Compare different methods of Debt Consolidation
Method of debt consolidation |
Advantages |
Possible downsides |
| Home loan |
- Low interest rates
available
- Potential to make extra repayments
- Redraw
facility if funds needed in an emergency
|
- Longer term could mean that you could pay more in overall interest if you stick with lender’s minimum repayment amount
- Requires sufficient home equity to secure your loan
- State government charges may apply to financing/refinancing process
|
| Personal loan |
- Set repayments are easy to budget for
- Fixed term gives you a clear pay out date
|
- Rate is higher than for a home loan
- Possible upfront and ongoing loan charges
|
| Credit card balance transfer |
- Very low rates for introductory period
- Fixed term gives you a clear pay out date
|
- Revert rate may be high
- Requires discipline to pay off card in introductory period
|
Your Aussie Broker can help you decide which method of debt consolidation would be best suited to your needs.
Continue to Debt Consolidation tips.