Debt consolidation how does it work?

If you have multiple debts from various sources or institutions such as a home loan, personal loan, credit card or other high interest unsecured loans, and you are having trouble paying these off, then it could make sense to roll these debts together with your mortgage. 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 mortgage you can significantly reduce your monthly repayments. .

Consolidating short term unsecured debts into your long term secured mortgage will reduce your monthly repayments. However the balance owing on your mortgage increases so it is important to pay down the new mortgage with the extra money that is available. A debt consolidation strategy can only be successful if you cancel your unsecured debts and avoid running up further debt by keeping to a budget. If you can commit to that, then a debt consolidation mortgage can potentially save you a lot of money.

When we negotiate an unsecured debt or payout a debt our funders make closing these facilities a condition of settlement and where at all practical. We use funders that have either redraw or offset accounts with debit card facilities and the ability to make lump sum repayments. Visit our Calculator page for handy tools on preparing a budget, savings you can make making by making extra repayments or lump sum repayments and the savings that can be made by depositing surplus funds into an offset account.

The Benefits of a Debt Consolidation Home Loan are:

  • Only one loan to manage
  •  Save on loan fees
  • Reduction in monthly repayments
  • Avoid entering into a Debt Agreement or Bankruptcy
  • Improve your credit score
  • No more creditor phone calls
  • The opportunity to regain control of your finances

With good management and budgeting, a debt consolidation mortgage can be the correct choice for you to regain control of your finances. Contact Non Conforming Loans for further information on Consolidating your debts.