Save 10 years and $110,000!!

Debt Consolidation is extremely common nowadays but there is still a lot of doubt surrounding what it involves?

The biggest question I am asked is: “Won’t this mean I pay more over all?

The answer is No.

With Debt Consolidation, you can minimise your overall repayments to the lenders and save yourself thousands of dollars over the life of the loan.

Take the following example:

Travis and Jackie have a few debts which they have considered consolidating. Listed below are their liabilities:

HOME LOAN: 
Balance: $400,000
Rate: 4.5%
Monthly Repayment: $2,026

CAR LOAN:
Balance: $30,000
Monthly Repayment: $600

CREDIT CARDS:
Total Limit: $25,000
Monthly Repayments: $700

TOTAL DEBT: $455,000
TOTAL REPAYMENT PER MONTH: $3,326

Now, I go out and sit with them and explain that with the current market, they can definitely attain a better rate on their home loan as well as consolidate some of this debt to make life that little bit easier to manage.

If we take a NEW home loan amount of $465,000 (which includes an extra $10,000 in an offset facility), we look at the following scenario:

NEW HOME LOAN:
Balance: $465,000
Rate: 3.7%
Monthly Repayment: $2,140

SAVINGS PER MONTH: $1,186

Now, straight away there, we can see that by increasing the home loan to pay out the Car Loan and the Credit Cards, we have a simple one monthly repayment for Travis and Jackie instead of 3 and saved them a whopping $1,186 per month.

However, let’s say we get them putting some of those supreme savings back onto their loan? What this will do is actually allow Travis and Jackie to pay off their loan a lot sooner.

To be conservative, let’s place half of the monthly savings back onto the loan as an extra repayment. This still leaves them with some extra cash in the hand for date night! 😉

Half of Monthly Savings / Extra Monthly Repayment: $593

This would save Travis and Jackie almost 10 years off the life of their 30 year loan as well as saving them $110,000.

I think Travis and Jackie did rather well, don’t you?

debt-consolidation

If you would like to learn more about how debt consolidation could save you money, contact Red Tick Home Loans using the link above.

One thought on “Save 10 years and $110,000!!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s