The idea of owing money is a scary thought and can give people anxiety when thinking of all the money that needs to be paid out to different agencies. You may have student loans, a mortgage, and car repayments to consider in your monthly budget, making it hard to keep up with who you owe money to and what date it needs to be paid. Many people have started consolidating their debts to make life easier and to ensure they are all paid on time. If you are having difficulty keeping up with the repayments from multiple debts, refinancing and consolidating your loans can save you money. Speaking to your lender can provide an insight into lower rates available and how to go about combining multiple debts into one repayment.
Before signing anything, it is important to consider the costs of refinancing, and calculating whether they are financially viable and complement your lifestyle. Some providers may charge exit fees to transfer an existing loan to a new provider, making it a costly expense. There is also the chance that by consolidating your debts, it could take longer to pay off. However, this can be avoided if you choose to make additional payments on top of the required repayments. Through certain providers, this making additional repayments will lower your interest rates.
So now you know some of the things to consider when refinancing your loans, the question many people are left with is what are some of the best debts to consolidate? Take a look at some of the types of debts that can be consolidated.
Credit Cards
If you have more than one credit card, it could be a good idea to combine the debts into one. Most major banks offer a balance transfer when transferring debts from other providers. By consolidating your credit card debt you will ease your anxiety over the multiple payments that need to be paid, and only need to pay one bill instead.
Student Debts
Student debts are painful and often feel never-ending. If you are looking to change your variable interest rate loan to a fixed-rate loan, lower your monthly payments, or consolidate multiple loans into one easy payment it may be time to think about consolidating your student loan. To understand and calculate the best rate you can use a tool such as a student loan debt consolidation calculator.
Mortgage
Paying the deposit on your new home is an exciting time, and often the interest rate of the mortgage can be overlooked. More often than not, home buyers will loan from the bank without considering their other debts. If you are considering refinancing your mortgage, speaking to a mortgage broker about consolidating your mortgage with other debts can help you find the best rate.
After careful consideration, you may choose to go with a provider you are familiar with or someone that offers better interest rates than you currently have, but consolidating your loans into one is sure to save you time talking to multiple providers and save you money by not paying multiple interest rates.
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