If you’re juggling multiple debts, one way to simplify your finances is to bring all your loans together. This is what’s known as debt consolidation. Not only could it make managing your finances easier, if you structure your repayments in the right way, it could also save you some money and even help you pay your mortgage faster.
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Debt consolidation is when you combine your outstanding debts into one loan, rather than paying off different loans separately like your credit card, personal loan and car loan at different interest rates – and sometimes with different lenders.
One of the biggest potential benefits of consolidating into your home loan is having just one repayment to monitor in addition to saving on interest, which can help make managing your finances easier. You could even put what you save on interest towards making extra home loan repayments.
However, keep in mind that you might end up paying more interest in the long term – home loans have a longer loan term, which means a greater amount of repayments over time.
Use our extra repayments calculator to see how much money and time you could save by making extra home loan repayments.
Consolidating your debts into one personal loan could potentially save you money by eliminating multiple fees across multiple debts. And if you find a loan with a lower interest rate than the one on your existing debts, you’ll be paying less in monthly interest.
Don’t worry if you have debts with multiple financial providers. You can still consolidate them into one loan. For example, if you have a personal loan with a different provider to your home loan, you can consolidate your debts and essentially pay off the personal loan by adding it to your home loan.
You can consolidate your credit card, personal loan, car loan and home loan into the same loan.
If you have multiple credit cards, including one with another bank, you can transfer the balance into your existing credit card with us – it’s called a balance transfer. This is another way to help simplify your finances and repayments. Find out more about balance transfers.
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Talk to a Home Lending Specialist – when and where it suits you.