What You Need To Know About Consolidation Loans

Many finance firms and other lending companies make a lot of money by “selling” debt restructuring loans, which is the method of refinancing the loans and other debt. visit

These finance companies will often “sell” their loans to you on the basis of lower weekly repayments, but they will not often warn you that they will extend the loan period, or that you will be paying higher interest rates or extra fees.

People want to consolidate their debts in order to improve their financial status and handle their money more effectively; however, you must ensure that you are not simply expanding the loan period with higher interest rates and fees in order to minimise the weekly repayments.

It’s quick to become burdened by debt, and as mortgage brokers, we see a lot of people who are having trouble making all of their loan payments. Some may argue that you should not have taken on too much short-term debt, but this has happened in many cases, and there’s no point in dwelling on the past anyway. We need to address your current debt and determine if a debt restructuring loan is the best choice.

A mortgage broker can first obtain a statement of status from you so that they can determine exactly what debts you have. They could only then decide which debts should be combined.

The interest rate you pay on each debt, the penalty for early repayment (if any), the remaining period, and the actual repayment amount are all factors to consider when refinancing debt.

While you can refinance IRD debt whenever possible to avoid the high interest and penalties, why would you refinance an interest-free loan?

There are periods when refinancing an interest-free loan is the best option; however, you must carefully consider this as part of your overall debt restructure to ensure that it is the best option – which it usually isn’t.