- January 4, 2018
- Posted by: Streamline Finance Services
- Category: Finance
These are some very simple but effective ways to help you pay off your home loan faster.
The average term of a loan is 30years and this will generally be offered when taking out a new loan with most lenders but below are a few ways to help you reduce this term.
Get a Lower Rate
There are hundreds of loans out there in the market which offer fixed or variable rate’s and it’s important to know if you are paying too much. Every lender has a set type of criteria which would allow you to get a better rate and these are things like LVR, repayment history, credit score, total loan amount. Speaking to a broker from Streamline Finance Services can help you work through these and see if you can get a better rate on your loan. A small change in the rate can have a massive difference Example: on a $400,00 loan at 4% repayments would be $1910 per month but if you paid the same amount but at a rate of 3.5% you would have the same loan paid off in 27 years + save you $68603 in interest over the life of the loan.
Consolidate other high interest loans
Consolidating other loans like personal loan and credit cards are a great way to reduce your interest costs per month. Many personal loans have very high interest rates and can vary between 7% -21%, so even a small loan can be costing you a lot more then needed. Same with Credit Cards these rate’s are normally even higher with an average rate of over 20% and even higher if you cash advance from the card. Now if you roll these into your Home Loan it will effectively move the rate charged on the debit to the low home loan rate but the main aim is to continue to make the same repayments. Example: if you continue to make the same repayments on a Personal loan of $20,000 (5year term) with a rate of 10% but the rate was 3.5% ( home loan rate ) you would reduce the term by approx. 1year and saving over $4,000 in interest. With this types of consolidating its very important you speak to a broker at Streamline Finance Services as they can assess your ability to have this done.
Any questions on these ways to pay off your Home Loan faster please call Shannon 0417131057