Debt consolidation is a good way to relieve financial stress.

With so many individuals struggling right now, we'll look at how debt consolidation can help you alleviate some of the stress on your monthly finances this week.

Take a look at this little test.

Take three balls and try to juggle them in a row. Except for those who went away to join a circus, most individuals will certainly toss at least one of them in a few tosses.

Set two of the balls aside while throwing the third up and down (with one or both hands).

Isn’t it much more manageable?

It’s not too dissimilar to the idea of consolidating debt.

You may assist lessen the stress of juggling several debts, payment dates, and interest rates by consolidating them into one easy-to-manage loan if you have more than one loan, such as a credit card, auto loan, or personal loan.

There are also other advantages.

Taking out a new personal loan and using the cash to pay off your other debts is a frequent debt consolidation approach.

If the new personal loan’s interest rate is lower than your old debts’ (for example, a credit card with a rate of 17.99 percent), you’ll be able to pay less interest each month and avoid the dreaded late payment fees that come with those types of cards.

You can also get a better idea of when you’ll be debt-free by combining all of your loans into one.

Because you just have to pay one bill per month instead of many, debt consolidation can make it easier to manage your household budget.

Consolidating your debts by refinancing your house loan

Because mortgages have very low interest rates, another way to consolidate debt is to roll it into a refinanced house loan.

Consolidating your debts into your house loan would, in most situations, reduce your overall monthly repayments if you’re already battling with several obligations, such as a vehicle loan or a number of credit cards.

Here’s a word of caution, though.

A short-term debt (like a personal loan) can be reduced in monthly payments with this option, however debt consolidation through your mortgage can change a short-term debt (like a personal loan) into a much longer-term debt (like a mortgage).

Because of this, unless you make a lot of extra payments as quickly as possible, you may end up paying a lot more interest than you would have if you didn’t.

Creating a debt consolidation loan split, which allows you to pay off all of your short-term debts in a few years rather than over a 25-year home loan tenure, is one option to handle this problem.

Considering debt consolidation is a good idea if you’re in a pinch right now, especially with mortgage rates so low right now due to the RBA’s official cash rate at a historic low.

Contact us right away.

Get in touch with us immediately if you’d like to learn more about debt consolidation or refinancing possibilities, and we’ll help you figure out how to relieve some financial stress.

It’s also worth noting that lenders are offering a variety of financial assistance to COVID-affected homeowners, including monthly loan deferrals.

We’re here to help you in any way we can, no matter what your situation is.

To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au


Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your situation and may not be relevant to circumstances. Before taking any action, consider your particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.

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