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The Complete Guide to Debt Consolidation Home Loans

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Your Finance Adviser
The Complete Guide to Debt Consolidation Home Loans

The number of Australiansuffering from financial debts is continuing to rise in the country. The people deal with a variety of debts that they take from different places in the form of credit card bills, health bills, vehicle loansetc. but their monthly budget is not enough to cover the amount of money they have to pay back. As a result, in due course of time a majority of these people find themselves simply overwhelmed by their mounting debt problems. This even make people suffer from huge amounts of stress and in worse cases, often leads to further unintentional debt. Such situations make it completely necessary to search for all the possible solutions that can help in dealing with the debt problems.  

Debt consolidation Home loans are the perfect solution for dealing with a variety of debt problems. It is a way to bring together all types of existing loans - credit card, student debt, store card, together into one new debt, which helps the person manage his repayments and give a clearer picture of his financial future. The amount that is offered to the person taking debt consolidation loan is based on the equity that's already in their home.  

Under debt consolidation home loan, only one single monthly payment that the borrower has to take care of reduces his debts much faster. Instead of paying at different items of the month on different debts that may have different interest rates, the borrower has to pay the debt at one single interest rate and one single monthly payment. 

Types of debt consolidation loans 

There are two types of debt consolidation loans- secured and unsecured. Although both of these loans aim to combine multiple debts into a single loan, there are still much difference between these two. Let's understand this difference: 

  • Secured debt consolidation loans: In this type, the loan is secured by a specific asset, usually real estate. Having a property to use as security minimises the lender’s risk of losing money should the borrower stop making repayments. The process of taking out a secured debt consolidation loan is often referred to as mortgage refinancing.  
  • Unsecured debt consolidation loans: Under this type of loan, the lender has no right to repossess a specific asset should the borrower stop making their repayments. This is why the interest rate of unsecured debt consolidation loans is usually higher than secured loans. 

Importance of Debt Consolidation Home Loan 

The debt consolidation home loan is important in regards to the several advantages it offers to the customers. These advantages are: 

  • Home Improvements – One of the best ways in which a debt consolidation loan can help is by raising cash for home improvements. 
  • Low-Interest Rate- The debt consolidation home loan comes with a potentially better (lower) rate of interest. These interest rates can be extremely low as the loan is secured against the home.  
  • Pay Off Debt - The most beneficial part of a debt consolidation home loan is the fact that it makes paying and managing the debts easily and quickly.  
  • Credit Rating - A debt consolidation home loan improves the credit rating of the borrower and prevent it from any further damage.  
  • Financial future- The debt consolidation loans serves as a means of providing a clear timeline outlining as to when the borrower will be debt-free.  

Experts Advice on debt consolidation home loans by Your Finance Advisor   

Looking for a first-time buyer mortgage broker in Australia that can assist and guide about the debt consolidation home loans? Your Finance Advisor has a team of the finest and experienced home loan advisors of Australia that can find the perfect home loan solution for you.  

Your Finance Adviser is a reputed finance advising company and Home loan experts of Sydney, Australia. We specialize in providing home loan advice, end-to-end lending, financing and wealth management solutions. Our experts' team of home loan brokers and advisors will guide you thoroughly about eligibility criteria and features of the debt consolidation home loans and help in finding best solution for how to pay off your debt.  

In case of any queries, you can directly call us on 02 8322 6895 now. 

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