Monthly Commitments:     Interest Rate*     Debt Amount     Monthly Repayments

   Credit Card                              19.75%            $10,000                        $260

   Car Loan                                 16.95%            $15,000                        $368

   Personal Loan                          14.25%            $  5,000                        $116

  Total                                                                                                $744

However, if Peter consolidated these debts into one loan over a five year term, Peter’s monthly payment is reduced to $694, which is a saving of $50 per month. If he had enough equity in his home to apply for a home equity loan instead of a personal loan, he can pay even less interest and save $114 per month. This would mean a saving of over $6,800 over the five year term.  If Peter put these savings back to the loan, he would find that he would pay off his debt in a much shorter timeframe, saving him even more in interest repayments.

   Loan Type:      Interest           Debt           Repayments      Savings      Savings

                         Rate*          Amount         $/ month           /month      over 5yrs

  Personal Loan   14.25%       $30,000              $694             $ 50          $3000

  Home Equity       9.80%       $30,000              $630             $114         $6840

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* Interest Rate may vary depending on the actual product

Peter is paying off three different loans over a term of 5 years. In this example the table below shows Peter’s total Monthly repayment of $744.