* information correct as per time of posting
If you need to get urgent cash flow relief from the burden of high monthly debt repayments, then looking for reputable companies offering debt consolidation loans are the way to go.
The easiest and by far the least risky way to consolidate debt is through your home loan. You’re probably wondering why I say it’s the least risky because you’re basically putting your house at stake?
I say it’s the least risk form of debt consolidation because often, opting for a debt consolidation loan by way of a personal loan can be a very expensive endeavor.
The idea is to reduce your interest and to reduce your monthly installments and most times a personal loan is much more expensive, not to mention the high interest.
Also, if you consolidate debt through your home loan you automatically have a much smaller repayment because the home loan is over 15 or 20 or 30 years and that will bring great relief monthly while you’re settling the debts.
Thereafter, you can use at least half of what you’re now saving on installments per month to make additional payments into your bond. This way you reduce the term of your home loan and save on interest.
Debt consolidation is not ideal, but it does help you to manage your debt better and takes away the worry of high monthly debt payments. Also, it gives you peace of mind knowing that you only have one debt to repay on a monthly basis.
* information correct as per time of posting
Debt Consolidation – Many people are in debt struggling to pay their monthly bills. Most people are looking for help in creating a debt consolidation plan in hopes to be able to afford their payments and still be able to live. Some people will go to a consumer credit counseling agency, but many people are learning how to do it on their own.
Having a debt consolidation plan, individuals can determine the best way to get out of debt. There are so many different methods to getting out of debt, but all of them require you plan it out and budget it correctly. This will also help the individual to stay out of further debt.
1. List Your Debt
Always start out by knowing exactly what the total debt owed is. Grab a pencil and paper, and make a list of everything that is owed. Any cars, your house, student loans, credit card debt, store accounts, etc that is owed should be listed. Leave out any second mortgages or home equity loans. Rewrite the list in order, by the highest interest rate to the lowest interest rate.
2.Calculate Monthly Payments
Next calculate the monthly payments for each one of the debts listed. Write down the minimum monthly payment for each one. The goal is to reduce your monthly payment amounts.
3. Calculate Outstanding Debt
On the other side of each of your outstanding debt, write down the exact amount still owed. Add up the amount you still owe, as well as the monthly amount you spend paying your bills. Remember this amount does not include your everyday expenses such as petrol, utilities, food, etc.
4. Shop For The Lowest Interest Rate
Browse the different consolidation loans that are available today to help with your circumstances. There are secured loans and unsecured loans, but you want the lowest rate line of credit available. Shop until you can find the lowest rate with enough credit to cover your total amount of debt that you owe.
5. Contact Lenders
Contact the lender and explain that you are looking to rid yourself of your debt through their loan. This is extremely pertinent to tell them because some lenders when they look at your debt will not give you more credit than what you have. If you are closing the other accounts and getting rid of all balances, the lender is more likely to help you.
6. Create a monthly budget.
Once your old debt is paid off through the consolidation loan, it is exceptionally easy to fall back into the same amount of debt. Do not allow yourself to make that move. Track all you’re spending, and make sure your loan is paid off first.
Always pay as much as you can on the consolidation loan so that you will pay it off faster. It is crucial to be strict with your spending during this time. It is very easy to fall back into your old spending habits that got you into the mess you are in. Do not indulge or overspend with the extra cash flow you may see each month. Save, and work on getting rid of the debt completely.
Debt is something that weighs people down. Debt can truly change anyone’s mood and entire personality. Once you remove yourself from debt you will feel like you are finally free. The freedom you will feel will make it entirely worth it. Do not give up as you work towards freedom from debt!
* information correct as per time of posting
Have you found that you have been over-spending this festive season?
If you’ve answered no, you’re one of the lucky few, but if you’ve answered yes there is a solution.
Let’s help you consolidate all those credit cards and personal loans into your home loan.
If you have equity in your property and you qualify on your income, we can help you to consolidate your debt and ease the financial burden experienced by many on a monthly basis.
Taking a debt consolidation loan on your bond of R100 000 could mean a saving of approximately R5000 pm on other debts.
Think about that and then contact us: http://www.globalproperty.co.za/contactus.html
Debt Consolidation Loan: You need to take early action when repaying debt. When looking at taking a secured debt consolidation loan it will make sense because you can get rid of old debts with ease and reduce your financial burden.
Often you may even be able to get a debt consolidation loan even though you may have had some minor credit problems in the past. A debt consolidation loan will immediately settle the total outstanding amounts of credit cards, personal loans and store cards.
These types of debts are expensive, therefore getting rid of them with one big loan has many advantages. One huge advantage is that your monthly expenses will be drastically reduced, because this large loan to one institution costs must less than numerous payments to various creditors.
This means that you’ll have much more money saved every month to use as you please. You get much needed relief from the bigger debts by using a secured debt consolidation loan because it allows you apply for larger amounts against an asset of big value like your home.
The loan can be any amount, as long as you can afford it and there is enough equity in your property. The loan can also be repaid with the existing loan period or it can be re-scheduled or refinanced to 20 or 30 years.
Because you’re borrowing against a fixed asset with large value your interest rate will be much lower than unsecured loans. What’s more, if you have a good credit profile you’ll enjoy a debt consolidation loan at a lower interest rate.
If you have had credit problems in the past you will be penalized by paying a higher interest rate. To get competitive interest rates, go online and look for a reputable mortgage broker to do your debt consolidation loan as they can go to the various banks and seek the best rate.
Always make sure you pay your full installment on the debt and on time.
Should one consolidate debt in a time when interest rates are so low? Is it a good thing? The correct answer would be absolutely ‘yes’.
Why do so many people shy away from the option to consolidate debt? To answer that question we’ll discuss 2 options and what their good and bad points are.
Consolidate Debt with a Personal Loan.
If you try to consolidate your debt with a personal loan you will probably end up paying a large installment because personal loans go up to a maximum period of 5 years.
The interest on a personal loan is also much higher than a home loan. If you are not a home owner, then a personal loan is the only option you have if you want to consolidate debt.
Have a look at the various accounts you want to settle and compare that to the personal loans’ interest rate and decide if it would be worth while. As a last resort to improve monthly cash flow – add up what you want to consolidate and compare that to what the new personal loan installment will be and see if you will be better off at the end of the month.
Consolidate Debt with a Home Loan or Refinance Loan
If you are looking at using your home loan to consolidate debt it would be a wise option. This is because interest on a home loan (at time of writing this article) is only 10.5% and all other debts normally average to more than 20% p.a., so this shows you will save quite a bit per month.
You will immediately see a drastic improvement in your monthly cash flow after you consolidate debt, but remember, you should put at least half of what you now have extra into your bond account, otherwise you’ll be paying off those debts over 20 years.
So yes, by getting a loan to consolidate debt you could significantly improve your monthly cash flow, but you must look at the various interest rates and monthly installments before blindly going into it.
Click here for more information on how to consolidate debt.