An
Action That Requires Careful Consideration!
One of the
major "Keywords" that attract
people to this website and indeed to this page is the search
term "Debt Consolidation" and
it's various derivatives.
We are regularly
asked to comment on the benefits and pitfalls of, and wether
it's a "Good Idea" or not to
consolidate debt into one, more easily affordable repayment
each month, and our base comment is that it definately has
it's merits if the consolidation is carried out correctly
and with a specific goal in mind.
As an example:
Consolidating
a motor vehicle debt into a home loan may be a desire, simply
to lower the overall repayments to something more reasonable.
but if the Mortgage Structure
is the basic "Principal
and Interest" fare that most Australian
families have, then the car debt becomes a 30 year
car debt.
This is an
example of a very poor Mortgage
Structure financing too much debt and for
the wrong reasons.
On the other hand, a credit card debt of say $3,000
can take anywhere up to 30
years to clear if the only repayments made
are the minimum repayments required. |
