Consolidating Your Personal Debts
Many people are realising the equity in their home to consolidate their other debts such as car loans, personal loans and credit cards. The obvious savings being the interest rate, however, you must ensure you structure it correctly or else you can actually be paying more interest, see our comparison below.
Present Situation |
Minimum monthly repayment |
| Car Loan ($15,000) | $450 |
| Personal Loan ($8,000) | $310 |
| Credit Card ($4,000) | $120 |
| Home Loan ($100,000) | $650 |
Others recommend consolidating your debts into one home loan we at Image Financial Group on the other hand suggest you split your home loan, see why: |
|
Other Recommendation |
Image Financial Group Recommendation |
| Home Loan (ALL DEBTS COMBINED $127,000) $823PM Interest = $169,280* |
Home Loan $100,000 $650PM - Interest $107,000* Personal Debt $27,000 $407PM - Interest $7,188** |
Total Interest PayableOther = $169,280 |
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Want to know the correct way to structure? Contact us
*Assumption based on an interest rate of 6.75%pa over 30yrs, principal and interest repayments
** Assumption based on an interest rate of 6.99%pa over 7yrs, principal and interest repayments
N.B. Interest Rates current as at 12.4.2006. Comparison rates available upon request.
