANZ offers balance transfer credit card offers that let you transfer your existing balance to the card and pay it off with a 0% balance transfer rate for a promotional period. This gives you the chance to pay down your balance without the burden of interest for a promotional period of say, 18 months. Once this introductory offer ends, though, any remaining balance will collect the much higher standard interest or cash advance rate. Even if the card has a 0% promotional offer, you'll still need to make minimum repayments each month. However, you should always try to pay more than the minimum to repay your entire balance before the promotional offer ends.
ANZ lets you transfer balances from up to three non-ANZ bank accounts to the new card, so long as it doesn't exceed 95% of the credit limit. You'll also be required to pay a one-off balance transfer fee. See our guide for tips on how to conduct a balance transfer with ANZ.
ANZ Debt Consolidation Balance Transfer vs Personal Loan - what to consider
If you're considering using a balance transfer or personal loan to manage your existing debts, consider some of these factors to determine which option is right for you:
- Fixed rate or variable rate
A fixed rate personal loan gives you peace of mind in the form of fixed repayments throughout the course of the loan. A variable rate loan, on the other hand, gives you greater freedom when it comes to making extra repayments. And, you can usually expect it to come with a redraw facility.
- Using your new card for purchases
If you opt for a credit card with a balance transfer offer, remember that interest-free days on purchases don't apply until you pay the transferred balances in full. Also, your repayments will go directly to the balance that's accruing the highest interest. This means that they'll go to your purchases first, then your balance transfer. If you need to concentrate on repaying your debt, using a balance transfer credit card for purchases isn't the wisest idea.
- Comparing rates and fees
Pay due attention to the interest rate and fees, no matter whether you're looking for a personal loan or a credit card. If you wish to get a balance transfer credit card, find out about the revert rate it charges ahead of time. The annual fee you have to pay can also vary from one offering to the next.
- Promotional rate and length of offer
While a personal loan might have a higher interest rate than a promotional 0% balance transfer card, you have a longer period to pay it off. While you could get a personal loan with a low rate that lasts for several years, you'll only have between 6 and 18 months (depending on the offer) to pay off your balance without incurring any interest. To calculate whether a credit card or personal loan will work better for you, consider the size of your debt. Then work out how much you'd need to pay each month to pay it off by the end of the credit card promotional period or loan repayment period.
Balance transfers and personal loans are both useful debt consolidation tools, but the most suitable option will largely depend on your debt and ability to repay. While ANZ offers competitive balance transfer and personal loan deals, make sure to compare your options before applying to make sure you're choosing the best* option for you.