It’s the perfect time right now to make your way out of debt and to follow through on that popular New Year’s resolution – ‘to get ahead financially!’ However, in spite of the Reserve Bank’s respite on raising interest rates in January, and the sharp fall in the number of Australians taking out home loans, economists predict Australians can still expect at least two more rate rises during 2010.
Debt consolidation is the process of tackling multiple debts by merging all existing debts into a single loan with a lower interest rate. As you only pay one monthly instalment rather than several, the interest rate will be lower as it’s charged on a single debt instead of many; thereby reducing immediate monthly repayments.
Debt Consolidation Options
Chris Riotto, Managing Director of the Australian Lending Centre, believes debt consolidation is an excellent option offering multiple benefits to those trying to stay afloat or to merely get ahead financially, including saving money by reducing the amount of interest paid; reducing repayment periods; improving personal cash flow by increasing disposable income; and saving time through one single easy-to-manage repayment.
Chris Riotto says that there are several types of debt consolidation loans and strategies available. Under this strategy, debts are typically bundled into a mortgage because home loan rates are usually the lowest available, whilst providing the lender with extra security.
Alternatively, many people who consider consolidating their debts aren’t struggling to make their repayments, but simply realise that using their property is a worthwhile idea to save money. Why continue paying exorbitant interest rates on personal loans or credit cards, when you can consolidate your debts at favourable home loan interest rates into your existing mortgage.
Chris Riotto insists that responsibly using your mortgage to pay off other debt can help you regain control of your debt and can help you save money in the long run.
For those looking to consolidate, but who may not qualify for standard bank loan products, rest assured there are other options to help you. Chris Riotto says Australians should not lose hope when their bank turns them down on a debt consolidation loan.
Australian Lending Centre has a range of products designed to help people get out of debt – you can get a free debt assessment with no credit check by spending one minute filling out the ‘express enquiry’ form on the right or by phoning 1300 138 188 today.