Should You Roll All of Your Loans Into One New Deal?
Finance Funding Australia
Loans, Investment Loans, Car Finance
When you’re discussing the potential purchase of a new car with your finance broker in Melbourne, it’s difficult to know when it is a good time to complete the application. If you’re going onto a standard variable interest rate, then the amount you pay can vary over the course of the loan, but if you’re going to fix the monthly repayment, you will want to complete the deal when interest rates are at their lowest possible level.
*Rolling All of Your Loans in Together-
Where you also have credit card loans, any other short-term debts and perhaps a mortgage on your property, it might be a good time for your finance broker to pool together all of your loans at the lowest possible interest rate so that you have just one monthly payment to consider regularly.
While this gives you the advantage of a lower monthly overall payment to worry about, it does mean that your shorter term debts like those for car loans will be repaid over the next 20 or more years, and you may have bought and sold another five or six cars before you’ve repaid the largest of your debts.
***The Facility to Overpay-
Where you have the opportunity to repay more than is required by your new loan company, you will be clearing the debt much faster. If you can repay all of your current debts within your budget at their current levels, you could continue to pay these amounts if all the loans were rolled in together and you be paying everything at a much lower interest rate.
It’s difficult to predict where interest rates will go in the future, but you do have to wonder if they can fall any further even though the banks are achieving a much bigger margin on their loans than they were 10 years ago. Nevertheless, if you have a number of credit card debts where you’re paying annual rates of around 20% or more, you’ll have to carefully weigh up the advantages and disadvantages of rolling all of your loans into one deal, but paying over the longer term.
This may give you the opportunity to purchase a new car now, which may have a warranty that lasts for at least five years, which means you might keep the vehicle for seven or eight years before changing it again.
A number of smaller and short-term debts are often unsecured against any property, even for a vehicle. Where debts are secured against your property, this means that your home can be repossessed by the bank if you cannot meet your debt repayments regularly. If you roll all of your loans into one monthly debt, you run the risk of losing your home, which may not be the case if you fail to pay unsecured loans because the loan company may not choose to foreclose on your home, to receive their repayment.
There are many difficult choices for you to compare, but only after talking with your finance broker in Melbourne will you be able to appreciate which deals on are offer and which is the best for you.
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