If you’re like most Aussies, you’re probably paying off more than one loan.



Whether it be a mortgage, a car loan, a credit card, a personal loan - or even all four (gulp!) - keeping track of what needs to be paid and when can be difficult. 



If you add in changing interest rates and the need to make milestone purchases, you wouldn’t be the only one to find yourself, and your finances, under quite a bit of stress.



The good news is that you don’t have to don a clown suit and keep all of those loan repayments in the air, as there are solutions available to help you manage your money, and your repayments, better.



In a nutshell it’s called debt consolidation, and it has the power to take the pressure off your finances.



Debt consolidation essentially means rolling all of your existing loans into one easy-to-manage loan. Let’s take a look at some of your options:





ROLL UP, ROLL UP!

One of the most common ways to consolidate debt is to take out a new personal loan and use that to pay off your existing debts.

Importantly, the interest rate on your new personal loan must be lower than the rate on your existing debts, such as a credit card with a 17.99% interest rate.

This will mean you pay less interest each month and you can either use the funds you save on other things or put the money back into paying the loan principal so that you pay off what you owe faster (and save more interest again!)

Another benefit is avoiding costly late payment fees many credit cards have and with just one loan to keep track of, you’ll be able to budget a lot easier and have a clearer picture of when you’ll be debt-free.





HIT A HOME RUN

Another option is to refinance your home loan to consolidate your debts, including car loans and credit cards, into your mortgage.

Mortgages offer comparatively low interest rates, so consolidating your loans in this way will reduce your monthly repayments and cut down the time and energy spent on managing multiple loans.

It’s important to note, however, that while this option can help ease the pressure on your finances now by reducing monthly repayments, consolidating your debt through your mortgage can extend the term of your loan, which may have previously been much shorter.

This means unless you aim to make a lot of extra repayments as soon as possible, you may wind up paying a lot more interest than you bargained for.

One way to address this is to create a loan split for the debt consolidation, which enables you to pay off short-term debts within a few years, rather than over the existing long-term home loan period, which is usually 25 or 30 years.

With mortgage rates down due to the RBA’s official cash rate being at record low levels, it’s a good time to see how you can consolidate and take back control of your debt.





That’s where we come in:

Get in touch with us today to find out how we can help you explore your debt consolidation and refinancing options. We’re here to make the whole process as simple and cost effective as possible.

At present, lenders are providing mortgage holders impacted by COVID-19 with a range of hardship support measures, including loan deferrals on a month-by-month basis.

Whatever your circumstances, we’re here to support you however we can through these times.