Struggling with high interest rates on short term debts such as hire purchases, credit cards or personal loans??
Then maybe you should consider debt consolidation.
What is debt consolidation?
It’s the combining of several short term debts incurring high interest rates into one loan at a lower rate of interest.
Who should consider debt consolidation?
If you own your own home you can consolidate your short term debts into one loan by taking out a new mortgage against your house which is sufficient to pay off all the smaller debts.
Remember - the cheapest money you can borrow is generally housing interest rates with your mortgage.
What are the benefits of debt consolidation?
- You have only one repayment each month.
- You have to meet the repayment criteria of only one lender - your bank.
- Your overall interest rate will be lower - compare 3.49% on your mortgage with up to 22% on your credit card debt.
- The length of your term can be structured to suit your needs.
Let me give you an example:
A short term debt of $30,000 made up of two hire purchases, two credit cards and a personal loan may cost $1,200 per month in repayments.
Consolidate this debt into a home mortgage and the repayments will come down to approx $180 per month over a 30 year term. Pay $580 per month over a five year term and the repayments are reduced by more than half and the $30,000 debt can be paid off in full in five years!
If you would like to talk about consolidating debt, please call me at Yes Mortgages on 823 4531.
Or feel free to contact me via email: firstname.lastname@example.org