Debt Consolidation is a relatively new term in the Australian finance industry, but

the benefits it offers are second to none! Today Im going to give you an insight

into how one of my clients has benefited from debt consolidation.

When I first sat down with Craig & Tina at the start of 2005 they had your standard

home loan, 2 credit cards as well as a car loan. Their cash-flow was very very tight

and they were in the unfortunate situation of having to live from pay to pay. Their

financial stress was a heavy, unwanted weight on their shoulders and they wanted it

removed.

Tina had just had a baby, which certainly didn\’t help their cash flow situation as

her income had suddenly come to a stop as she took maternity leave.

Their monthly debt repayments when we first sat down were $1,580 per month, which was

well over 50% of their income. They were literally spending $646 per month more than

they were earning. This deficit (shortfall) each month was forcing them to max out

all of their credit cards as the financial pressure continued to build. They knew

they were drowning in debt and something needed to be done about it.

We were able to consolidate all of their debts onto the one loan which gave them the

one, simple low monthly repayment of $880. This resulted in a massive SAVING of $700

each month in cash flow, which was a complete turnaround from spending $646 more than

they earn each month to having over $50 in surplus left over each month.

We were able to achieve this result by changing their financial structure onto a more

efficient and effective way of banking. We went through their budgets and were able

to implement a fool-proof way of managing their money for them. So they know exactly

what they can and what they cant spend each month, and they LOVE the peace of mind it

gives them as they know exactly where they sit each at any one time !

We got their income to work for them, rather than having their income working for the

bank. By having their income working for them, we were able to get them out of debt

in 10 years rather than 28 years ! This meant that they are going to be saving

$83,925 in interest payments because they are debt free 18 years quicker !

P.S. Just for your own information, they started the year with a debt of $198,000

and now only owe $194,000. They have knocked over $4,000 off their principal in the

last 4 months – these results certainly aren\’t achievable when your mortgage is on a

standard 25 or 30 year P&I home loan from one of the banks ! They are now looking at

purchasing their first investment property in Burswood (off the plan).