More and more people are facing turbulent times due to health and economic crises across Australia. With that, finding a way to alleviate your monthly expenses is essential. Thankfully, you can leverage debt consolidation to mitigate financial pressure.
What is Debt Consolidation?
In a nutshell, debt consolidation can help you roll several loans into single, easy-to-manage loan repayment. Instead of paying off your car loan, credit card, or personal loan every month, consider combining them into one loan and paying for a single amount instead.
How a Debt Consolidation Works
One way to leverage debt consolidation is to apply for a new personal loan to use that fund in repaying your outstanding debts. You only need to make sure to apply for a loan with lower rates than your existing ones.
If you’re paying off a credit card loan with an 18% interest rate, using a new personal loan with a 14% interest rate as payment means you can pay less for your card. Besides, it also lets you get away with expensive late fees from credit card loans and other loan sharks.
In other words, combining multiple debts into one payment gives you a more definitive timeline to determine when you can ultimately live off your debts. It also lets you save more funds to better manage your family budget since you only need to consider a single repayment.
Can I use a home loan to refinance debt consolidation?
Some people consolidate their debts by rolling them to a home loan refinance since these mortgages have considerably low interest rates.
If you have two or more loan repayments to meet every month, like several credit card loans or a car loan, using a home loan to combine these debts may ease your monthly payments.
But keep in mind that focusing on the home loan amount without considering other features such as loan terms may lead to longer-term debt. So if you don’t need to meet repayments as soon as you can, consider a more balanced home loan with the right rate and term.
Venturing into debt consolidation may be a daunting process, especially if you’re not familiar with all the intricacies of managing multiple loans simultaneously. Our mortgage brokers at Plan A Mortgage are willing to lend a hand to ensure every step you make is from well-informed decisions and reliable advice.
Ease Your Financial Pressure Today
Learn more about how you can consolidate your debts or refinance them with us at Plan A Mortgage. Our specialist brokers will discuss your current financial situation and help you look for better options to lift the financial pressure off your shoulders.
We can also help you find government and private-managed hardship support measures, especially since the COVID-19 pandemic impacted a massive portion of borrowers.
Feel free to speak with us at 1300 052 055 today and discover your opportunities with debt consolidation.
Disclaimer: This article presents content in a general nature and is solely for informative purposes only. It does not aim to provide public nor personal financial or tax advice. It does not include nor put into consideration your individual situation nor circumstances. Before taking an active decision, seek expert advice and thoroughly examine your current position. Moreover, this article is protected by intellectual property and copyright laws and should not be reproduced without prior written consent.