Debt Reduction

Debt Reduction Strategies

Effective debt management pairs seamlessly with cash flow management. Your financial adviser analyses your income, expenses, and cash flow to spot surplus funds, then recommends using them to reduce debt, build reserves, invest, or boost super.

Decisions Emerge

Good Debt vs. Bad Debt

Once prioritising debt reduction, key decisions emerge:

Multiple debts?

(e.g., credit cards, car loans, store cards) Should you consolidate, or target highest-interest first?

Accelerate repayments?

Can you ramp up within your budget?

Home vs. investment loans?

Which to pay down first?

Debt recycling?

Convert non-deductible home loan debt into tax-deductible investment debt by redrawing equity for income-generating assets like shares or property.

Home loan redraw?

Use it to offset other high-interest debts?

Maximise good debt benefits?

Leverage tax deductions on investment property or margin loans.

Debt Type

Examples

Key Traits

Bad Debt

Credit Cards, Personal Loans, Store Cards

High interest, non-deductible, short-term

Good Debt

Investment property loans, margin loans

Potentially tax-deductible, builds wealth

Your adviser tailors these to your goals, ensuring tax-effective strategies like debt recycling where suitable.