Debt consolidation means, to combine, all of the unsecured (i.e. credit cards, personal loans) and secured (Home Loan, Car Loans) credit amounts that you pay each month into just one loan or a split loan. By consolidate into one loan, or 2 loans if part of the debt is relating to business loans, you are effectively reducing your interest rates and increasing the amount of money available to you at the end of the week, fortnight and month as you derive your income.
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 credited into the loan to reduce the term (years) off the loan.
For example, if you consolidated a personal loan of 7 years into your consolidation home loan of 30 years, when able you would want to pay the equivalent personal loan amount repayment into the consolidation loan to minimise the term (years).
Additionally, consolidating your loans can help you from falling into the debt trap and being in a bad money situation of damaging your Credit File and Credit Rating or having to declare bankruptcy. Unfortunately, if this has happened we will need to talk with you about a Credit Impaired loan facility. Follow the link to find out more on this type of finance product.