Debt Consolidation Loans Compared

Sunday 6 June 2021, 2:41PM
By MoneyHub New Zealand

MoneyHub's re-launched guide to debt consolidation loans helps explain the benefits of combining debts into one loan. For homeowners, the guide explored the option of a revolving mortgage facility which can work out to be significantly cheaper than a new loan.

MoneyHub's Senior Researcher Christopher Walsh said:

“Piling up debts cause massive stress for households of all income levels, and sometimes it can feel near-impossible to get on top of. With household borrowing at record levels, making debt affordable and manageable has never been more urgent”.

“Interest rates are at record lows, and while unsecured debt rates haven’t dropped like mortgage rates, the array of dent consolidation offers around today are enticing for borrowers to re-commit their debts at a much lower rate”.

“Our view is that debt consolidation won’t be for everyone, but for households with multiple debts, there are advantages. However, for a debt consolidation loan to be effective, we believe the debt level must be manageable, credit scores and affordability must be in good shape, and no more debt can be taken on”.

“Our guide outlines everything the New Zealand consumer needs to know about debt consolidations, tips to make it cheaper and most importantly get people debt-free, faster”.

"Our guide encourages those with long-standing consumer debt to explore the options, whether it be a bank loan, credit union deal or secured lender offer. We’ve seen secured borrowing as low as 5.03% p.a. this week, and with some credit cards still charging about 20% p.a., saving money is realistic”.

MoneyHub will update the guide on an ongoing basis as rates change and new lenders enter the market.

See More: Best Debt Consolidation Loans (and helpful alternatives)