Help clients ‘regain control of their financial future’

January is a troublesome time of year. Many are coming back to work after spending in excess over the break.

In fact, according to Pepper Money, debt in Australia has surged to over $2.1 trillion. Credit cards make up a large chunk of this, with a reported 12,132,305 credit cards in circulation nationally, as of October 2024.

Barry Saoud, general manager of mortgages and commercial lending at Pepper Money, described a culmination of high interest rates, stubborn inflation, and the unavoidable costs of the silly season as a “perfect storm for even more debt accumulation.”

“The pressure of gift giving and festive activities can often lead to an increase in spending and a reliance on credit,” Saoud said.

Part of the debt issue is the combination of high interest rates, inflation-driven spending increases, and a traditional surge in holiday expenses that are creating a perfect storm for even more debt accumulation.

“Add in the holiday season, which is typically linked to higher spending, it brings both challenges and opportunities for those aiming to take charge of their financial future,” Saoud said.

“Debt consolidation is one strategy that can offer relief from the burden of high-rate debt. By combining multiple credit card balances and other debts into a single loan with a lower interest rate, your client can potentially provide some much-needed relief by improving cash flow.”

To assist in providing better affordability, flexibility, and choice for borrowers, Pepper Money offers solutions such as:

• Improved cash flow: Consolidating multiple debts into one loan simplifies monthly payments, making finances easier to manage. This can be supported with interest-only loans and extended terms, like 40-year loans, which can reduce monthly payments, and help with overall cash flow.
• Cashout: Clients can leverage the equity in their home to consolidate debts, providing a lump sum that can be used to pay off high-interest debts, including business use.
• Business and tax debt: Clients can pay off business and tax debts to reduce interest or manage them over time with a structured payment plan to minimise financial pressure.

“Brokers have an excellent opportunity to proactively reach out to clients to help them reassess their financial priorities and implement positive changes that can lead to long-term financial stability in the new year,” said Saoud.

“It’s important to encourage clients to combine a debt consolidation strategy with sustainable spending habits and a solid budgeting plan.”

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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