Debt Consolidation Case Study

You may have heard the term ‘debt consolidation’ before in reference to a strategy that will help you save time and money, but are you curious how it actually works? After helping thousands of Australians consolidate debt over the years, we would like to share our knowledge and experience with you.

Debt Consolidation Example

The best way to show the benefits of a debt consolidation loan in action is to show you an example. So here’s how a debt consolidation loan benefited one of our happy clients, Sophie:

Sophie was a 26 year old office manager when she made an enquiry about debt consolidation with NSW Mortgage Corp. She was struggling to balance her repayments on a home loan, a personal loan and two credit cards that had started to spiral out of control. Each of them required repayment at different times of the month, with different interest rates, fees and charges. When we first spoke to Sophie, she was unaware that a debt consolidation loan could wrap all of these debts into one tidy repayment.

Here’s a snapshot of her finances before the debt consolidation loan:

Type of debt Amount owing before debt consolidation loan Monthly repayments before debt consolidation loan
Home loan $221,000 $1,613.10
Personal loan (14.90% p.a.) $18.500 $439.14
Credit card (19.49% p.a.) $11,650 $291.25
Credit card (13.24% p.a.) $14,330 $358.25
Total repayment due before debt consolidation $265,480 $2,701.74

 

Here’s what Sophie’s finances looked like after the debt consolidation loan:

SOPHIE’S NEW MONTHLY REPAYMENTS

(After debt consolidation)

$1,589.98
Monthly saving after debt consolidation $1,111.76
Yearly savings after debt consolidation $13,341.12

 

In the example above, a debt consolidation loan was an ideal solution for Sophie and it helped her save a tremendous amount of time (by giving her a single repayment using a direct debit arrangement) and money, by consolidating her debts into a low interest debt consolidation loan. As excited as Sophie was to save so much money on her loan repayments each month, she told us she had planned to ‘do the sensible thing’ and continued to pay $2,500 per month towards her debt consolidation loan in order to pay her home off even faster and by doing so, save a lot of money in interest repayments over the years. Even making the additional repayments, Sophie still had over $200 per month in her pocket that she never had before!

If your circumstances are similar to Sophie’s and you feel like your finances are getting on top of you, please don’t hesitate to call one of our debt consolidation loans team at NSW Mortgage Corp as soon as possible – you too may be eligible for a debt consolidation loan that could save you thousands.