fact sheet Renancing or debt consolidation Overview RPHQDQFLDOLQVWLWXW - PDF document

1 DEBT SELF HELP | REFINANCING OR DEBT CONSOLIDATION | AUGUST 2013 Renancing or debt consolidation Overview read■the■�■e■pri■t■if■you■are■co■sideri■g■these■optio■s.■You■may,■i■■fact,■ le■der.■Debt■co■solidatio■■usually■mea■s■getti■g■a■■ew■loa■■or■varyi■g■ a■■existi■g■loa■■to■pay■out■a■■umber■of■other■loa■s.■■You■should■talk■to■ The eects of renancing or consolidating debts loa■■repayme■ts■more■affordable■i■■the■short-term.■However,■the■cost■ effective■debt■ma■ageme■t■strategy. Advantages and disadvantages Ma■age■a■si■gle■debt■i■stead■of■several■debts,■all■with■differe■t■ short-term.■However,■they■may■have■disadva■tages■whe■■viewed■over■ Published 2013. This document is for general information and is not legal advice. fact sheet phone: 1800 007 007 www.debtselfhelp.org.au You■may■have■to■pay■exit■fees■to■get■out■of■existi■g■loa■s■early. 2 DEBT SELF HELP | REFINANCING OR DEBT CONSOLIDATION | AUGUST 2013 off■the■debt■for■a■lo■ger■time,■maki■g■it■more■expe■sive. How to compare loans You■■eed■to■check■the■costs■of■your■curre■t■loa■■agai■st■its■ca■cellatio■■ You■should■co■sider: Using your mortgage to renance or consolidate debts off■the■extra■debt■whe■■you■get■your■�■a■ces■u■der■greater■co■trol.■ This■way■you■ca■■reduce■the■overall■costs■of■the■loa■.■You■might■also■ i■crease■your■loa■■repayme■ts■by■as■much■as■you■ca■■afford,■or■if■you■ �■d■yourself■with■extra■mo■ey,■make■a■special■loa■■repayme■t. debts■would■■eed■to■be■thought■through■carefully■(see■Traps■of■ Re�■a■ci■g■below).■You■may■have■other■optio■s.■Talk■to■a■�■a■cial■ cou■sellor. Traps of renancing (and watch out for dodgy lenders and brokers) Getting deeper into debt more■mo■ey.■For■example,■if■you■tra■sfer■your■credit■card■bala■ces■o■to■ Losing your assets and your family and friends 3 DEBT SELF HELP | REFINANCING OR DEBT CONSOLIDATION | AUGUST 2013 Dodgy lenders and brokers desperate■to■save■their■home.■They■do■this■by: that■the■borrower■will■be■able■to■afford■the■■ew■repayme■ts.■This■is■ called■‘equity■strippi■g’■a■d■has■la■ded■a■lot■of■people■i■■hot■water■ �■a■cially.