4 Things to Consider Before Consolidating Your Debt

Consolidating debts into a single loan can simplify your financial obligations. This is when you streamline all your debts into one loan, with one repayment, interest rate and term. This approach can help alleviate the complexity of managing various repayment schedules and accounts, whilst removing the need of having multiple annual fees. While there are several benefits to consolidating your debt, here are four things to consider:

Long term financial implications

Opting for a loan with a longer term may offer a lower interest rate, but it's important to consider the aggregated interest and fees, as they may accumulate to a higher total cost in the long run compared to your current debt.

Budget considerations

Effective debt management is facilitated by a feasible and adherable budget. Consider aligning your debt repayments with your income schedule, such as arranging repayments shortly after receiving your pay check, can help you develop a better financial habits.

Potential impact on your flexibility

If you’re adding various debts into your home loan, this may restrict your options in how you manage and settle these debts.

You may to need to contact multiple lenders

You may need to contact each lender separately to make sure you close your other accounts. This is important to prevent ongoing charges.

Learn more about debt consolidation, how it works and its benefits.

‍

This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍