Quite often there are things which people overlook which can save them big dollars; life insurance, home and contents insurance and the big one – our loans.  Whether that be the GE Money card we have at Harvey Norman, our car loan, those credit cards that just don’t seem to be reducing in value or even our own home.  This can be one thing that is worth spending the time to see a professional about.

Consolidating debt has many advantages,  to name a few:

• Interest rates  are reduced.  If you are paying the 21% on your GE money card then 17% on your credit card,  consolidating onto your home loan can save big dollars. This simple step of consolidating will reduce debts from 21% and 17% respectively to a much more manageable 7% that most banks offer on a standard variable loan rate.
• Multiple credit cards and personal loans bring with them multiple annual fees and charges.  Consolidating these will result in just one loan and therefore only one set of fees.
• Reducing uncertainty – by consolidating, you have one payment to pay per month instead of having many due on various days which can sometimes be difficult to keep track of.

Please see below for case study showing  Warren’s example of consolidating his loans:

Before Debt consolidation Warren is paying off 5 different loans each month

After debt consolidation Warren’s monthly repayments are reduced from $2,676 per month to $1,730 per month. He is saving $946 each month

By simply consolidating Warren’s loans, he has an extra $946 per month in his pocket. With his extra money ,  he can increase his loan repayments, start investing or saving for something special.  The world is Warren’s oyster!

By Jessica Hall Certified Financial Planner

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.