Mortgages, car loans and credit cards are common debts that many Australians take on every day. If you have multiple debts, consolidating them into your home loan or into a personal loan and using that loan to pay off each of your debts can help with budgeting and repaying debts.
Consolidating debts into your mortgage has several immediate benefits.The first is the removal of managing several repayments each month (or repayment period). Secondly, it allows you to potentially reduce your repayment amounts to improve your cash-flow position. And finally, it can reduce the overall interest cost you pay each year to the lender (which means more money in your pocket long-term).
Prior to consolidating debts, be sure you don’t get stung with cancellation or transfer fees from other card and loan providers.
Each time you go to take out a loan or credit card this will leave an inquiry on your credit file. If there are too many inquiries on the file then lenders can look adversely at this and can negatively impact your application. Using a broker or other professional before making can inquires can help to minimise the times that inquiries are made.
ThinkBig Money can put you in touch with a trusted Finance Manager to determine if this is a viable solution for you.