Debt consolidation is taking a new loan from the bank or non-bank lender at a lower interest rate or extended terms to replace your existing debts such as outstanding credit cards, hire purchases, personal loans and car loans which are at a higher interest rate.
Why consolidate your debts:
Costs of debt consolidation:
A recent example:
A lot of his short term debts were on interest rates above 20%, so we significantly dropped this and increased his debt term. This solution was focused on improves his cash flow by lowering monthly payments and extending terms. The repayments for his new situation were $1,417 per month including all his short term debts and the fee. When you need a non-bank lender there is an establishment fee payable which gets rolled into your consolidated debt.
May I consolidate debt onto my mortgage?
Yes, we highly recommend because the interest rates of home loan are so much lower than the personal loan. We could complete this by refinancing or mortgage topping up. You will get a separate loan account, often using a 5-10 years term to clears your debt.