Albert Einstein once said that one of the most powerful forces in the universe is ‘compound interest.’ If the mad-haired scientist was still alive today, he might think the same about ‘debt consolidation’. But what is it?
In easy terms, debt consolidation lets you bundle all your debts into one basket so you can deal with it in one-go. So, instead of having to visit different banks to pay different loans, you’ll be able to settle your monthly repayments with one bank. The ultimate goal is to let you live your life debt-free as fast as possible.
Here is where Citibank comes in.
Citibank Home Loans now allows you to consolidate all your loans into one account. When you do that with Citibank, you’ll also get a single, lower interest rate, a shorter repayment period and a reduced monthly installment amount. Which means, you can wrap your housing, car, credit card and personal loans into one nicely packaged box to deal with.
Plus, Citibank offers you two options to settle your loan. Both options equally save you time and money. Read on to find out how Citibank can help.
| FACILITY | HOME LOAN | CAR LOAN | PERSONAL LOAN | TOTAL |
| Total Payback | 381,835.85 | 121,000.00 | 28,547.92 | 531,383.77 (B) |
| Loan Amount (RM) | 300,000.00 | 100,000.00 | 20,000.00 | 420,000.00 |
| Interest Rate (%) | 5 | 3 | 15 | |
| Loan Repayment (mth) | 120 | 84 | 60 | |
| Loan Installment (RM) | 3,181.97 | 1,440.48 | 475.80 | 5,098.24 (A) |
Let’s say you have a home loan of RM300,000, a car loan of RM100,000 and a personal loan of RM20,000, which puts your total loan amount to RM420,000. As you can see from the table above, each of your loans have its own interest rate, monthly installment and repayment period.
In total, once the interest rate is factored in, your total monthly installment is RM5,098.24 with a total payback of RM531,383.77.
Here is what happens once you consolidate your loans into one basket:
| FACILITY | HOME LOAN |
| Savings (RM) | 9,046.19 (B-D) |
| NEW Loan Amount | 420,000 |
| Interest Rate (%) | 4.5 |
| Loan Repayment (mth) | 120 |
| Loan Installment (RM) | 4,352.81 (C) |
| Total Payback (RM) | 522,337.58 (D) |
Now you have a single interest rate and a single loan repayment period. All you need to pay every month is RM4,352.81 as opposed to RM5,098.24. It also brings your total payback amount from RM531,383.77 to RM522,337.58, saving you RM9,046.19.
However, Citibank also gives you the option to pay your original monthly installment at RM5,098.24 to shorten your loan repayment period. Here’s how:
| FACILITY | HOME LOAN |
| Months Saved (mth) | 21 |
| Loan Installment (RM) | 4,352.81 |
| Extra monthly savings from your Cash Flow Savings (RM) | 745.43 (A-C) |
| NEW Loan Installment Amount | 5,098.24 |
| Original Loan Repayment (mth) | 120 |
| New Loan Repayment (mth) | 99 |
In the end, instead of paying for 120 months, you now only need to service your loan for 99 months. You get to live out of debt 21 months earlier, and we know that is always better to live debt free.
If you decide to consolidate your debt with Citibank Home Loans between now and June 30, 2012, you’ll also get to enjoy a quick getaway at Westin Langkawi Resort & Spa. Terms and conditions apply.
Don’t wait to get started. For more information, get in touch with a Citibank Home Loan Specialist by clicking here.
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