Consolidating debt: The benefits of refinancing
- Posted Managing a Loan
Consolidating debts can be a good option if you wish to get on top of your existing debts and make your everyday repayments a lot more manageable.
It is a type of home loan refinancing that draws in debts, such as credit cards, phone bills, personal loans and car loans into one loan account.
One debt, one regular repayment
By consolidating your debts, you have the advantage of just one regular repayment – making it easier to budget and manage your finances. Having one loan reduces the amount of time spent keeping tabs on multiple loan accounts and managing repayments.
Depending on your personal circumstances, you might also consider switching to fortnightly repayments as opposed to monthly payments. This could help you to pay down your loan sooner and potentially save thousands of dollars in interest over the term of your loan.
One convenient interest rate
When you look at the high interest rates on personal loans and credit cards, you can already see why consolidating your debts through refinancing may be an attractive option.
Refinancing allows you to roll all your personal debts and liabilities into one loan account – subject to one interest rate, making your repayments a lot more manageable. While the interest rate is often slightly higher than a standard variable interest home loan rate, the collective difference is may be more beneficial.
Less fees and charges
If you look closely at your credit card agreements, you’ll probably find that you’re being charged heavy annual fees. If you decide to refinance and consolidate your debts, you’ll have only one set of administrative fees, making it much easier to know where your money is going.
Improved cash flow
When you consolidate your debts you free up monthly cash flow, because you have fewer bills to pay. This can be beneficial for you if you have trouble with cash flow each month.
At Pepper there is no limit on the number of debts that can be consolidated into your home loan. Loan applications are subject to Pepper’s normal credit assessment and loan suitability criteria. Speak to one of our Lending Specialists on 13 73 77 about how you can potentially consolidate your debts with a Pepper home loan.
How much would you like to borrow?
Try our Home Loan Pre-Approval Tool to find out if Pepper can help.