Debt Consolidation Misunderstanding

How many of you have seen advertising promising to help you eliminate your debts – consolidate all debts into a single loan and save! Is that really what happens? In reality you certainly can try to consolidate your debts into a single loan, however some borrowers especially those with bad credit and no security will probably find that their loan application would be declined.

Debt Consolidation Misunderstanding

Unsecured High Interest Loans

If you are holding many unsecured high interest loans and credit cards, consolidation will only help if you are either negotiating down your debts – eg. a Debt Agreement or refinancing into a secured loan such as a home loan or a car loan. That is because putting several personal loans into a single personal loan by itself will not give you lower loan repayments…you need to do some research and some homework to make the right choices for you.

Borrowers with 30,000 in credit card debts may be better off to roll this amount into a low interest credit card – eg. 2.5% for 9 months and not use the new card for any purchases at all , only in order to repay debt faster.

Then at the completion of the low interest period you could try and roll the debt over again into another card with low interest and do so for a few years until debts are fully paid out.Before agreeing to a debt consolidation loan you must make sure that the deal you are accepting will reduce your repayment obligation and help you eliminate debts faster.

Many Aussies will Retire with Debts

“ALMOST one in three of the baby boomer generation with retire with a mortgage debt.Those in their mid 50′s are feeling decidedly nervous about their financial future.”  –  debt assessment team from

Superannuation has not been a hot performer to date and many are beginning to see that their reality will be needing to make mortgage repayments well into  their 60′s.

Baby boomers are pessimistic about the Australian economy, more so than other age group.About 62 per cent of this generation expected the economy to worsen during the next year, while almost 50% are saying that they have less money to live on than they did in the past.

RaboDirect Survey

RaboDirect conducted a survey identifying that the average baby boomer had about $200,000 in their superannuation fund but that they expected to retire with $400,000.Unfortunately most surveyed believed that double that amount would be needed to have a comfortable retirement.Many are considering using their super lump sum to full repay their mortgage.

Close to 40 per cent of those who are facing the prospect of retirement with a mortgage, said that when they retired said they planned to sell their property, pay off the mortgage and hopefully buy a cheaper home.Another 30 per cent said they expected to use a superannuation lump sum to pay down their home loan.

GFC has had a dramatic impact on the retirement plans of baby boomers.They’ve been the lucky generation up until now. They have mostly always had jobs, free schools and university