Don’t let your debt spiral out of control
Debt consolidation is taking a new loan from the bank at a lower interest rate to replace your existing debts such as outstanding credit cards, hire purchases, personal loans and car loans which are at a higher interest rate.
Your current debts which were taken from private finance companies at interest rates varying between 10-25% can be paid off and replaced by taking a new loan from the bank at home loan interest rates. This is borrowed with your home acting as security, provided your current home loan is below 80% of the value of the home.
Why consolidate your debts:
- Replacing your credit card and hire purchase debts with an additional loan on your home will lower the overall interest rate you pay on your debts giving you a bit more breathing room so you can use the money you save to cover other necessary expenses.
- Budgeting can be easier as you have only one loan repayment to track rather than tracking repayment of each debt individually.
- Having your credit card and hire purchase debts consolidated at a lower rate can free up more money which you can direct towards your home loan repayments thus paying your home loan off faster.
- Taking this additional debt on your home loan will give you more time to repay these debts as the repayment term on home loans is longer than credit card and hire purchase loan terms.
Costs of debt consolidation
When you repay your external debt, the debt company may charge an additional discharge or early repayment fee.
Since banks only give upto 80% loan when it comes to debt consolidation, you may need to get the valuation of your house to see how much of your external debts you can consolidate.
As you will be taking a new loan from the bank to repay your external debts, banks may ask you to sign the new loan documents in front of a solicitor who will charge you a fee.
Why Choose Global Finance
Assess how much debt you can consolidate
We can help you work out which debt you can consolidate, the total amount you can consolidate, and which debt will be most beneficial to consolidate.
Structure your home loan to repay it quicker
We will structure your current home loan and your new consolidated debts in a manner where you can repay both as quickly as possible without paying any additional instalments.
Lower your interest rates on external debts
Lower the interest rates you pay on your current debts to home loan interest rates so that you can use the freed up money for other well deserved uses.