Think Money - Wealthy 'n' Wise - May 2015

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their home loan. There is a better way to look at it. If you treat your loan properly, you could work debt reduction to your advantage. Let’s have a look at the following loans:

Home Loan $200K

Principal and interest payment of $1,700pm

Car Loan $20K Repayment

of $533 pm

Credit Card $5K Repayment

of $200 pm

Now… let’s think outside the square. What if you consolidated these debts and had one interest only home loan. If you now treat the loan correctly let’s look at what happens…

You now have a loan of $225k plus let’s say another $5k in bank charges to set it up.

$230k loan – interest only 7% = interest payment of $1,341pm.Now for the clever bit… let’s pay the same amount that you were previously paying on all of thedebts off the loan each month….$1700 + $533 + $200 = $2,433pm.

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