Debt Consolidation Loan - Example

David was a fully employed office worker in his mid-thirties on a salary package which comfortably supported his day to day expenses and that of his family including his month mortage payments on the family's home, car loans and minimum payments on his credit cards. Unexpectedly he developed a gall bladder problem which caused him to lose control of his bowels. Because of the nature of his condition, he was forced to take six months off work for treatment until he was fully recovered.

During this six month period with no income coming in, the family was forced to pay for their daily living expenses with credit cards. David was not in a position to pay his loans and defaulted on his mortgage and car loans.

His loans looked like the following:-

Mortgage: $202,000 at $1550pcm

Credit Card: $22,000 at $660pcm – Also in default with debt agreement to pay $10,000 to close account.

Car Loan 1: $13,000 at $390pcm (3 months behind)

Car Loan 2: $29,000 at $900pcm (3 months behind) 

The critical things to consider in this situation were:

- Bank was ready to foreclose on his home and both car loans 

- Credit card company was willing to take 10k to close the account.

- Total Loans: $ 254,000 

- Current repayments: $3500

Upon his recovery, David assessed his situation and realised that it was impossible for him to try and pay off all his defaulted loan repayments, credit cards as well as interest and penalities etc associated with each of his loans. After being refused loans from a number of possible lenders and being faced with the possibilty of losing his family home, David was advised by a close friend to approach a debt consolidation specialist.

Having looked at David’s loan particulars and record, the debt consolidation expert worked out the following deal for him:

Refinance all Davids loans into one facility. 

Loan: $254,000

Repayment: $2438

David reduced his outgoings by nearly $1000 per month, but best of all now has all the lenders off his back. He is now able to put the past in the past and move forward.

Debt Consolidation Loans are saving various families like David's from losing everything they have worked hard for. It is hence imerative that if you are in a similar situation to know how a Debt Consolidation Loan could help you. Consult a Debt Consolidation specialist to get expert guidance on consolidating all your debts into one single debt for your future financial well being.

For more information click lnk to article titled: Debt Consolidation Loans - The Facts