No matter how good your intentions are when it comes to money, it can be difficult to take a cold, hard, honest look at your financial situation.

The problem could be loan repayments and hire purchases or store and credit card debts that never seem to get any smaller.

Hard-to-tackle debt is one of the financial stressors that can contribute to mental health and relationship difficulties.

The good news is that managing debt and lightening the load on your bank account, and mind, might not be as difficult or scary
as you imagine.

Combining your debts by taking out a debt consolidation loan can save you money, make your life admin just a little bit easier and make you feel better too.

How it works

Suppose you have multiple sources of debt, including credit cards, loans and hire purchases, all of which have different repayment rules and interest rates. While you're making minimum repayments or paying off a lot of interest and not much principal, you're essentially treading water and not reducing any of your debt.

Debt consolidation is when you roll up those multiple sources of debt into one single loan, from one provider.

By moving your high-interest debt into one place, you can benefit from a lower interest rate on the new loan. You'll also be paying off more of the principal, meaning your debt starts to shrink.

Check out the debt calculator on the Sorted website (sorted.org.nz) to see how much interest you're paying right now, plus how much money and time you could save by increasing repayments or consolidating the debt at a better interest rate.

How debt consolidation helps

Knowing that everything is under control and that you have a date to look forward to when you're debt-free is a feel-good moment in itself, but think about the flow-on effects. Fewer sleepless nights worrying about money, less stress and anxiety and a clear and manageable goal that you're on the way to achieving.

Where to get a debt consolidation loan

Police Credit Union offers personal loans exclusively for members of Police and their families. Apply for a consolidation loan with PCU to get your debt under control and head toward financial freedom faster.

Visit the Police Credit Union website, policecu.org.nz, for more details.