Debt consolidation means, to combine some or all of your Unsecured Loans (i.e. Credit Cards, Personal Loans) and Secured Loans (Home Loan, Car loans) amounts that you pay each month into just one loan or a split loan facility. By consolidate your high interest rate loans or debt into a home loan a lower form of interest paid, you are effectively reducing your long term interest repayments and increasing the amount of money available to you at the end of the week, fortnight and month.

Eventually, over time you’ll find you are on top of your loan repayments and paid all your expenses for the week or month, any available extra money (funds) can be paid (credited) into the loan to reduce the years (term) of the loan.
For example, if you consolidated a personal loan with a 7 year loan term into your consolidation home loan of 25 or 30 years, when able you should pay the equivalent personal loan amount repayment into the consolidation home loan additional to the minimum home loan repayment required to minimise the years (term) otherwise you are paying the personal loan out over the 30 year home loan term.
Additionally, consolidating your loans can help you from falling into the debt trap and being in a negative money situation where the income you receive doesn’t cover your weekly living expenses and in turn you eventually damaging your Credit File and Credit Rating with your bank or lender or having to borrow at a higher rate with another lender.
If you are in a situation that you are not able to meet your credit (loan) repayments you need to talk to your creditor, bank or lender to work out a payment plan.  DO NOT ignore the phone calls and letters from creditors. You need to talk to them to structure a payment plan to give you time to restructure your repayments or time to refinance into an arrangement of debt consolidation.
If you need to discuss debt consolidation further, we look forward to your post.
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