Imagine just one payment if you consolidate all your debts into your home loan!
Too many repayments on existing debt can affect your ability to meet your monthly loan repayments. Many New Zealanders with existing home loans have multiple debts including credit cards, store cards, hire purchases, personal loans and car loans. These repayments can make budgeting and all the monthly repayments difficult to keep track of.
Clients are often attracted to P2P lending from the likes of Harmoney and Lending Crowd and these solutions can be presented as a quick-online-fix, but offer no input into debt consolidation or reducing the burden of debt and can have higher rates, shorter terms and establishment fees making it harder for you to be debt free. You will also find that many of these facilities are on floating rates, so if interest rates change and go higher your repayments will have to increase.
Consolidating your debt into one new home loan often frees up cash and creates a simpler payment solution for your existing debts, including credit cards. With the convenience of just one mortgage your repayments could match up with your paydays and be more manageable, and easy to budget for. You could also consider consolidating your short-term debt and credit card balances into a separate short term home loan. This gives you the benefit of home loan rates which may be as much as 15% – 20% less than what you are currently paying. By paying less interest you can pay the debt off faster.
If you think debt consolidation is an option for you, call the First Rate team now to discuss managing your loans effectively, so you sleep better at night.