Debt Consolidation Guarantee Loan

A debt consolidation guarantee allows borrowers to merge multiple debts—like credit cards and personal loans—into one manageable mortgage.

The guarantor secures the loan with their property, reducing the lender’s risk and potentially enabling you to borrow up to 100% of the property value. This arrangement often results in lower interest rates, making it a cost-effective way to manage and pay off debt.

"Curious about how much you can borrow with a guarantor?

With a guarantor, you may be able to borrow up to 107% of the property's purchase price.

However, your existing debts should be less than 5% of the property's value. This can help you enter the property market sooner without waiting to pay off other debts. The loan is typically enough to cover the property price as well as additional costs like legal fees and stamp duty.

"Looking to apply for a debt consolidation guarantee loan’?

Keep in mind, that lenders see this as higher risk, so they have stricter policies. Generally, you’ll need to have a solid repayment history for the past 3-6 months. Each application is assessed individually, so make sure your finances are in order.

"Buying a Home & Managing Debt: How Debt Consolidation Can Help

Many first-time homebuyers have existing debts, such as credit card balances or personal loans, when they decide to buy a home.

Managing a home loan while juggling multiple financial commitments can be challenging. Instead, consolidating all your debts into one loan can help simplify your finances and reduce stress, meaning they may need to borrow 100% of the property's value.

While most banks are cautious about lending to borrowers with debt, borrowing the full purchase price might not be feasible. That said, some lenders may be open to this option if you have a suitable guarantor who can provide additional security

"Consolidate Your Debts and Refinance with a Guarantor: A Smarter Financial Move

Many lenders will reject your request to consolidate debts into your existing loan if you don’t have enough equity in your property.

However, with the help of a guarantor, you can refinance your debts into a single payment and potentially avoid paying the Lender's Mortgage Insurance (LMI).

Keep in mind, that only a select few lenders offer this option.