Generally, your home provides the best opportunity to secure the most cost effective debt available in any given market. As your home is used as security against the loan, it provides the lender with additional confidence to lend money to you and at a lower interest rate than a credit card or personal loan. 
Credit cards, store loans and personal loans are generally provided without security and therefore lenders charge much higher rates of interest. The reason for this is, in the event of your defaulting on a payment, they are unable to immediately gain access to your assets to seek repayment of their loan.
Usually, you will be financially better off utilising your home given the potential interest savings.
It is important to remember that rather than continually spending borrowed money:
– Good budgeting
– Spending within your means, and
– Controlling your discretionary spending
Are key to getting ahead financially.
A good savings and investment plan combined with a planned debt reduction strategy are important tools in securing your finance independence. That’s a key component of our service offering to you.
Our goal for you…
Is to ensure you are minimising the interest payable in all debt, not just your home loan, and to ensure you have a planned approach to be able to pay off your debt.
Debt consolidation – How it works
As part of your debt reduction strategy, together we may consider consolidating all your debt (personal loans, car loans, credit card balances..) into one loan. This involves taking multiple debts and consolidating them into one loan with a much lower average interest rate. Your home loan usually has the lowest interest rate.
By consolidating debt, you can reduce your total monthly repayments and reduce the total interest paid across all debt if paid off at the same rate.
Sometimes when you refinance it gives you a false sense of security with the additional cash flow available to spend each month.
Don’t be fooled and just start spending your savings s you may end up in the same financial place you’ve just come from without any new options to help next time.
Please don’t hesitate to contact us us for an obligation free discussion on how we can assist you and your financial needs.