A freind of mine, Andrew has got himself into a bit of a truoble..
He currently has approx $50,000 dept between 6 creadit cards at a avarge of 15%pa. He Currently rents and has no real assets apart from his steady salary of approx $70,000. He is single, lives alone and has no other major liabilites apart from this dept and 300pw rent.He has a perfect creadit rating and has never missed a beat with his reypayments although “apparently” the banks wot lend him anything.
He wants to find a way to reconsiladate his loans and hence save some money in payments.
Any suggestions?
Cheers
StevieConsolidating is a tool – not a solution.
He should close the accounts and try for a personal loan at around 60% of what he is paying now.
But if his behaviour doesn’t change it can be a disaster.
I have seen people do this and 12 months later be in a worse position with maxed out cards and a huge personal loan.
He needs a financial goal and a plan. Paying off the debt is not enough.
Buying a property is a better goal. Paying off his debts will happen as part of it. Building a share portfolio or starting a business are other examples.
But aiming to tread water is no goal in my eyes.
I suggest he find a financial planner who can turn his situation around.
He needs to face up to his situation and make changes. If he doesn’t change first then nothing else will.
IF YOU WANT ANYTHING TO CHANGE THEN FIRST YOU MUST CHANGE.
Pin that to his shaving mirror [blush2]
Simon Macks
Residential and Commercial Finance Broker
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0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
It will be hard to consolodate those loans with an unsecured personal loan, but I reckon thats what needs to be done.
Buying property is a great goal, but as you say, you need to change your ways.
Something less expensive than property initially might be a good start, such as a managed fund or an investment that is a little less full on than property. Just as a stepping stone if you know what I mean?
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Do not spend money you do not have.
Buy steves latest book it has a chapter on this sort of problem and the type of repayment plan you need to take to pay down this debt.
Borrow money only for stuff that goes up in value over time
This is called good debt
Do not borrow money for stuff that goes down in value over time
When you pay off first credit card cut the card up and close accountComments are of a general nature and may not be relevant to your individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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