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Manage your debt

To a Financial Wellbeing, debt isn’t a dirty word. It can be downright useful when you know how to manage it. Learn about different types of debt, as well as tactics and clever tricks to get on top of it.

1. Types of debt

Not all debt is bad debt

You may have heard some debt described as ‘good’. And it’s true. Some debts have the potential to increase your net worth or generate income, such as student loans, a mortgage on your home, or the costs of starting a business. But other debts, such as spending above your means or borrowing money for non-essential items, are considered ‘bad debts’.

It’s important to evaluate your financial wellbeing and structure your assets and debts appropriately, to ensure you’re getting the most benefit. For instance, there can be tax benefits from certain ‘good debts’ – like business or investment lending. ‘Unfortunately it’s quite common for people to accidentally disadvantage themselves by having debt on the wrong asset or focussing on the wrong debt to repay first’ according to Rebecca Hurford, Senior Financial Advisor at ANZ.

What category does your debt fall under? Make a list of what you owe - including bank or student loans, credit card balances and buy-now-pay-later accounts. Label them ‘good’ or ‘bad’ and then we’ll make a plan to pay them off.

2. Paying your debt

Prioritise your debts

You don’t have to pay off everything at once. Start by writing down your most expensive or pressing debt, or the one costing you the most in interest. Then move down the list to other items such as outstanding bills, car repayments and insurance. Make sure to include the total amount, the name of the creditor and any interest rates attached to the debt. Pay your way down this list.

Different ways to pay

Repayments come in all shapes and sizes. For example, student loans can be tackled with automatic salary sacrifice payments. For a mortgage, transferring your savings to an offset account may help reduce the amount of interest you’re paying.

Do some research about the types of repayments available for your type of debt. It can get complex, so feel free to reach out to a Financial Advisor for some tailored advice.

pro tip icon

Pro tip

Making mortgage repayments more frequently (for example, fortnightly instead of monthly) can reduce the amount of interest you pay over the life of your loan.

Consolidate your debt

If you owe lots of small amounts, like store credit or personal loans, you may be able to consolidate your existing debts into one easy to manage loan. You can do this by applying for a personal loan and, if approved, using the funds from this loan to pay off your other existing debts. You then pay back the personal loan over a set term.

The key benefits of consolidating your debts can include:

  • having only one set of regular repayments;
  • potentially paying less in fees and charges;
  • being able to get a lower overall interest rate when compared to your existing debts; and
  • having a clearer timeline to the day you can pay off your debt.

Always remember to carefully read the terms and conditions, as well as the fees, charges and interest and work out what is best for you and your circumstances.

If this is something you’re considering, you can use the ANZ personal loan repayment calculator to estimate your repayments and see if they’ll work for your budget.

Loan amount

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The repayment amount shown using this calculator is an estimate, based on information you have provided. It is provided for illustrative purposes only and actual repayment amounts may vary. To find out actual repayment amounts, contact us. This calculation does not constitute a quote, loan approval, agreement or advice by ANZ. It does not take into account your personal or financial circumstances. To apply for an ANZ Personal Loan you must complete an application. All applications are subject to ANZ’s credit assessment criteria. Terms, conditions, fees and charges apply. ANZ will not store the information provided in this calculator. For more important information about the interest rates and repayment amounts shown in this calculator, see the ‘Important Information’ section at the bottom of this page.

For an ANZ Fixed or Variable rate Personal Loan, the repayment amount shown on this calculator includes the Loan Approval Fee of $150, interest and monthly Loan Administration Charge of $10.

3. Manage your debt

Make your debt work for you

There are many tips and tricks you can use to reduce your interest and pay off your debt faster.

  • With credit cards, paying off your balance each month, or within the interest free period, stops your interest from piling up.
  • With a personal loan, you can shop around to find the best interest rate or speak to an expert to help you decide if a fixed or a variable rate works best for you.
  • See if your home loan is still working hard to meet your needs. A 15 minutes ANZ Home Loan Check-In could help you find ways to fine-tune your home loan so it continues to meet your needs.

Whichever types of debt you’re wanting to wrangle, speak to your financial institution to find ways to make them work for you.

Get creducated

With credit comes big responsibility. To learn more about how to make your credit card work for you, check out ANZ Creducation.

Who's the boss? You are.

Now you know what kind of debt you have and how you might repay it, it’s time to understand how those debts might have impacted your credit score – and how you could start improving it.


pro tip icon

Pro tip

65 per cent of Australians have never checked their credit score. So join the 35 per cent who have checked their score and know where you stand.

4. Get your credit score

What is a credit score?

Your credit score is a number based on your credit history that lenders and banks take into account when determining whether or not to lend you money. In other words, it’s a pretty powerful number.

How is your credit score calculated?

The ASIC MoneySmart website says your credit score factors in the following:

  • Your age and where you live
  • Any loans you have
  • The number of applications/enquiries you've made
  • The type of credit accounts you’ve held
  • Your usual repayment amount/s
  • Whether you make your repayments on time
  • If you have previously had a bankruptcy or personal insolvency agreement

How to improve your credit score

The good news is your credit score is dynamic, so it can improve depending on how you manage your debt. You can actively improve your credit score by paying all your bills or loan repayments on time. The ASIC MoneySmart website offers a few options for improving your credit score. Find out your score now, and then come back here to give your debt management a boost.

Check your credit score

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You’re the master of your own debt-iny.

Congrats. Now that you’ve learned about managing your debt, it's time to forge ahead with some savings

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What's next?

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4. Set a savings goal

Visualise where you’re going with a savings goal.

Start saving

The information set out above is general in nature and has been prepared without taking into account your objectives, financial situation or needs.  By providing this information ANZ does not intend to provide any financial advice or other advice or recommendations.  You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances.

ANZ does not use the information you provide for the purpose of assessing any application.

Total loan repayments and repayment amount

For an ANZ Secured Car Loan, the total loan repayments shown is an estimate based on the total loan repayments, total interest and the Loan Administration Charge of $5 per month, but does not include the Establishment Fee of $350 and other fees which may be incurred such as late payment fees. The repayment amount is an estimate based on the loan amount, interest and the Loan Administration Charge of $5 per month, but does not include the Establishment fee $350. If the Establishment Fee is financed as part of the ANZ Secured Car Loan, the regular repayment amount will be higher than the amount stated on the calculator.

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Comparison rate

For ANZ Variable and Fixed Rate Personal Loan

For the purposes of this calculator, the following default interest rates are used and are subject to change:

Fixed interest rate:    (comparison rate: )

Variable interest rate:    (comparison rate: )

This comparison rate is based on a $30,000 Personal Loan for a five year term. This rate is applicable for unsecured loans only.

WARNING: The comparison rates are true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.  

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Interest rate

For ANZ Variable or Fixed Rate Personal Loan

For the purposes of this calculator, the following default interest rates are used and are subject to change:

Fixed interest rate:    (comparison rate: )

Variable interest rate:    (comparison rate: )

This comparison rate is based on a $30,000 Personal Loan for a five year term. This rate is applicable for unsecured loans only.

WARNING: The comparison rates are true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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