Debt Consolidation happens when you combine all your smaller loans into one, easy-to-manage loan - leaving you with one monthly payment, rather than several repayments that you need to track and manage.
A great advantage of consolidating debt is the opportunity to lower your overall interest rate and monthly repayments, giving you the ability to pay off your debt faster.
The overall interest rate you’re able to get through depends on which type of personal loan you get, so be sure to have a look at our the difference between secured and unsecured loans.
What are the benefits of debt consolidation?
- With a debt consolidation loan you may be able to get a lower interest rate and a new loan term which means your repayments may be smaller and more affordable.
- One loan to manage instead of a couple can make budgeting, and keeping track of your finances, easier.
What are the risks of debt consolidation?
- There may be extra fees and charges, depending on the loan offers, so be sure to compare the debt consolidation offers with different lenders;
- As people, our willpower sometimes isn’t as strong as we would like it to be - having more money to spend each month can mean you don’t put it towards your debt and instead, spend it on other things.
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Save My Bacon Flex Loan: The Save My Bacon Flex Loan is suitable if you wish to borrow more than $1,000 for a period of 2-12 months (8-52 weeks). You will need to pay an establishment fee and interest. You can choose to make regular repayments weekly, monthly or fortnightly with no early repayment fees.
Lending Crowd Personal Loans: The Lending Crowd offer a comprehensive range of personal loan options if you are looking to borrow an amount between $2,000 and $200,000. They recently expanded their offering to offer both secured and unsecured loans. Interest rates for unsecured loans start at 5.66% p.a., and if borrowers choose to secure their loan with property or a vehicle, they will be rewarded with an even lower interest rate across all risk grades. Secured rates start from 5.03% p.a.
Harmoney personal loan: Harmoney offer loans of $2,000-$70,000 with repayment periods of 3-5 years. All loans are unsecured. They currently offer interest rates between 6.99% p.a. – 24.69% p.a., which are fixed for the life of the loan. You will need to pay an establishment fee and interest on your loan, and there is no early repayment fee. You can make repayments weekly, fortnightly or monthly.