Debt Consolidation Loans Explained
Debt consolidation loans should always be considered if “overall” there will be substantial savings because much of the debt is incurring high interest rates, typically unsecured loans like credit cards. The next biggest advantage of consolidating one's debt is that there is only one payment to make every month in most instances.
The trick to reducing high interest debt is to use a secured loan to pay off the unsecured debt. The best vehicle for this is often to use one’s equity in one’s property to consolidate. If there is equity, currently standing at an LVR of 80% to 20 % meaning it is relatively easy to increase the lending on a property’s value to the maximum of 80%. This may however require a registered valuation plus added application fees and insurance.