Have You Thought About Debt Consolidation Home Loans?

By Angela Monroe - September 11, 2018

Can you benefit from a debt consolidation home loan?

For many people with bad credit, it’s a daily challenge to keep your finances on the right track and work towards eventually improving your credit score. If you have multiple loans – including your car loan – you could consider a debt consolidation home loan.

There are various benefits to consolidating your car loan with other debts that you may have and it’s a relatively simple process to go through.

What is debt consolidation?

Quite simply, you’re consolidating all your existing debts into one loan. It’s really important when you do this to find the right lender, so always ask for expert help if you’re uncertain about a lender you’re considering.

Done correctly, debt consolidation can help you to manage your repayments better, especially if you have lots of small loans such as credit cards, car loans, and student loans. It’s also a great way to avoid any missed payments or defaults on loans. This is essential if you already have bad credit and want to aim to improve your financial record.

What are the benefits of debt consolidation home loans

There are benefits of consolidating your debts into your home loan, including:

Make one repayment only:

This makes it easier to keep track of your payments and you’ll be able to budget for the repayment and get organised. You’ll also have the peace of mind that the amount due is always the same – making it easier to plan financially.

Save on fees and interest:

With multiple debts, you’re probably paying multiple annual fees as well as interest on each individual loan. By consolidating your debts into one, you’ll only pay one lot of fees and one lot of interest.

In addition to this, interest rates for home loans are much lower than those for credit cards which could help to bring down your overall repayments.

Be certain that you’re reducing your debt:

People with multiple loans often find it hard to keep track of their payments and too many people end up simply paying off the interest on some of their loans each month. By consolidating your debts, you can really work to reduce your debt as well as covering the interest and fees.

What should you consider before using a debt consolidation home loan

It’s good to understand as much as you can about consolidating loans with bad credit so that you are prepared and can work with a lender to find the best option for you.

Remember that some of your loans may have early payout fees attached to them, which you may be liable to pay if you decide to end the loan earlier than scheduled. You’ll need to calculate the cost of these to make sure it’s worth consolidating your loans in the long term.

You need to calculate things properly when thinking about using a debt consolidation home loan. It’s really important you ask for expert help if you’re at all unsure about whether it’s the right option for you.

Ultimately you also need to ask yourself whether you can pay back your debt consolidation home loan. If you think you will struggle to do so, it’s better to speak with your lender honestly and openly, and consider all your options. This could save you further issues and avoid your bad credit from getting any worse.

Find out how we can help you with a debt consolidation home loan.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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