Do you have different types of debt and want to simplify your finances? You can streamline your debt into a single monthly payment through the debt consolidation process.
Roll your credit card, car or personal loans into your home loan.
Debt consolidation is the process of merging your various debts into your home loan. This means that instead of making individual repayments for your home loan, car loan and credit card, you just need to make a single combined monthly or fortnightly repayment.
By consolidating debt with your home loan, you will be subject to the generally lower interest rate of your home loan. With credit card interest rates typically well-exceeding 10%, you could save money and alleviate the stress of worrying about missing repayments. This way, you can enjoy the benefits of a longer repayment term and lower interest rate.
Consolidating your debt doesn’t mean that you’ll be repaying those debts over the course of your remaining home loan term. You can choose the timeframe with which you must repay your consolidated debt within your home loan. For example, if you have 15 years left on your home loan, you could set a 3 year repayment term for your consolidated debt. This ensures that you are less likely to pay more in interest.
There are three kinds of unsecured debts that you can consolidate with your home loan:
Each of these credit products comes with a higher interest rate and shorter repayment period compared to most home loans.
Find out what your new repayments might be in seconds.
In order to consolidate your debt, you need to refinance your home loan. In order to be eligible for a new debt consolidation loan, you need to show that you are a reliable borrower that the bank can trust to make repayments on time. You will need to demonstrate that you have:
If you don’t meet the above criteria, you may be able to consolidate with a specialist lender that offers non-conforming loan options. Bear in mind, these lenders may charge higher interest rates and loan establishment fees.
Lendi can guide you through the process of consolidating your debt and refinancing. Get in touch with a Home Loan Expert today to find out what your options are.
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To find out if debt consolidation is the right move for you, have a chat with a Lendi Home Loan Specialist for free expert advice.
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The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.
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