What is a debt consolidation personal loan?

Welcome to the finance on fire podcast written article, my name is Cameron Parker and I am your host for this and each episode of the podcast.

The Finance on fire on podcast is where we answer your personal finance questions in under a minute. Brought to you by the team of Financemi.

Today’s question is:

“What is a debt consolidation personal loan?”

All right so what is a debt consolidation personal loan, put simply is where you take all your credit cards, personal loans or car loans and you roll it all into one easier to manage loan.

There are several benefits of a debt consolidation personal loan, such as:

Benefits of a Debt Consolidation Personal Loan

Instead of having say five repayments or four payments for different loans coming out at different times of the month for different amounts, you now having just one repayment. Tso much easier to manage your day-to-day finances.

As well as simpler finances, the combined interest rate is hopefully going to be cheaper than what you’re currently paying. If you looked at the combined interest rate of multiple loans or credit cards often you are paying a much higher rate than a standard personal loan. Saving interest in the long term, means more $$$ in your back pocket.

Another benefit is you can stretch out the repayments to say 5-7 years, which reduces the overall amount you pay each month. The repayments will also have a set end date, rather than the never-ending interest only of a credit card. Each payment you make will also lower the amount you owe in total so you can see over time the amount you owe reduce.

Ultimately the end goal is to have no debt at all, and by taking out a facility that has a set time frame to repay, simpler monthly management, saving interest and a lower repayment means a win win for most people.

We write a lot of debt consolidation loans and would be more than happy to review everything for you with no obligation. Just send us an enquiry by clicking here: “ENQUIRY”

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Regards,

Cameron Parker

www.financemi.com.au