Debt consolidation loans have long been pitched at those who are struggling financially (for bad credit) – but in fact, consolidation can offer substantial savings for ordinary families and home owners across the financial spectrum.
How does debt consolidation work?
Debt consolidation in Australia works by using the equity existing in your home to reduce your other debts – anything from personal loans to store cards. Instead of several debts at interest rates ranging from the Reserve Bank standard rate up to 35%, you can have a single, larger debt at a lower interest rate, with a longer term and a single monthly repayment.
Debt can be consolidated via home loans, personal loans or credit card balance transfers.
What are the benefits of consolidating?
- Easier to manage multiple debts
- Less paperwork
- One monthly repayment to one lender
- Save on your monthly repayments and overall interest charges
- Regain control over your finances.
These may include:
- Lender fees. Application fees may be applicable on the new loan or credit card, plus possible exit fees if you are paying out a personal loan or refinancing your home loan.
- Government charges. Government duties and taxes may apply if you use your home loan to consolidate debts.
Why choose us?
Before making a decision, it’s imperative you consider all of the costs and benefits of consolidating your debt. Loanscope can explain the intricacies of how debt consolidation works, the different interest rates available, and how the decision will influence you in the short and long-term. If you decide to use a home loan to consolidate your debt, we can explain how making extra repayments will benefit you financially in the long-run and have you debt-free sooner. Please get in touch today to discuss your needs.