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Debt Consolidation: Pros and Cons


Debt consolidation – The Pro’s and Con’s

Many people have experienced the stress that can be caused when juggling multiple debts, or where existing debts are becoming too difficult to manage. Combining all your debts into one loan can offer a debt management solution to some people.
The Pro’s

One way to gain control over your debts can be to combine your consumer debt with your mortgage. This can offer you the benefits of a lower interest rate along with only one monthly repayment.

You will be paying more on your mortgage repayments, but as this one repayment will include all your consumer debt, overall you can save considerable money.  Another attraction of this type of loan is the convenience of only having one payment instead of several different payments to remember each month.
The Con’s

Consolidating your debts may sound like a wonderful idea, just the solution you were looking for right?

Before deciding whether debt consolidation is right for you, consider your spending habits and ensure that you do not just carry on building up more debts.  Consolidating your debt does not mean the debts go away.  They simply   roll into one loan, and the money still has to be repaid, Do not continue the cycle of debt.  Throw away those credit cards and store cards!

Also be aware that by rolling all your debts into your mortgage, you are effectively putting up your property as security.  If you do not make your repayments, you may lose your property.

Using your mortgage to pay off other debts should help you regain control of your debts and can help you save money in the long run if you act responsibly.

Gail has a passion for assisting her clients to get their finances under control and can work with you through this process.

 

IF your monthly commitments look something like this -Our Easy Finance Solutions Could Help!

 

Mortgage $300,000 X 6.99% =
C/c 1 $10k limit =
C/c 2 $14k limit =
Personal loan $5000 =
Car loan $30,000 =
Total outgoings (Per Month) =
$1,994.00
$   300.00
$   420.00
$   179.62
$   705.34
$3,598.96

Using the equity available in your home AND IF YOU WERE ABLE TO CONSOLIDATE ALL INTO ONE EASY TO MANAGE MONTHLY LOAN REPAYMENT.

$359000 x 6.99% = $2,386 pm (COMP rate 7.06%)
(Calculated on P & I repayments over 30 years some Bank fees may apply)

 

SAVING $14,555.52 PER YEAR

If you can afford to continue paying the original monthly outgoings of $3598.96 on your new loan you could reduce the 30 year term to ONLY 12.6 years.

Call Gail now on 0414 904 589 to discuss your loan options, or fill out the Contact Us form and she will call you!

 

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