Fast Tracking your Debt Consolidation
What is debt consolidation?
Debt consolidation is the roll of rolling over multiple debts into a single loan payment which is subject to a single interest rate with a single monthly payment. This works perfectly if your debts aren’t excessive and you have a good credit history. It is also important to make sure that you have been paying your minimum payments without any delays. This makes managing debts situations significantly easier and often ends up paying less each month than you are paying before.
Why you should think about debt consolidation?
Why should you consolidate debts?
This is an easy way to consolidate your debts by reorganizing multiple bills and move the debt owed from high-interest credit cards and personal loans to a lower interest rate loan. Debt consolidation may also be useful when you are looking at reducing the time and the amount spent on paying the loans or monthly payments are currently too high.
1. To obtain the personal loan statements for the past six months.
2. To obtain credit card statements for the last six months.
3. To obtain home loan statements for the last six months.
First and foremost when considering debt consolidation you need to be sure that there is sufficient
equity in your residential property or residential investment property to cover all the loans or debts you
wish to refinance.
The next important step is to make sure that you don’t have late payments or dishonors on your loan or
credit card statements. Recent changes to consumer reporting laws now require banks and other
financial institutions to report all late payments and dishonor to the relevant credit reporting agencies.
If, by any chance, there are any dishonors or late payments they will show up on any credit inquiry
taken to support a new lending proposal. If this is the case, we would have to work with you over some
time to rectify these errors to consolidate your debts.
If there are no defaults or late payments on your credit cards or your loans then we have to arrange for
a valuation to be conducted by a registered valuer on your residential/residential investment property.
Once the valuation has been done we can then assess whether there is sufficient equity in the property
to allow us to make a case to adequately secure most if not all of your debts in a debt consolidation
loan.
Will and Jayanthi came to me with a problem. The problem was they were both earning over $100,000
each, but they were so stressed that they didn’t have sufficient funds to do shopping in supermarkets
and they had to keep shuffling money between accounts. They also found that they could not pay the
monthly bills and the credit cards and they had started paying the minimum amount on the credit card
and then paying some bills on time and deferring others depending on the money that they had. For
this reason, tensions at home were rising with a lot of finger-pointing and accusations about who was
spending what and where.
After listening to their stories, I found out that they both had over six credit cards with a credit limit of
$10,000 or more. They also had personal loans/vehicle loans amounting to about $70,000 each and a
home loan of $600,000.
After a lengthy discussion, I got them to give me one statement of each credit card, personal loans, and
their home loan statements.
We finally managed to consolidate 90% of the credit cards and most of the personal loans and relieved
the customers of the pain and anxiety and giving them the life back by improving their cash flow by
about $ 3,800.
● It simply is more convenient. There is only one lender to deal with, one set of loan
statements, and crucially, one repayment to meet and manage.
● Reduced monthly payments. Consolidating debts into one lower interest loan can help
you to save hundreds and potentially thousands of dollars in monthly interest. Credit
cards, for example, charge exorbitant rates of interest – in some cases over 21% and
being able to eliminate these excessive interest charges will go a long way towards
freeing up cash flow and giving you greater peace of mind.
● Fewer fees. Those annual and monthly service fees sure do add up. Consolidating debt
removes many of these fees entirely and saves you hundreds of dollars per year
● You can get out of debt quicker. One reduced loan repayment (compared to all of your
current loan repayments) gives you the flexibility to make extra payments regularly or in
lump sums to reduce the overall loan term
● All of this means more money in your pocket, greater financial security, and overall
peace of mind.
