As the general cost of living increases above the rate of inflation, many people are struggling to make ends meet. It is sad to come across people who borrow money at the highest cost possible e.g. using microloans, personal loans and credit cards. I have seen people with personal loans who are paying a rate of interest that is above 30% as an example.
Below I want to share with you one of the ways of borrowing money at a more affordable rate of interest. These loans are only available to those who have home loans. Interest rate on a home loan is around 10 to 12% so this is a more cost effective way of borrowing money.
These loans are what are referred to as;
Re-advance loans – this is borrowing back the amount of money that you have already paid on your home loan. It is generally quicker to get
Further bond or further loan – this is applying for a higher loan on your existing home loan. This usually takes over a month as your bank must register the higher bond amount with the Deeds office. It is also a bit more costly because it includes bond registration fees, evaluation fees and initiation fees
Refinance loan is a loan against your home that is paid up i.e. you do not owe anyone any money on your home and you have the title deed for it
For the re-advance loans and further bond, you must speak to your bank that has loaned you money for your home and inform them that you want to apply for this type of loan.
If you have a title deed for your home and you want to loan money using your home i.e. you want to apply for a refinance loan you can approach any bank for a re-advance loan and we at ThuthukaSA can also help to link you up with a mortgage originator who can help you to get a home loan against your home.
If you decide to use any of these types of loans, you must make sure that you use the funds for NEEDs only e.g. paying school fees, doing important renovations in your home that could improve the value of your home, building back rooms in your home that will give you additional monthly income, etc… Do NOT use these loans for buying nice-to-have stuff as you do NOT want to end up losing your home, if you fail to pay for the higher home loan amount. If you are under serious financial pressure and you need money to clear your debts, you can also use these loans to settle your debt but you must commit that you will never get back into debt again. Also be aware that there are fraudsters out there who will promise to borrow you money against your home. GO to your bank to avoid being defrauded.
For more information on these loan, read pages 135 to 175 of my book From Debt to Riches. You can get a copy from CNA, Excluives and other bookshops or order the book online through Takealot if you do not have a copy.
Read chapters 10 and 11 of the book From Debt to Riches to understand more about how to use your home to consolidate debt, start your own business, etc…
Note that due to a high volume of enquiries we receive, we will not be able to respond to every email received, especially from those people who have NOT read the book because the book gives you more information and details on the above