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Understanding the benefits of debt consolidation

Living with high levels of personal debt can be financially and emotionally draining. So it’s important to look at ways to get back on track with money management, regain control of your cash and become (and stay) debt-free. That's where the team of financial experts from Mortgage Choice in Gladesville can help. 

Part of the challenge of dealing with unmanageable debt is the need to make multiple repayments to a variety of different lenders. That’s where debt consolidation can help. It works by folding a number of different debts into a single loan.

Your home loan is often a good choice for debt consolidation as it usually comes with the lowest rate of all types of credit. The downside is that you may be transferring a short term debt (like a credit card balance) into a long term loan (your home loan). Paying a bit more off your loan each month is a sensible step to minimise overall interest charges.

If you’re not a homeowner, a personal loan can be a good choice to consolidate debt. The term is fixed so you have a clear end date, and the set repayments are easier to budget for.

So how does refinancing to consolidate debt work?

While debt consolidation can provide an immediate strategy to help you gain control over debt, it doesn’t address the underlying problems, which usually involve weak spots in money management.

As your Mortgage Choice financial adviser in Ryde & Gladesville, we can offer valuable support here, helping you learn to live within a budget, manage your money, and work towards financial goals for the future. 

To book your appointment with us, call our team on1300 552 118. 

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