Home Loan Mortgage Broker Perth Melbourne Home Loan Comparison Co Dennis Smallwood - Home Loan Packages Debt Consolidation

Consider Debt Consolidation To Save Money

Debt consolidation is something to consider carefully. Credit cards and multiple personal debts can be the bane of our existence. By consolidating several small loans into one manageable debt, reducing monthly repayments, you may improve your monthly cash flow. It could also make it easier to purchase vehicles, equipment or property if you only have one personal debt rather than many small debts. (lenders don’t like you having several ‘unexplained’ debts)

An Typical Debt Consolidation Scenario (and one we recently encountered):

A couple had 3 credit cards and a small personal loan, totalling just under $30,000. They wanted to do a debt consolidation. The combined monthly repayment on these debts were $880. We proposed consolidating all the debts into one loan. We did this by taking advantage of the equity the clients had in their property and taking a 7-year home loan. The repayments reduced by $470 to just $410 per month which was a huge cash flow relief for the client. This will save them a lot in interest over the term of the loan, compared to what was being charged on all the smaller debts.

Look at Your Options

While using equity in property was good in this scenario, it may not always be the best option when doing debt consolidation. Using equity may restrict what you can do in the future, especially if you want to do any other sort of investing or need to use your property equity. If future investing is a consideration, use a different form of debt consolidation.

We can still look to consolidate multiple debts into one Personal Loan to improve your monthly cash flow. Personal Loan interest rates are usually cheaper than credit cards. They also do not allow temptation to use the available funds that a credit card might.

 

Other posts you may be interested in;

What is Redraw?

How Does An Offset Account Work?

Home Renovation Options

Home Loan Health Check

 

The Home Loan Comparison Co.  compares home loans from a much wider variety of banks than most people have time to consider, and we find the loan that suits your goals.

We are experienced, knowledgeable and dedicated to building ongoing relationships to keep on providing personal and valuable service that is rarely experienced when dealing with the banks.

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