Background
Our client, a single mother of three young children, had $22,000 in personal loan debt at high interest rates of 29.95% and 47%. She was struggling to keep up with repayment while also needing to borrow an additional $32,000 to repair and renovate her family home.
Challenges
She applied for debt consolidation and a home loan top-up, but was declined by her main bank due to some minor past credit issues and her employment status.
- Previously self-employed, she has just moved into a permanent full-time PAYE role recently .
- She had a few small late utility payments and AP dishonours.
Mitigants
Working closely with her adviser, we thoroughly assessed the client’s financial position and were confident that we could help her out.
- Strong affordability and UMI position
- Past late utility payments and AP dishonours were insignificant and have been fixed.
- Very low LVR at 7% following the refinance and top-up
- No history of mortgage arrears or defaults
- The overall refinance would leave her in a stronger financial position
Solution
After carefully assessing the client’s situation, we were able to say “yes” to her application, providing a 30-year Residential Long-Term Property Loan, refinancing the existing lending at a much lower interest rate and providing the additional funds required for home improvements.
More importantly, by consolidating the high-interest personal loans into a more manageable structure, the lending almost halved the client’s monthly outgoings and helped her move into a more secure financial position.
LOAN AMOUNT
$90,000 (Refinance & Debt Consolidation)
INTEREST RATE
6.85% p.a.
LVR
7%
TERM
30-year Principle & Interest
“Our Residential Long-Term Property Loans can be tailored for a range of clients’ needs, including purchasing a first home, moving to the next home, refinancing and debt consolidation.
We take a practical and responsible approach to credit assessment, looking at the wider picture to understand each client’s circumstances.
Have a client who doesn’t tick all the boxes with the main banks? Talk to your local Avanti Finance BDM to see how we could help.”
Richard Speir
Business Development Manager, Auckland Central & East, Bay of Plenty