I’ve just saved one of my customers $1200 per month in financial outgoings and she is over the moon!
Loan consolidations are a good way to reduce outgoing financial commitments and breathe a little easier until you can recover, especially when you have been facing personal or relationship hardships. They are also a great tool for re-structuring how you control debt.
When you consider that a car loan of $50,000 can cost you over $1000 per month and a $10,000 credit card another $200-300 per month, it makes sense to consider ways you can reduce your payments.
One way you can get ahead is to consolidate car loans and credit cards into home loan debts and then re-structure your home loan to accommodate necessary future debt you will incur, without having to take out car or credit card finance in the future.
An easy way to think ahead is to split your home loan. Try to imagine a typical home loan of 450K split into two, one 350K and another $100K.
The 350K loan is the one you work hard at reducing long term, whereas the 100K split is used as an expense loan that replenishes funds for you through a redraw facility so that everything you pay over and above your minimum payments will sit as an available source of funds for future purchases.
As an example, instead of taking out your next car loan for instance, you may choose to consolidate your current loans into one and with the savings you make you can pay an extra $500 per month (which will go towards redraw) towards your smaller loan. Every year you will have $6K redraw which will be offsetting your home loan interest and for example after 4 years will give you enough redraw for your next car purchase at a home loan rate.
You can also choose to sweep your credit card each month so you do not pay any interest on purchases by using the funds you have accumulated in redraw.
This kind of disciplined approach makes home loan consolidations a great way to re calibrate and take control of your finances.