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Most of us know that in order to minimise the cost of debt we should be striving to make sure we are paying the lowest amount of interest as possible.

This is particularly true for credit card debts, car loan debts, personal loan debts as well as the home loan……but how many of us actually do something about consolidating these personal debts. Put them against your home loan which has by far the lowest interest rate.

For example let’s say you have the following debts:-

 

Type of DebtAmount of DebtInterest RateMonthly Min Payment
Credit Card$10,00018%$500 per month
Car Loan$20,00011%$430 per month
Personal Loan$15,00011%$320 per month
Home Loan$150,0007.25%$1020 per month
TOTALS$195,000 $2270 per month

Figures used are indicative and only used for illustrative purposes

 

Now lets see what happens if you were to consolidate all the above debts to the loan that has the lowest interest rate…..which is the home loan.

 

Type of DebtAmount of DebtInterest RateMonthly Min Payment
Home Loan$195,0007.25%$1330 per month
TOTALS$195,000 $1330 per month

 

We now have produced a huge saving and put money back in our pocket:-

Before consolidating debts – $2,270 payment per month

After consolidating debts – $ 1,330 payment per month

Savings = $940 per month (that’s $220 per week or $11,280 per year)

What could you do with this extra money?  Lots of things I guess………….

You could use it to make extra weekly payments on your home loan to dramatically reduce the term of your loan.

OR (hey, we are a bit biased…..)

You could use it to easily subsidies two new investment properties. WOW!!!!

Out of thin air we have created the cash flow to support two new investment properties.

*** Can You See The Magic and The Power In This Strategy? ***

 

Please contact us if you would like more information on how to arrange the consolidation of your personal debts.

Property Friends is a specialist Property Investment Advocacy that has been operating for the last 13 years on the basis of 3 principles: Trust, Community & Progress. www.propertyfriends.com.au (03) 9758 5331

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Uwe Jacobs Property Strategist

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