Debt Consolidation Loans - Your Guide

Non Conforming Loans Podcast

Consolidating debts into your home loan can be a powerful tool for managing your finances and achieving greater financial stability. Owning a home is a significant milestone in one’s life, and it comes with numerous financial benefits. One such advantage is the ability to tap into your home’s equity to consolidate high interest debt.
In this podcast, we’ll explore what debt consolidation with a mortgage entails, its benefits, and important considerations. If you are juggling multiple debts, a debt consolidation loan could make it easier for you to manage your repayments. Here’s how.

If you’re feeling like you can’t keep up with all your debt repayments and just NEED to find a way to make it easier, a debt consolidation loan could help you do that.

A debt consolidation loan combines some or all of your existing debts, such as credit cards, personal loans, car loans and other high interest loan products, into your home loan.

The idea behind debt consolidation is to make it easier to manage your repayments.

An added benefit is, if you take out a loan with a lower interest rate than what you’re currently paying on your existing debts, you could actually reduce your overall debt and save on monthly fees.

Another benefit of having all your debts consolidated into a home loan is that term loans are repaid over a fixed term, so you have a clear timeline for when you can be debt-free.

But, if the personal loan is more expensive than your existing debts, you could accumulate more debt through interest and fees.

So, it’s super important to compare the interest rate and fees of any new loan you’re considering against your current debts.

To avoid making the wrong decision, it may be helpful to chat with a mortgage broker - especially if there is late repayments or arears.

As a go-between for borrowers and lenders, mortgage brokers can play a useful role in accessing more loan options for you.

This way, you can compare interest rates and see if a debt consolidation loan would be in your favour or not.

You’ll also need to watch out for the term of your loan.

The longer the term, the lower your regular repayments would be, but the more you would pay in total.

So, If you’re looking into debt consolidation loans as a solution, we would highly recommend getting some professional advice from one of our lending specialists at Non Conforming Loans.