If you have a mortgage, a credit card a store card and/or personal finance and maybe even a car loan as well, bringing all your debts together, is known as debt consolidation. Doing this the wrong way, can cost you thousands in additional interest costs, so it is important you seek the advice of an expert in this area and are fully informed of the different options.
Many people consolidate their debts so they can make their loan repayments more affordable, but before you head down this path let me give you with a few Pros and Cons.
A home loan interest rate will typically be a lot lower than the interest on your credit card, car loan and personal loan. So switching to one loan (with a lower interest rate) is likely to reduce your repayments and can also mean less fees. With accelerated repayments you can also reduce your overall interest costs substantially.
Instead of having to deal with several lenders, with debt consolidation you only have to deal with one. This means less paperwork and fewer phone calls when you have questions. Let’s face it we all like to save time!
One Simple Monthly Payment
Managing debts can become much easier when you only have one payment to make.
You Can Accumulate More Debt If You’re Not Careful
When you put your debts together you create capacity for additional borrowing and spending. This might tempt you to spend more or borrow more and as a result you could end up with more debt than before.
You May Pay More Overall
A longer loan term could mean you end up paying more over a longer period.
Fees & Charges
Some loans may have early exit fees and new ones may have application fees.
Before you make a decision there are a few things you may need to know and that is why it is important to seek the advice of a professional mortgage broker, so you can discuss what options are best for you. Here at Strawberry Finance we are always here to help. So if you have any more questions about the information we have provided please do not hesitate to contact me.
I will work with you to help you to understand if debt consolidation is the right option for you, what you will be able to save in your monthly repayments and the total amount of interest you will pay over the life of the loan compared to your current loan portfolio.
Ideally, the money you save in your monthly repayments through switching from a high interest credit card to a low interest mortgage, should be ploughed back into your mortgage potentially saving you tens of thousands of dollars and years off your mortgage. Have a play with the Extra Repayment Calculator to see how much difference you could make to the term of your mortgage. In many cases clients have been able to both reduce their monthly outgoings and reduce the term of their loan.
Call me now on 0499 658 710 and let me help you to reduce your monthly outgoings.