Frequently asked questions
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What interest rates do you offer on your unsecured debt consolidation loans?
Unlike home loans, the interest rates on personal loans are generally not “black and white”. The interest rate will depend on a number of factors such as whether security is offered, whether you own a property, how good is your credit history and how long have you been in your job. To obtain a rate quote please call us.
I have more than 5 credit cards and personal loans and I am in arrears on a few loans. Can I still get a debt consolidation loan?
If you own a property with some equity you may be able to obtain a debt consolidation loan in this situation. If you don’t own a property it would be more difficult to consolidate your debt if you are in arrears.
If I consolidate my personal loans into a home loan won’t I pay more interest overall since the loan term will be 30 years instead of the 5 year term on a personal loan?
Even though the interest rate on a home loan may be lower than 4% in many cases (as of 2018) compared to personal loan rates of 11-20% it is possible that you could pay more interest overall if you consolidate a personal loan into a home loan with a 30 year term.
The total interest you would pay on a $20,000 personal loan at 15% p.a. over a 5 year loan term is approximately $8,548. If the same $20,000 is borrowed using a home loan rate of 4% p.a. over a 30 year loan term the total interest paid over the term would be approximately $14,374. So $5,826 more than the personal loan.
So the key when consolidating personal loans into a home loan is to create a separate home loan split and use a shorter loan term. Even taking a $20,000 loan at 4% p.a. over a 10 year loan term would reduce the total interest payable to $4,299 which puts you in a better position than you would be in the personal loan.
Need help? Give us a call.
Why not give us a call, or send us an email and get a direct response from one of our finance experts. We’d be happy to give you a hand and help point you in the right direction.