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Helpful tips if you're worried about repaying debt

Borrowing money may help us to achieve financial goals sooner rather than later, however it is important that the money is able to be repaid without causing financial difficulties. The cost-of-living crisis, an unexpected life event such as job loss, or an illness or injury, may disrupt your finances to the point where your loan repayments become a challenge.

Here we’ll share what to be aware of to help manage existing debt.

Organise your debt

The first step you can take is to organise and understand all the amounts you owe.

Gather a list of all your debts owing, and for each of those write down who you owe money to, the amount owed, the monthly repayment and the interest rate being charged.

Once they’re all written down:

  • Identify if there are any debts that you can repay immediately to remove this interest cost
  • List them in order of the highest to lowest interest rate
  • While you’ll need to continue to make the minimum repayments on all your debts, when you’re able to make extra repayments, channel them to the one that is being charged with the highest interest rate to pay it off sooner and reduce the interest costs
  • Check your arrangement with your lender to make sure there are no penalties or charges for early repayments.

Understand your debt position

Being aware of your debts and making a plan to pay them is an important part of getting yourself into a healthy financial position.


To get started, list your debts, the amounts you owe and the interest rates you’re being charged. Then number these debts in order of priority, from highest to lowest interest rate. You’ll then have a clearer idea of where you stand with your debt and be in a better place to work out your budget.

Consolidate your debt

Debt consolidation may be an option for you if you’re juggling multiple repayments. Debt consolidation involves combining several debts – including loans, credit cards and store cards – into a single loan or credit card account. In some situations, it may help make your repayments easier to track and help you get a clearer understanding of how much your debt is costing you.

However, debt consolidation is not suitable in all circumstances – it’s important to consider whether or not consolidating debt will leave you better off in the long run. Take care not to refinance short-term debt onto a long-term loan. While this may reduce your repayments in the short term it may lead to higher interest costs over time.

Create a budget that focuses on debt management first

Debt management is the act of managing your finances through personal budgeting and a well-formulated plan. The goal of debt management is to help people to lower their current debt and move towards eliminating it.

A comprehensive budget records all incoming money and outgoing expenses.


If you are able to contribute more towards your loan repayments, consider reducing some lifestyle expenses, like meals at restaurants, streaming subscriptions or nights out at the cinema. Once you have reduced your debt to a satisfactory amount, you may add more optional expenses back into your regular spending.

Ask for help

If you're struggling with managing repayments for your loans, help is available. The earlier you get help, the more options you'll have.

Many lenders have hardship policies and teams of people ready to help their customers in tough times. You may be able change the terms of your loan, or temporarily pause or reduce your repayments, through a hardship agreement. If you defer repayments, you will still owe all the repayments you miss, including interest. If you can afford it, keep making repayments, even if they're smaller. 


If you need to implement hardship agreements, ensure you understand the long-term implications on the amount and cost of your loan, and whether this may limit your ability to borrow in future. Find out more about the help that banks offer for people experiencing financial difficulties via the Australian Banking Association.

Need help to manage your debt?

The National Debt Helpline can help you get back on track. Call 1800 007 007 (weekdays 9.30am to 4.30pm, Sydney time) or live chat (weekdays 9am to 8pm, Sydney time) from anywhere in Australia to talk to a free and independent financial counsellor.