Jump to content

Consolidate personal loan with homeloan?


  • Please log in to reply
11 replies to this topic

#1 *JAC*

Posted 05 December 2012 - 09:09 PM

Hi

After some advice.  We have a personal loan - I think there's about $11k left to pay (over 4 years - nearly finished our first year).  We are currently paying $105 per week, paying at this rate means it will be paid off in just over 2 years.  We are struggling to pay this as we seem to have more outgoing than incoming.

I'm wondering if we should consider consolidating into the mortgage.  I know this isn't the ideal situation, as it means we'll end up paying a lot more in interest over the life of the mortgage, but I don't know if we are going to manage - I feel it's the only thing we can do to give us some reprieve.  Saving that $105 per week and putting into paying something else would really help us.

Would love to hear your ideas / advice.

Thanks



#2 niggles

Posted 05 December 2012 - 09:14 PM

We did it in that situation. In our case we're making the minimum repayments until I'm back to my usual work schedule next year and then we'll make extra repayments to pay that amount off in the same period we would have otherwise, but with the lower interest rate of the mortgage.

#3 kpingitquiet

Posted 05 December 2012 - 09:19 PM

I'm no expert, but I personally would consolidate it, for sure, as the interest rate is usually much lower on a home loan. Then I'd start paying maybe $25-50/wk extra on the mortgage to help reduce that added amount. This would free up half the money you're paying out now and pay the rest off the 11k at a lower interest rate.

#4 jayskette

Posted 05 December 2012 - 09:23 PM

Yes that in your case, consolidate. As soon as you are financially better, pay MUCH MORE into the mortgage so that eventually the disadvantages of consolidating will dissipate.

#5 Ally'smum

Posted 11 December 2012 - 02:57 PM

I would definitely consolidate to get a lower interest rate, even if you don't pay $105 could you put something towards it?
It wouldn't actually cost you $105 a week as the interest component would be lower.

#6 qak

Posted 11 December 2012 - 03:13 PM

As long as you realise that if you just add it to the mortgage balance and pay it off over 20+ years (or whatever) the interest cost will be much higher.  What interest rate is the PL compared to the mortgage?

#7 CallMeFeral

Posted 11 December 2012 - 03:27 PM

If you can consolidate with your mortgage (presumably lower rate) AND keep up that level of extra repayment (but now directed at your mortgage instead of your personal loan), then it's a great idea, and would save you money in the long run. That's an 'if'. If you just spend the money that would have gone towards that payment, then it will end up costing you.

#8 MrsLexiK

Posted 11 December 2012 - 03:30 PM

It would depend on the interest rate of your personal loan.  We did it for mine when we got our mortgage but it was a 7 year loan (I think I was 2 years into it) with an interest rate more then 10% more then the homeloan we were also getting the loan which was about 50% of the purchase price so our payments were very low to begin with on the loan. I think the rule of thumb is $10K = $100 a month to your mortgage it might be less now because interest rates are good.  

Do a few calcs and see which option has you paying more out in interest.  If you decrease what you are paying now to the minimum it might be you are not that much more disadvanataged. It might be that you end up saving a bundle on interest by adding it to your mortgage.  IT would depend on the interest rates ofthe PL and the mortgage and the amount of the mortgage.

Also you will have to qualify for the increase amount, when we went through this (we added about $10K within the first year of our loan) we had to actually have a whole new loan contract drawn up and payout the original loan.  But this was probably due to not having equity or whatever in the actual loan.

#9 SeaPrincess

Posted 11 December 2012 - 05:35 PM

From your OP, it sounds as if you're paying over the minimum amount.  What would be the impact on your finances if you dropped the payment amount and let it run for the full 4 years?

#10 kboomba

Posted 11 December 2012 - 05:44 PM

Look at getting a 'top up' loan on your mortgage. It will be at your variable interest rate but is treated separately from your mortgage. You pay it separately so you can control how quickly you pay it off, and it would have a redraw facility which you would not need to use if you don't want to. Speak to your bank and see what options you have, and the costs for each option.

#11 *JAC*

Posted 11 December 2012 - 08:33 PM

Thanks so much for your replies.

I think I have decided to suck it up and keep paying it off. I really don't want to pay out even more than I am now, which is what will happen if I pay it off over the life of my mortgage.  We have a small amount of debt (less than 2k) I would like to pay off first, then I think I will concentrate on this loan and pay it down as fast as I can.

ETA - our tight position at the moment is due to extra expenses and Christmas - and not budgeting appropriately.  I know this is short term, so I will continue to plug away at it!

Edited by *JAC*, 11 December 2012 - 08:34 PM.


#12 MrsLexiK

Posted 11 December 2012 - 09:15 PM

You could see if you could consolidate the other loan in a 0% interest credit card? Or a low interest credit card. You have to be disciplined to pay it off in the time they allocate though otherwise you will end up paying high interest.




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users

 

Decluttering before Christmas: tips for managing the toy influx

Deciding how many toys you want to keep and enforcing a limit can help manage the sheer volume of playthings.

86-year-old taught himself to knit, now makes caps for premature babies

'Anything is possible if you put your mind to it' might just be the motto of 86 year-old retiree, Ed Moseley who despite his age and abilities has been gifting handmade knitted caps to premature babies.

Want healthy kids? Let them play in the mud, feed them allergenic foods - and get a dog

If you read about children's health, you've heard a lot of this before.

Photo captures mum's shock at delivery room surprise

Life can be full of surprises, but for this couple a surprise came in a very unexpected way.

Baby's family in law suit over RAAF base chemicals

A 10-month-old baby has been exposed to significant levels of toxic chemicals around a RAAF base near Newcastle, say his parents.

Childcare worker investigated after threatening toddler's mother

An early childhood teacher has been censured for serious misconduct after she threatened the mother of a young child.

Scottish baby names

Scotland, the wind and water-hewn land of the loch, the kilt and the heather. Bedecked in castles great and small, there are many Australians with Scottish heritage who could look to that fair country for baby name inspiration.

Do we need more parking spaces for parents?

The Give Me Space campaign is collecting stories from mums who have had difficult experiences while trying to find safe parking.

Gender neutral parenting: what it's really like

If you want to take a leaf out of Clare's book in gender neutral parenting, her advice is simple: "Follow the children's lead, and you can't go wrong."

The vital question no parent wants to think about

Since becoming a mother I sometimes wonder what would happen to my babies if their dad and I both died.

6 parents to stop judging right now

It's worth looking a little more closely at some common parenting missteps. Could it be these mums and dads are really just like you and me?

Ryan Reynolds shares delivery room tips for expectant dads

If your partner is heading to the delivery room any time soon, you've got to see Ryan Reynolds' video on dealing with the intricacies of the delivery room.

The trials and tribulations of teenage mums, 10 years later

Having her first baby at 16 was a shock for Simone Miller, but it's not something she regrets.

Grandma falls head over heels for baby - literally

Usually Valerie Sharp's plan to put her granddaughter into her cot works just fine, but when things go wrong it is hilarious.

My toddler wants all my attention all of the time - help!

This is a stage, and you and she will move through it. I can (almost) promise it.

Cotton On KIDS' cute new baby prewalker shoes

Oh watch out folks, Cotton On KIDS' baby range has just become even cuter with the release of its first ever prewalker shoe collection.

Why I love the superhero phase

My twins are heading towards three and have officially entered the superhero phase. It happened almost overnight.

I'm caught in a 'mumpetition' with my friend and I'm losing it

My best friend and I had children within a year of each other. She thinks her child is God's gift to the world.

A year of motherhood: my survival story

Motherhood burns you down, but it rebuilds you too.

Five traps to be aware of when reading IVF clinic websites

Clinics provide IVF success rates in often confusing ways because there is no agreed format on how this information should be presented.

 
Advertisement
 

Top 5 Articles

Advertisement
 
 
 

What's hot on EB

What pregnancy is really like: mums share their honest opinions

We asked real women what surprised them during their pregnancy. They've shared their experiences in the hope of preparing the rest of us better for the ride

The truth about big-headed babies

Research suggests that big headed babies become more intelligent than their smaller peers. One mum shares the positives and negatives of having a big headed baby.

How to encourage your baby's gross motor development skills

There are some everyday things that parents can do to improve gross motor skills and coordination.

'My baby's extra thumb saved her life'

A mum whose daughter was born with an extra thumb says that the extra digit saved her life.

He gave her his liver, she gave him her heart

Heather Krueger and Chris Dempsey's origin story began in a darker place than most: with stage 4 liver cancer.

Toilet training from birth? It is possible

This method, called elimination communication (EC or assisted infant toilet training), is becoming increasingly popular in the West.

Watch hilarious montage of strangest pregnancy questions on Yahoo Answers

Some of the strangest questions about pregnancy - and some of the most bizarre spelling - have made for a hilarious video.

How to reduce your chances of perineal tearing in birth

The use of heat packs, along with other aspects of clinical care, can reduce your risk of tearing in birth.

 

Baby Names

Unusual Celeb Baby Names

Click through the gallery to read the details and see some of the most memorable monikers in show biz families.

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.