Debt Consolidation & Bad Credit Home Loans

One of the disadvantages of a debt consolidation loan can be that the loan term is extended further. Hence you pay more interest. Also, especially considering car loans being consolidated into a home loan you could be paying the car loan even after selling the vehicle. However, each case needs to be assessed on their merits. As if you are unable to meet your loan payments you may require a repayment reduction to manage your budget. As a result, in this case a debt consolidation may be a suitable option. However, all the pros and cons needs to be considered.

Yes, however if a business second mortgage the debts to be paid must be >50% business debts. Although, there are consumer second mortgages and caveat loans available with the exit strategy being a property sale.

As mentioned above, the term debt consolidation has been used and misused as a sales process by unscrupulous bankruptcy operators. There are many other misconceptions related to debt consolidation to, such as the below.

Common Debt Consolidation Misconceptions

1. Misconception 1 is where a Debt Consolidation Loan is a Part 9 Debt Agreement; or a different form of bankruptcy. However, debt consolidation is not a part 9 debt agreement.
2. Misconception 2 is that Debt Consolidation always lowers your repayments. Even though this is the goal, not all debt consolidation will reduce your monthly repayments. As such, your assessment will advise your expected payments.
3. Misconception 3 is that Mortgage Debt Consolidation always lowers your interest payable which is not correct. For example, refinancing a 5-year personal loan to a 30-year home loan term may reduce your monthly payments. Consequently, the interest paid over the 30-year term may end up being higher.

Yes, there are various bad credit debt consolidation loans that allow credit defaults. As such, you can refinance home loans, personal loans and debts in various states of arrears and default.  Therefore, debt consolidation home loans can be obtained to refinance:

• Certainly, credit defaults
• Secondly, court judgements
• Thirdly, Poor Credit Score through too many loan enquiries, or payday loan applications.
• Also, Home Loan Arrears.
• Discharged bankruptcy
• Undischarged bankruptcy (in some circumstances)
• Also, company liquidation
• Finally, business wind up proceedings caused by tax debt.

If you can see any of the above conditions occurring, taking action earlier could assist in preventing further credit defaults. Given these points, contact us for professional debt advice today on 1300 796 850.

Bad credit and debt can be caused by several reasons. Consequently, there are many solutions for bad debt including debt consolidation. Consequently, an assessment of your circumstances needs to be conducted to identify the cause and solutions available.

The major issue causing bad credit

• Firstly, the loss of income results in a reduced capacity to make payments to debts. Therefore, there would several objectives to achieve an effective solution:

1. Firstly, a reduction in the overall payments may fix the problem. As a result by seeking a competitive low-interest rate bad credit home loan.
2. However, lenders serviceability will need to be confirmed to ensure you would meet their income requirements.
3. Certainly, debt consolidation may protect your credit file and avoid escalation to bad credit.

Other issues causing bad credit

• Secondly, personal or family sickness is a complicated issue where you may be more suited to applying for hardship. However, if the issues are in the past and you are left with the debt you may qualify for debt consolidation to clear the debt.
• Expenditure – expenditure and spending were reviewed in the royal commission into the banking industry. As a result, all consumer loans are assessed for expenditure. therefore, a high expenditure would not eliminate you from obtaining finance. However, your monthly spend would be included in your borrowing capacity assessment.
• Gambling and mental illness can cause debt problems. Consequently, the only way to obtain finance to consolidate gambling debt is to show no gambling for a minimum of 3 months. therefore, without time to show no gambling, there is no ability to obtain finance. However, gambling is viewed as entertainment. Therefore, if your expenditure is within your income limits then you may still obtain finance.
• Divorce or family issues; Divorce is one of the most traumatic events a family can experience. Consequently, the effects can be financially devastating for all parties.Divorce considerations:
  • Firstly, divorce is very expensive. For the same reason, legal fees can amount to tens of thousands of dollars. As a result, debt consolidation can be used to finalise legal bills.
  • Secondly, divorce can take a long time to negotiate with an ex-partner. Consequently, a divorce settlement may mean debt consolidation is not the immediate solution. However, we are happy to discuss your situation as we have assisted many couples through their change in marital status.
  • There is a range of bad credit solutions for each issue. Not all bad credit debt issues require a debt consolidation home loan solution.

Debt Consolidation must meet government and lender guidelines for responsible lending. Therefore, when applying for a home loan with bad credit your requirements must meet government and lender compliance.

The intention of debt consolidation is usually to reduce payments and resolve debt problems. Consequently, below is a list of information to consider when applying for bad credit home loans.

What to think about with bad credit home loans refinance?

1. Firstly, are any of your debts in arrears or default? Consequently, we find bad debt can escalate quickly past the arrears or credit default. Consequently, arrears and defaults could easily result in a court judgement and asset seizure.
2. Secondly, have debts been referred to credit reporting agencies?
3. Thirdly, are your debts paid on time and when they are due? For the most part, are the loan and creditor payments late?
4. Also, what is the underlying cause of payment issues?
5. Plus, what debts will be paid and also what debts will remain with continuing payments?
6. Finally, will the problems be resolved by paying out good or bad debts?

Each debt consolidation home loan case is different and requires individual assessment. Hence, Loan Saver Network is a professional mortgage broker working for you. In summary, we can assist to ensure your debt consolidation mortgage meets banking and government compliance?

See debt consolidation article on what to do if you are struggling with debt and seeking a bad credit debt consolidation loan.

Lenders’ risk reduces when property security secures the debt consolidation loan. Given that, along with a reduction in risk the loan interest rate and fees can also reduce. Consequently, lowering a loan repayment can be achieved by:

1. Initially, reduction in overall interest rate. As such, existing debts such as credit cards, unsecured personal loans and some car loans can have high-interest rates.
2. Similarly, extend the loan term of the debts. For example, you are refinancing a 5-year personal loan into a 30-year bad credit home loan term. In this situation, extending the personal loan term from 5 to 30 years.

Reducing the overall interest rate is a great outcome. However, extending the loan term does attract additional interest over the loan term. Therefore, the benefit to you must be greater than the cost. Such as, preventing credit defaults, or a reduction in outgoings allowing a manageable budget surplus.

Benefit in reducing your bad credit risk

Along with potential repayment reductions, there are also other benefits to your financial situation to consider. As such, these benefits are reductions in financial risk to you.

• Firstly, pay off the arrears or defaulted debt can prevent repossession of assets.
• Secondly, reducing the further impact on your credit file.
• Finally, simplify multiple debt repayments and manage your cash flow better. Hence, if you have no monthly surplus, a small mishap such as illness can quickly escalate to default. Consequently, consolidating your debts to reduce payments can assist in reducing this risk.

Contact Loan Saver today for a free bad credit home loans assessment, and start the road to recovery.

The cause of debt problems is not always evident. Consequently, debt consolidation is not always the most suitable debt solution. Having said this, using mortgage security does offer the opportunity for lower overall interest rates and lower repayments. Nevertheless, there are many debt solutions available with each debt solutions effective for an appropriate debt issue.

Various debt solutions to fix debt or bad credit problems

• Firstly, Debt Consolidation can be an effective solution to reduce overall payments.
• Secondly, Debt negotiation is effective to reduce the amount owed on your debt balances.
• Thirdly, informal payment arrangements; where reduced payments are negotiated with creditors.
• Certainly, Part 9 debt agreements can be a form of bad credit that can be consolidated.
• Also, Part 10 Insolvency where you don’t fit the guidelines for a Part 9 debt agreement.
• Certainly, a full bankruptcy to resolve all your debt. However, a full bankruptcy can involve the sale of your assets to pay your creditors.
• Finally, business liquidation or business wind up.

Any of the above debt solutions could be most appropriate for you. However, professional assessment and advice would be advisable as each solution has there own benefits, problems and costs.  In essence, no client has the same story or issue, so all solutions need to be considered. Being that, there is no one size fit all solution where a debt consolidation loan will solve all debt issues.

Debt consolidation is where a loan is established to pay two or more loans or other debts. As such, we mostly consolidate credit cards or personal loans into another form of finance. However, consolidation can include other debts such as court judgements or tax debt.