A lot of us have been there, you start with one credit card, you roll it onto interest free with the best of intentions only to apply for another one in the meantime. Add to this the personal loan for the family holiday and the GE card that finished its interest free and you’d forgotten about it and are now paying 24% on the couch you don’t even like anymore!!
A debt consolidation loan can be a real saver in terms of cashflow and stress. For anyone that’s been in the situation above or something similar, it can be stressful and very easy to miss payments.
If you have enough equity in your home, then it may be a good idea to look at refinancing the current loan and borrowing enough extra to pay out and close those consumer debts.
For an example let’s assume you have a home worth $530,000 and you currently owe $400,000. You also have two credit cards with a combined limit of $8,000 and a personal loan of $12,000.
Home Loan $1,910/month
Credit card $240/month (minimum payment)
Personal loan $338/month
Total = $2,488/month
If you were to refinance the current $400,000 + $20,000 to pay off and close down the two credit cards and personal loan your new repayments could look something like this:
Home Loan $2,005
You can see that this would have some really positive outcomes to the family budget. It’s important though to keep in mind that you will now be paying those consumer debts off over 30 years. You may wish to put them on their own split with a shorter term to minimise how much interest you’re paying if you would rather.
Debt consolidation lending can also be used by self employed applicants who have ended up with a tax debt that needs to be paid. This is another one of those situations that can catch even the most organised business owner. Life events can pop up at anytime and unfortunately can’t always be planned for. A debt consolidation loan can be a great way to get you back on top so that you can focus back on the business.
With the changes in the credit reporting it is now more important than ever to keep on top of your repayments. A debt consolidation loan is the way to help you to do that by increasing cash flow and reducing the repayments into one repayment per month.
Either way, if this sounds like you and you would like to tidy up your finances and start moving forward with less stress then please get in touch here and I would be more than happy to show you how much you could be saving and different ways to structure it so that you’re paying it off as fast as possible without detriment to your lifestyle.
If you would like to learn more Click Here for your Complimentary Home Loan Assessment.