Debt Consolidation involves taking out a loan to pay off smaller multiple loans. This can be at a lower or higher interest rate depending on your credit score. Consolidating your numerous debts into your mortgage is the most common. The mortgage has usually a lower interest rate (+/- prime interest rate) compared to an unsecured debt consolidation loan (maximum interest rate charged of 28%). However, it is important to make sure that you are able to pay the increased instalments as there is risk that you might lose your property if you cannot manage to payback the extended loans.
Managing numerous financial expenses can be complex and can hinder the ability to effectively track cash flow. If you have accounts housed at many different financial institutions and are struggling with debt, then consolidating your financial accounts into one relationship can help you meet your day to day cash management needs.
When you apply for debt counselling your debt is consolidated into one easy payment as well. Debt Consolidation performed by way of debt counselling will provide you with the benefit of a comprehensive view of your finances to help you stay on course towards achieving your financial goals.
You will benefit from the following by applying for debt counselling:
- Consolidating your debt into one affordable repayment. Debt Counselling looks at affordability so that the consumer can live within his or her means.
- Cash flow relief after setting up a customised budget which caters to your family household expenses. Debt counselling is premised upon a workable budget which one has to live on. A debt consolidation loan usually does not cater fully to day to day cash management needs.
- Interest rates can be reduced to low level or as low as zero. This is highly unlikely when compared to an unsecured debt consolidation which can attract interest rates which should not exceed 28%. It is important to read the fine print especially when applying for an unsecured debt consolidation. There are usually expensive with initiation fees and in some cases third party fees for arranging credit lines.
Contact Debt Sage, the debt consolidation experts today. We will together review your case and see how we can help you. We offer free financial health check and advice so that one can make the right financial decision.