Consolidating your debt into your mortgage
For these reasons, taking out a personal loan to consolidate higher interest debt can often be very beneficial.
Debt consolidation is a strategy to roll multiple old debts into a single new one.
This calculator is based on making the minimum repayment amount at a 18% interest rate.
Minimum repayments are calculated as a percentage of the closing balance, typically 2 or 2.5%, or a set dollar amount, usually around , whichever is greater.
Once all of your other accounts are paid in full, there is only one payment to make every month – the one to the new lender.
Since the interest rate on a personal loan is often considerably lower than on a credit card, and the repayment term potentially much longer, the consolidated payment may be much lower, as you indicated.
This type of credit card charges no interest for a promotional period, often 12 to 18 months, and allows you to transfer all your other credit card balances over to it.
You’ll need a good to excellent credit score — above 690 — to qualify for most cards.
On a piece of paper, write down the balance, interest rate and monthly amount due for each of your debts.
Make a budget to pay off your debt by the end of the introductory period, because any remaining balance after that time will be subject to a regular credit card interest rate.
Most issuers charge a balance transfer fee of around 3%, and some also charge an annual fee.
If you are struggling to keep up with your monthly payments, consolidating your debt in this way can certainly help alleviate financial stress.
It can also make it less likely that you will fall behind on your payments and risk harming your credit.