What is Debt Consolidation?

Debt Consolidation is the replacement of multiple loans and credit cards with one single loan, which has a lower interest rate and a smaller monthly repayment.

What are the benefits of Debt Consolidation?

Debt Consolidation has a number of benefits, it is very effective in reducing your monthly repayments. The major benefit of debt consolidation is that you will no longer be slugged multiple bank fees and interest charges by different lending institutions (eg. You may have outstanding debts such as: Credit Cards, Car Loans, Personal Loans, Store Cards and AGC Cards). If you can get all of your outstanding debts under the one roof with an interest rate of around 7% and only one single, low repayment, then you will be saving yourself hundreds of dollars every month AND you’ll be out of debt a lot quicker!

Example of how a Debt Consolidation loan works?

If you have a $5,000 credit card and a $15,000 car loan you will be making monthly repayments of approx $700 per month. Now, if you were to consolidate those existing debts onto your mortgage, your new repayment would only be $150 per month. So by simply consolidating and refinancing your existing personal debts onto your mortgage, you will save yourself $550 per month!

What is Refinancing?

Refinancing is the rolling of all of your existing debts into one loan, which will give you a lower repayment as well as a lower interest rate. The average Australian refinances his/her existing debts (credit cards, personal loans etc.) onto their home loan every 3.2 years.

What are the benefits of Refinancing?

There are plenty of advantages for you in refinancing your home loan. The major benefit is having a lower monthly repayment. You will also have a lower interest rate, a reduced mortgage term and we will be able to show you how to get your income to start working for you and NOT the banks!

An example of the benefits of Refinancing your home loan?

You may have existing credit card and personal loan debts totaling for example $10,000. You are currently paying $400 per month for this debt. By refinancing this personal debt onto your home loan, you will reduce your monthly repayments of $400 down to $200 per month and reduce your interest rate from 16% down to 7%. You will also own your home sooner!

Most people refinance for one of the following reasons:

You want to renovate your home.

You want to pay off debts more quickly and cheaply by rolling them into your home loan.

You want to get a cheaper rate, even if it means giving up a few loan features. For instance, many people find after a few years that they’re not making best use of a higher-rate mortgage offset loan.

You want to raise cash for a purchase such as a car or to have an overseas holiday.

You realise that your home loan doesn’t suit your personal habits. This often happens to “line of credit” borrowers, who eventually realise they’d be better off with a loan that forced them to pay it off over time.

You have a good income and you want a home loan that will actually allow your income to start working for you- an “all-in-one” account.

You are currently paying a high interest rate – for example, if you arranged a low-deposit, rising-rate home loan from your builder.

You want to switch from a fixed rate to a variable rate, perhaps because you can accept the risk of higher repayments.

You want to switch from a variable rate to a fixed rate, perhaps because you need the certainty that your repayments will stay the same for the next three years or so.

What is a Home Loan?

A home loan is a long-term loan that is usually based over 25 or 30 years, and is sometimes also referred to as a “mortgage”. Crown has access to over 30 different lenders including the major banks and, with over several hundred mortgage products, there isn’t a product that we cannot source! Best of all, you don’t even have to leave your place of residence as we will send a home loan coach out to see you in the comfort of your own home at a time that suits you.

How does a Home Loan work?

A basic aussie home loan is made up of Principal & Interest (P&I) repayments. Principal is the amount that you borrow and Interest is the amount of bank profit in the deal. At the start of your home loan, the bulk of your repayments will go in interest (bank profit) and not much will come off the principal. As you reduce the principal, your interest charges fall until the loan is eventually paid off. Your home loan will no doubt be the biggest debt you will ever have and it is structured to be paid off over an extended period of time. The bank will usually use your home as security for the loan.

Example of a standard Home Loan?

If you were to borrow $100,000 with an interest rate of 7% over a term of 25 years, you’ll end up paying back to the bank $212,100; $112,100 is interest and $100,000 is principal.

A  Home payday loans coach will be able to show you the newest and best home loans on the market, which have the lowest amount of interest (bank profit) in them. This means you will be out of debt sooner and you will be paying less per month.