As well as a current mortgage loan, or several if you're an experienced investor, you may be preparing to start another. As well, you have a personal loan, car loan and several very well-used credit cards. But many loans do not make light work especially when it comes to repayments and interest rates. So, here are some simple tips to reduce your debt and save. Cut up your credit cards Possibly the easiest way to reduce your debt and save - but still quite a scary option for many - is paying off your credit cards before cutting them up and using them no more. We'll allow you a credit-debit card for your main bank account/s but that's it! Call it tough love but for first-home buyers in particular who are keen to impress lenders, few things will irk them more than seeing a list of regularly maxed out credit cards. If you're too panic-stricken for such tough lovin', lower your credit card limit so you won't be tempted to buy more than you can repay. Yes, it's still scary but lenders regard high credit card limits as potential debts, even if you've never reached that limit, so play your cards right and stay on the safe side of your credit. Debt consolidation loan A type of personal loan, debt consolidation loans are a less simple but still a  strong plan to reduce your debt and save. The basic idea is to roll all your debts into a large single loan and repay them faster with one single repayment and one interest rate - rather than juggling several loans, including credit cards, simultaneously, along with their repayments. While such loans can be a great way to reduce your debt, remember that they will initially hurt your credit score - although this score can rise with regular timely repayments. Also,  the cash you hoped to save with such a loan may not be a lifesaver if the interest rates are still higher than those on your existing debts. You will also need to ensure you qualify for these loans as lenders will examine your spending habits, employment and credit history as thoroughly as they will do for a potential mortgage loan. Finally, if you're a habitual overspender, the best consolidation loan in the world won't help with this issue. The best answer to bad spending habits is to not spend in the first place.

Refinancing 

A type of debt consolidation loan, if you choose to make it so,  the simplest plan behind refinancing is switching your home loan to another lender, or at least to another loan plan with the same lender to ensure you're enjoying the best possible deal. What you can also do with this switch however is include your other debts, including credit cards, in this new loan. Personally, we're a huge fan of refinancing but along with the above considerations, there are a few other points to think about when taking out a debt consolidation home loan. Firstly, it will mean borrowing against the equity on your property (otherwise known as the difference between the market value of your property and your home loan's remaining balance). This is not impossible but depending on your debts, it may mean you have to take out a longer, larger loan along with its attendant risky interest rate factors. As a result, the cash you hoped to save with such a loan may not actually be saved especially when considering the extra interest needed on a larger loan. We're here to help As we mentioned earlier, we agree with the great opportunities in and around refinancing, so much so that we have a special team of experts to help you find the best possible deals plus more than 40 of Australia’s biggest banks and specialist lenders to choose from. We have loans big and small to choose from too, including ones for debt consolidation as well as first-home buyers, and property investors,  we haven't forgotten you either! So, come to Lending Loop for top tips on finding a great lender for you and your needs along with similar property purchase questions.