DEBT CONSOLIDATION

Do you have multiple credit card or store card debts? LOANS AND MORTGAGES could help you with your debt consolidation, and you could benefit from having just one regular repayment to manage.

  • You can work out a payment plan that suits your situation
  • Know when you’ll have your debt paid off with a choice of flexible loan terms

What is a debt consolidation loan?

A debt consolidation loan is a personal loan that could help you consolidate your credit cards, existing loans and other debts into one simple loan.

How could a debt consolidation loan help?

A debt consolidation personal loan could make managing your finances a whole lot easier. You could avoid paying different amounts at different times of the month to different lenders.

LOANS AND MORTGAGES can show you how easy it is to help manage your budget with one loan to consolidate your debt and just one regular payment.

Benefits to consider:

  • If you are struggling with repayments due to having multiple debts, a Debt Consolidation Loan will allow you to minimize your repayments.
    Note: It is important that you speak with your mortgage broker so that they can assist you in working out a more beneficial repayment structure.
  • If done properly, you should be able to save thousands of dollars in interest due to the lower interest rates that are now applicable to your overall debt. Please don’t underestimate the savings that this loan can give you when it is established correctly.
  • Another benefit is having only one repayment to make, rather than multiple repayments to multiple debts. This obviously simplifies your loan repayments and also means that you don’t have to keep track of multiple repayment amounts and the times that those amounts need to be paid.
  • Obviously the bank will give you a minimum payment to make, but it is not beneficial if you only pay the minimum payments. Your mortgage broker will assist you to find the right payment that you should make in order to balance out the debts that you have consolidated into your home loan. This way, you will not be paying off your short-term debts over the life of your home loan, which will save you many thousands of dollars.

What do you need to be careful of in a Debt Consolidation Loan?
There are only a few downsides to Debt Consolidation Loans. In our experience most problems with debt consolidation loans are created with the client applies for the wrong loan for what they are trying to achieve. The policy behind some of the loans is quite restrictive and benefits that you may have had elsewhere are just not available in every loan.

Things to be careful of:

  • You need to be careful that you understand the difference between the lenders minimum repayment and the minimum repayment that you should make.
  • Some lenders will not allow certain features on a Debt Consolidation Loan. Different lenders have different rules regarding the clients who are borrowing in order to consolidate debt.

Even though the clients are going to be in a better position in most cases after the debt consolidation, the lender sees the loan as a higher risk because there were several debts associated with the client. This means that some of them will place restrictions on your loan features. A common condition is where you will need to supply a written request to the lender for redraw and that request will need to be approved. You will also need to pay a fee for the redraw.

  • Another thing to consider is that your home loan is now carrying this extra debt. We see it like this. Your debt is your debt, no matter where it is. It is just the geography of where the debt is. Putting the debt onto your home is not a problem as long as you understand what you need to do to make the facility work properly.

How can I apply?
These are your simple steps to apply for a loan.

  • Contact us on the numbers above to speak to a mortgage broker, or complete our online enquiry form
  • You will speak with a broker who will take into account your needs by discussing not only your requirements, but also any concerns you have, and offer you some possible strategies and ideas that you may not have thought about.
  • Once we know what you require, we will draft and email you a proposal– this will usually consist of a few options that are easy to understand.
  • Once you have had a chance to look at what options are available, you can contact your broker or the broker will call you, to discuss the proposal.
  • You can then decide if you wish to proceed or you may just want to discuss more options.