There are many instances where individuals or corporations borrow money from various sources for some reason or the other. This sum of money that is borrowed, is known as debt as is due back to the lender at the end of a decided period of time. During this time, the borrower makes systematic periodic payments to the lender, which consists of part of the total borrowed sum and a percentage of interest charged. The lender is benefited with the interest he charges the borrower on the sum of money lent, at a rate which is decided based on factors such as tenure of the loan, sum of money borrowed and the fixed periodic repayments agreed to by the borrower.

What is a debt?

When people desire things they cannot afford, they use borrowed funds to get them. These borrowed funds are due back to the lenders after the decided period of time for which the loan is taken. This is what is known as debt. It is in short, a sum of money that a borrower owes a lender. The lender, for making funds available to the borrower when he needs them and accepting part payments of the amount advanced; charges interest to the borrower at a certain rate throughout the repayment period. When the debt falls due, the borrower is expected to repay the money to the lender. However, when there are chances that the borrower may default on the payment, in Australia, the lender usually takes help of professional financial services firms who assist them in Australian debt recovery.

What is debt consolidation?

Most times, a debt is relied upon to obtain things that could not be otherwise obtainable to you if you choose to merely rely on your own finances. However, if this becomes a habit, then you run the risk of finding yourself in large debt and owing really big amounts of money. This could also be the time when the lenders may bring in the artillery by seeking the help of professionals who specialise in Australian debt recovery. In such situations, it makes sense to take the help of professional financial advisors who can help in obtaining debt relief for you as a borrower. These professionals help by advising on and providing options for paying off the debt. One such advice may be debt consolidation which is, essentially, combining together all the several bills owed, into one single debt. Another could be going for a debt consolidation mortgage.

What is a debt consolidation mortgage?

Debt consolidation with the use of mortgage, or debt consolidation mortgage, is a method of combining all the secured and unsecured debt owed by you, into one single loan which is secured against your home. There are certain benefits of doing this, like getting mortgages for lower interest rates and having the convenience of making one single payment for all your debt taken together. However, it is always advisable to get professional advice by consulting financial counsellors before taking this step so you can make an informed decision.