Stress-Free Life Solution With Debt Consolidation Loans
Debt Consolidation Loans: There are many financing companies and other lending companies that earn a lot of money by “selling” debt consolidation loans, a process of refinancing loans and other debts that you may have.
These finance companies will often “sell” their loans based on the fact that your weekly repayments are less, but do not always tell you that they will extend the term of the loan, they do not tell you about the higher interest rates or the extra costs that You will be taxed.
People want to consolidate their debts to help their financial situation and enable them to better manage their money; however, you must also ensure that you not only extend the loan period with higher interest rates and more costs, just to reduce the weekly repayments.
The right reasons for consolidating debts
It is easy to be burdened with debts and as a mortgage broker, we see many people struggling to make all their loan payments. People may say that you should never have contracted so many short-term debts, but there are many situations where it happened and it makes no sense to stand still too much in the past anyway. We need to deal with the debt that you now have and consider whether a debt consolidation loan is the right option. (Post: Debt Consolidation Loans)
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The first thing a mortgage broker should do is get a position overview from you so that they can determine exactly what debts you have. Only then should they assess which debts must be consolidated.
This decision to refinance debts is usually based on the interest costs that you pay for each debt, any penalties for early repayment, the remaining term and the actual repayment amount.
You should refinance IRD debts wherever possible, because the interest and fines can be extremely heavy, but why refinance an interest-free loan?
There are times when you can refinance an interest-free loan; however, you should carefully consider this in the overall debt restructuring to ensure that this is the best thing to do – it would not normally be. (Post: Debt Consolidation Loans)
What if I have bad credit?
As mortgage brokers, we are approached a lot by people who have too much debt and want to get a loan for debt consolidation, but have bad credit and therefore think they cannot get a loan.
There are degrees of bad credit;
1) A few small default values ​​in your Veda report – we look at what this is and the reason why it happened and in general, if we can explain this, the lenders will approve.
2) Greater default values ​​and assessments of your Veda report – we need a better explanation and we may be limited in the choice of lenders; However, there are a number of lenders, including non-bank mortgage lenders who have options.
3) Loan or mortgage arrears – every new lender wants an explanation of why the loans or mortgage have a payment arrears, and this may be the reason why we want to arrange a debt consolidation loan.
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Without looking at your personal situation, there is no way to know if you can consolidate your debts when you have bad credit, but it is certainly worth looking at. A debt consolidation loan is perhaps the best way to clean up your credit and manage your way back to ‘good’ credit. (Post: Debt Consolidation Loans)
Watch out for the costs of debt consolidation loans
The costs of debt consolidation loans vary from company to company and depend on your situation and security. An unsecured loan is almost always more expensive, so it is certainly worth considering using your vehicle or property to secure the loan and thus reducing the cost of the loan. In general, you also pay more if you have bad credit and other situations in which you fit outside the “ideal profile” of the lenders.
Comparison of debt consolidation loans
It is extremely difficult to find the information to make a good comparison of the debt consolidation loan because many of the options for you are based on a risk assessment that determines the interest rate that you are charged. (Post: Debt Consolidation Loans)
The costs of a debt consolidation loan are normal;
Debt Consolidation Loans: The interest rate – although it is often difficult to find out what the interest rate is on debt consolidation loans, you should always ask this and compare it with what you are currently paying and also with other options. From their websites GE Money quotes an example of a 5-year loan with an interest rate of 19% and Finance Now is quoting interest rates from 13.95% – from!
Easy Loans (NZ) say they will quote on a case-by-case basis, Geneva Finance, QuickCash Finance, Instant Finance and Max Loans do not mention rates we could find.
The fees – many financial companies charge a formation allowance and some also charge ongoing monthly costs and termination and / or early repayment costs.
Insurance – most financial companies will “sell” an insurance protection policy for every loan. This is generally a very expensive way to buy insurance and we recommend that you talk to an insurance advisor instead of taking these options.
Our experience shows that many of the debt consolidation loans have an interest rate between 20-30% with a formation allowance and they would also contain expensive payment protection insurance that would not be necessary if you already had your own income protection insurance.
Fast loans don’t often make sense
Debt Consolidation Loans: The focus of most financial companies offering debt consolidation loans is the speed of the application process. They advertise “1-hour approvals” and “online applications” and even the names focus on the speed of acceptance with Finance Now, Instant Finance and Easy Loans (NZ) all giving the impression that you can settle your debts with the minimum of fuss. (Post: Debt Consolidation Loans)
Perhaps speed is not the most important thing to consider!
You may want to take a little more time to ensure that you get the best option that can save you a lot of money in a very short period of time.
Negotiation of repayment of existing debts
There are often a number of savings that you can make when repaying existing debts.
Debts transferred to a collection agency such as Baycorp or Veda are often easy to negotiate a discount if full settlement is offered.
IRD debts often include excessive interest costs and fines and a discount can often be given if you are able to offer full settlement.
Most personal loans and hire purchase agreements include payment protection insurance. You must be able to get a refund for the part of the coverage that has not been used due to early repayment.
Talk to your mortgage broker and they can help make sure you have access to one of these discounts – they can save you a lot of money and can be a good reason to consolidate debts. (Post: Debt Consolidation Loans)
Mortgage brokers also do debt consolidation loans
Mortgage brokers talk to many people who have had situations where cash flow problems occur and want to consolidate debts.
Mortgage brokers usually deal with homeowners or those about to buy their first home; however, most mortgage brokers know a lot about debt and are usually the best people to talk to if you want advice on the best options for a particular situation.
Most mortgage brokers can show you the actual costs of a debt consolidation loan and then it is up to you to weigh your options. Mortgage Link is one of the best mortgage brokers out there and your mortgage adviser knows how to offer you the best debt consolidation options and shows you how to structure your debt so that you can pay it off faster.
Before trying the “quick” options, consider whether you should take a little more time to meet a mortgage broker in person and ensure that you get a suitable debt consolidation loan. (Post: Debt Consolidation Loans)
You have the choice – you can use a mortgage broker or go to the bank yourself.
A mortgage broker should be able to give you a better choice of lenders, better advice on how to structure your mortgage and know how to ensure that you get the best deal.
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