Debt Expert - Ian Wason

question

Posted by: Paul Mas | 2013/06/18 09:56

I want to consolidate my debt using the second bond option.

I want to find out if it is advisable to take a second bond and then use it to pay off my debts.

expert answer

Posted by: Ian Wason | 2013/06/20 13:43

If you qualify for an extra bond, and feel you can afford it, it could be a good option.

The interest rates will definitely be lower than that of your other, short-term debt.

The monthly instalment is also likely to be lower.

Just keep in mind that the bond repayment period is much longer (15-30 years) than for short-term debt (0-5 years) and you therefore will be paying back a lower amount over a longer period of time.

 

If you do go this route, make sure that you do use the money to close off those debts and not for anything other than that or else you will find yourself in a worse off position with the new long-term debt and the short-term debt outstanding as well.

If you have the affordability, you can always try to get a consolidation loan from one of the banks.

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