Debt Consolidation is a financial product (usually a personal loan) whereby you roll old debts into a fresh loan, ie you combine many different debts into a single loan.
What are the benefits of a debt consolidation loan?
- Manage the ease of paying one single loan repayment per month
- Secure a lower rate of interest
- Shorten the total repayment period
What debts can be consolidated?
- Credit cards
- Store cards
- Other personal loans
Who offers debt consolidation loans?
Typically debt consolidation loans are offered from major financial institution like the big 4 banks in Australia. We also recommend that you shop around for the lowest interest rate and account keeping fees. Remember to ask about the account keeping fees and the loan establishment fee as these can greatly affect the effective rate of interest. Not all financial institutions will offer a debt consolidation loan on an unsecured bases ( ie without security), so you may be asked to put up an asset as collateral (like a house or a car).
Will I qualify for a debt consolidation loan?
It is unlikely you would qualify for a debt consolidation loan if any of the following factors are present;
- You have a bad credit record; or
- You have been bankrupt in the last 10 years; or
- You are in default with other loan repayments
- You do not have regular employment.
What happens if I have been refused a debt consolidation loan? What are my other options?
If you have been refused a consolidation loan due to a poor credit history or the financial institution does not believe you can service a debt consolidation loan and you cannot meet your financial commitments, you may need to other options which may include:
If you have been refused a debt consolidation loan, you may wish to consider our debt solution services. Remember our advice is free and without obligation, so call us today toll free on 1800 98 10 70, you have nothing to lose!
Debt Solutions
12/04/10