Not all personal loans are created the same, some are very expensive so while they may give you a “fast approval” they are not the best personal loans for debt consolidation.
Many personal loans are completed online with very little input from a real person and almost never with an adviser that can really take a look and assess the options.
As advisers we do a lot of debt consolidation loans.
If you are planning to consolidate your debts then you would no doubt want to be sure that you are getting the best personal loans for debt consolidation.
Why People Consolidate Debts
Sometimes this is in preparation for buying a first home, but other times it’s just to get on top of expensive debt.
It’s not uncommon for people to end up with five or more debts. Credit cards, store cards and personal loans are so easy to get – or at least the expensive one’s are!
When you are looking at the best personal loans for debt consolidation you need to know what you want to achieve. You want to consider what is really important to you:
- Will your new loan have a lower interest rate than what you are currently paying on your loans?
- Are the repayments lower or suit your current budget better?
- Does the new loan give you the ability to pay the loan off faster? This can save you a lot of money if you can pay the loan off faster, but you only save if you DO increase your repayments.
- Do you have an adviser that you can review your finances with?
- Have you got the free budgeting software to monitor what you are spending, and more importantly to identify areas where you can save money?
It can be really helpful to have a personal loan expert (an adviser) that can help you make the right decisions.
If you want to consolidate some debts then you want to ensure that you are going to end up with the best personal loan that you can get, and that includes lower costs (fees and interest rates) and more flexibility so you can repay the loan at the pace which suits now, but that can also be adjusted to pay the loan off faster.
Some Personal Loans Are VERY Expensive
The interest rates and fees vary a lot and it’s surprising how much some lenders are charging. Some lenders (like the GEM Visa) are charging up to 25.99% for store cards, but people accept these rates (and fees) as the repayments look affordable enough and it was the only option given.
Other lenders advertise a range of rates from ‘say’ 6.99% to 19.99% but in many cases we see the higher rates on peoples loans. They may entice people with the potential low rate, but most people will happily accept a higher rate if the process is easy.
Even the main banks are not cheap with their personal loan offerings with many from 12.90%.
There are a range lenders that do personal loans and at Mortgage Managers we have access to some of the best personal loans for debt consolidation.
Sharing A Story From “Simon”
This is Simon’s (name changed) story of how we were able to help with a debt consolidation loan.
When Simon first contacted us, it was obvious that his level of debt was starting to weigh on his mind. Simon was struggling to see a positive outcome for his financial situation. He had $4,110 owed to various debt facilities (personal loans with Unity and Avanti, a credit card with SBS and store cards with Farmers, Q Card and The Warehouse). Every month just paying for everyday essentials was becoming a challenge as he had these debts to pay.
The initial request to consolidate all Simon’s debts didn’t meet the new lenders current requirements, but our team reworked the application and the final outcome was a loan of $46,000 over 7-years and this meant the monthly repayments reduced from $4,110 to $2,140 and obviously making a significant impact on his money management and outgoings, and giving him greater peace of mind for the future.Story from Simon
Simon knows that if he had applied online or even directly with the lender he probably would have never succeeding in securing a loan that achieved his goals.
In summary, we managed to achieve Simon’s goal to improve his financial position:
- Reduced Payments – the monthly repayments reduced from $4,110 to $2,140
- Structured Payment Schedule – this is now a 7-year loan so he knows where things are at
- One Debt – it’s now nice and tidy with just one debt to think about and one repayment
- Faster Debt Repayment – the ability to pay the loan off faster and save even more
This was the perfect outcome and is what we strive to do.
Every situation will be different; however as financial advisers we work with you to find the best way to consolidate your debts so you can manage things more easily and save money too.
Consolidate Your Debts Today
We know how to get your loan approved.
We know what the best personal loans are for debt consolidation, so if you have a few debts we can help you get things nice and tidy, and at cheaper rates too.
Of course as advisers we know that it’s not always going to be worth consolidating debts, but we will give you an honest opinion on your situation.