Do you have credit card or personal loan debts that stubbornly refuse to go away? We may have a solution.
Whilst a minimum monthly credit card repayment of 3% seems quite easy to handle at first glance, a $30,000 debt will require a $900 per month payment. A significant commitment.
Compare this with a current $30,000 home loan and the minimum repayment would be approximately $157 per month (see below).
Given the right set of circumstances, we can sometimes alleviate this type of cash flow burden by consolidating credit cards and personal loans into a residentially secured loan.
However, if this option is not possible or desirable, there is one very effective long term solution.
“Cut it up and pay it off.”
“Cut it up” – This part of the solution is often seen as too difficult because shopping with a credit card is so convenient, however, the credit card organisations such as Visa and MasterCard now offer debit card facilities which give people all of the efficiencies of using a credit card without the temptation of using the credit.
“Pay it off” – This part of the solution can be made easier too. Most credit card providers have a direct debit system that will allow customers to make automatic fixed repayments (similar to a personal loan) on their credit card.
We believe that long term debt should only be used for buying assets that have a reasonable chance of appreciating. Holidays, cars, LCD screens and boats generally head the other way and should only be financed over a shorter term. There is nothing worse than a big debt with nothing to show for it.
This is a sensitive issue to bring up with people but if you know of anyone that would like to talk to me about getting their credit cards or personal loans in order, I would be more than happy to assist with some confidential and useful advice. Call me on 0411 777 876