How to enquire about debt consolidation

Your financial institution and debt consolidation

The Australian economy appears to be the least affected by the global financial crisis when compared to other developed countries. Although a few economists and analysts have indicated that the worst is over, many Australian families find day to day living financially challenging.

Debt consolidation enquiries have been steadily growing over the last two years and no slowdown is in sight. It is expected that the current trend may last for another 12 months, if not longer. Initial financial measures, across the world, to bring the economy and financial systems under control have produced some results, however, not to a guaranteed safe level. Several European countries have begun to reorganise their banking systems. Financial institutions in Australia, being less affected, are not making any drastic changes, with the exception that banks are now less liberal with lending. Overall, lending has decreased as loan applicants are required to hold perfect credit ratings to obtain a loan. Because of this, companies specialising in debt consolidation are swamped with new applications. People with several loans and credit cards realise that by consolidating their loans they will save money. Anyone with more than $30,000 of debt will achieve significant savings by merging all their different loans and credit cards into one single loan.

A large percentage of borrowers have the majority of their debts with the same financial institution. Trying to consolidate these loans with the same company will almost certainly result in a declined application. The reason for this is simple... the financial institution makes more money from the client who has various loans, each with different interest rates, such as credit cards, personal loans and possibly a mortgage. A single loan with a low interest rate would benefit the consumer only and not the banks. In this situation the banks would usually find an excuse to refuse the loan application. The obvious solution is to consolidate your loans with a competing financial institution as they would be eager to acquire new business. Before applying for a loan, the consumer should talk to a broker and discuss all options available to them. By going directly to the bank, the consumer is usually presented only with one option, the one which suits the bank.

Enquire about debt consolidation

Debt Consolidation |Debt Consolidation Info | 5