A debt consolidation loan can save you money and make your life easier
Struggling to keep track with all your debts? Do you miss payments? What about missed-payment fees? Are you paying too much interest?
A debt consolidation loan could help!
What is a debt consolidation loan?
A debt consolidation loan is a new loan you can use to pay out your many, smaller debts. After which you’re left with one single loan to manage.
A debt consolidation loan can make your debts easier to manage
When you’re juggling many loans, it’s easy to miss repayments.
Maybe your credit provider doesn’t have your latest address, so your statements aren’t turning up.
Whatever the cause, late payments mean late payment fees.
Why not turn all your smaller debts into one single debt? That way you only have one payment to manage each month.
A debt consolidation loan can mean less interest
What interest rate are you paying on your credit card? Your personal loan? What about your store cards (Myer, David Jones, etc.)?
Did you know that some of these interest rates may be greater than 20% p.a.?
Did you take out a credit card with a low introductory rate, and now you’re paying the full rate? How much are you paying now?
With a debt consolidation loan you could refinance your higher interest-rate debts into one, low-interest loan.
How much interest could you be saving each month?
Types of debt consolidation loan
Secured or unsecured
If you have a personal asset like a car or a house to use as security for the loan, you could be paying less interest on your total debt. A secured loan is less risky for the lender. If you default on the loan, they can sell the asset to recover the monies lent to you.
Flexible repayment frequency
Paying off your loan every fortnight rather than every month means you make more repayments in a year. This means you could pay less interest over the life of the loan and pay the loan off sooner. If that’s important to you, make sure you check to ensure this is possible with your debt consolidation loan.
Would you like the loan repayment to come out of your bank account automatically? This can help you avoid missed payment fees. A good strategy can be to have your loan payment come out automatically on the day after you are paid.
When you consolidate your debts, make sure you don’t get into further debt with your old credit cards. Cut them up and stick to repaying your new, low interest debt consolidation loan.
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Here's what a loan might look like
Here's what a small loan might look like...
You're after a loan for $1,000 for medical or dental bills. Your are looking to repay the loan back after 6 months and are happy to make fortnightly payments.
Here's what a medium loan might look like...
You're after a loan for car repairs for $2,500 and are looking to make payments back on a weekly basis over 2 years.
Small Loan Example
- $110.77=Per Fortnight
- $1,440.00Total Payments
Medium Loan Example
- $43.19=Per Week
- $4,490.88Total Payments
In the above example You'll pay:
- Loan Amount Financed:$1,000
- Establishment Fee:$200(set by NCCP at 20% of the loan amount)
- Monthly Permitted Fee:$40per month charged on the anniversary of the loan
- Amount of Credit of the Loan:$1,240
- Total Amount of Interest Payable:NIL
- Direct Debit Fees:$25.74($0.99 per transaction)
- Total amount of repayments:$1,440.00
- Nominal Percentage Rate (Interest) per annum:0% as defined by NCCP
- Comparison Rate: 160.0571% as defined by NCCP
In the above example You'll pay:
- Loan Amount Financed:$2,500
- Establishment fee:$400(Set by NCCP)
- Amount of Credit of the Loan:$2,900
- Total Amount of Interest Payable:1,590.86
- Repayments:103 x $43.19 + $42.31(a final payment)
- Total amount of repayments:$4,490.88
- Nominal Percentage Rate (Interest) per annum:48% as defined by NCCP
- Comparison Rate: 65.5138% as defined by NCCP
WARNING: This comparison rate is accurate and applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.
See our fullFee Statement for fee details.
"These examples are provided for illustrative purposes only. They do not represent an offer from Rate Detective Pty Ltd. A Spotter Loan is subject to the completion of an application, which is subject to responsible lending checks that take your personal needs and financial circumstances into account."
For loans under $2000 the minimum repayment term 90 days, maximum repayment term 12 months.