Debt Programs

You can combine or “consolidate” all your existing loans into a
single loan to make it easier to monitor debt levels and organize repayments. Debt consolidation often provides a lower interest rate
and lower repayments.

 

It is preferable to apply for debt consolidation when you have a
healthy credit score as there will be a greater selection of loans to choose from with more preferable interest rate terms.

 

Debt Consolidation Products

There are different options available, depending on your personal circumstances.

 

Balance Transfer Credit Cards

 

For small sums of under $1000 balance transfer credit cards may
offer an introductory period of 18 months, interest-free. There is, however, a balance transfer fee of 3 percent. It is important to pay down the amount transferred within the introductory period as the standard rate you would have to pay after this period may be greater than typical credit cards.

 

Refinance Your Mortgage

 

Cash-out refinancing of your mortgage could significantly reduce monthly repayments on high interest debt, and improve your daily cashflow.

 

It is important to note that your debts could rise as debt repayments are spread over a longer time period - even if the APR is low. Furthermore, refinance has the effect of turning debt from an
unsecured loan into a secured loan, with the risk of foreclosure on
your home if you fail to keep up with payments.

 

Home Equity Loans and Lines of Credit

 

Home equity loans give you a lump sum which is repaid in equal installments over a fixed period. You borrow only what you need, and are charged interest only on what you borrow. Rates are usually competitive, as these loans are secured by the equity in your home.

 

Personal Loans

 

A personal loan as “unsecured debt” is likely to have a greater APR
than mortgage refinancing and home equity loans which put your
home at risk. However, the rate may still be much lower than the rate
on your credit cards and other high-interest debt.

 

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