A good reason to refinance your home loan might be to consolidate your debts and only have one monthly repayment.
If you have multiple debts from various sources or institutions such as a home loan, personal loan, credit card or other high interest loans, and you are having trouble paying these off, then it could make sense to roll these debts together with your home loan. The interest rate on credit cards ranges from 10% to 20% and for personal loans the rate can be anywhere from 9% to 15%. By consolidating these debts into your home loan you can significantly reduce your monthly repayments.
To consolidate your debts with a major lender you must have made all of your repayments on time in the last month for your unsecured debts and on time for the last six months for your current home loan. Banks quite often have a limit on the amount of debts they will consolidate.
We have lenders on our Panel that will look at unlimited debt consolidation to 90% LVR in both Full Doc and Low Doc with clean credit or credit impaired.
What is Debt Negotiation?
Debt negotiation is a negotiation between you and your creditors to settle on terms that are mutually beneficial for both parties to reduce your debt level while your creditors receive payments they may not have otherwise received.
We negotiate on your behalf and arrange for the reduction and payout of your debts in a lump sum at settlement. This provides us with significant negotiation power and in many cases allows us to reduce your debts significantly.
This is not a formal debt agreement and our activities will not be noted on your credit file and will have no adverse effect on your credit score. However, for any accounts that are currently listed as a Default or Judgement and showing as Unpaid on your credit file before you engage our services will be listed as ‘Paid’ once our service is completed.
No reduction of your unsecured debt – NO FEE… it’s that simple.
Our fees for Debt Negotiation are based on how much we save you and are paid from these savings at settlement of your mortgage refinance. We would be happy to explain our fee structure with you at any-time.
The types of unsecured debts we negotiate include but are not limited to:
- Credit Cards
- Personal Loans
- Debts that have been sold to Collection Companies
- Telecommunication Companies
- Business Debts
- School Debts
Generally we are unable to negotiate on secured debts (like a home loan or car loan), because the creditor is more likely to repossess a house or car than accept a payment for less than it’s worth. However in the case where they feel the security they hold or sold is not sufficient to retire the debt, negotiation may be possible.
Can I still get a reduction in Unsecured Debt if my repayment history is perfect?
Yes, we can still negotiate a reduced payout, however our greatest successes are with older debts or debts that are in arrears. With an unsecured loan, arrears are very serious as other than legal action their avenues to recover debts are very limited. If your loan is in arrears it will almost certainly be red flagged by the creditor and they will be actively seeking a resolution.
Let us deal with your creditors, it could save you thousands!
- We will take the time to learn about your particular circumstances and inform you of your options and answer any questions you have.
- We will contact your creditors directly, inform them we are acting on your behalf and ensure that all further calls and correspondence are to be directed to our company, no more harassing calls or letters. Should there be any legal action under way we will work with the credit provider to halt this action until we resolve the matter.
- We will negotiate your payout figure; in some cases we are able to reduce this figure by more than 80% however savings of 40% to 60% are more common (results will vary depending on circumstances such as the age of the debt, who the credit provider is and the current state of the debt).
The above gives you an overview of product perimeters however it is best to complete our Application Form or Phone Direct so you can discuss your situation with an expert who will analyse your unique circumstances. It is important to deal with a broker that has several options and is experienced in dealing with Debt Consolidation and Debt Negotiation.