Debt Consolidation
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What is Debt Consolidation?
Debt consolidation is a process of utilising the equity in your home to combine existing debts with your home loan. Having debts is not necessarily a bad thing, but often circumstances change and people find themselves struggling to manage multiple loan repayments every week. This is where consolidating your debts can help.
Consolidating your debt allows you to combine multiple smaller debts like a credit card or personal loan into one easy-to-manage home loan repayment which can help to ease your weekly budget.
What are the benefits of debt consolidation?
When considering debt consolidation, caution must be taken to ensure that your new home loan is structured in a way which will be beneficial over the life of your loan. If your new loan repayments are not structured correctly, you could wind up paying substantially more interest. An example of this is with personal loans which are over a short time period. Once this debt is consolidated into your home loan, the debt will be paid over a much longer period which will result in a much higher amount of interest being paid.
This is where the team at Smik Home Loans can help. We will work with you to establish your financials goals and ensure any debt consolidation home loan is set up correctly.
