If you are having a problem meeting your repayments of multiple different loans, debt consolidation may be an option.
Some people choose to consolidate because meeting multiple repayments of different loans can be difficult to stay on top of. The timing of each repayment may have different dates to be repaid each month which may result in penalty fees - late payments or overdraw fees.
The nature of some loans, including vehicle and personal loans, may result in interest rates that are very high. And credit card interest which can be astronomical.
Debt Consolidation is when you refinance your outstanding debts in efforts to either reduce monthly repayments, reduce the amount of interest being paid or pay off debt sooner by refinancing to a lower rate and making repayments at the same rate.
Should I consolidate?
Depending on your personal circumstances, debt consolidation should be considered if the following applies to you:
- do you have multiple loans and have you incurred interest or late penalty charges because you are finding the timing difficult to manage?
- do you have unsecured debt that is being charged upwards of 6%
- would you like to repay your debt faster- by reducing your interest rate and making the same repayments?
If so, meet with one of our mortgage brokers and we can discuss your eligibility and put together a plan to meet your goals