Many families in Israel find themselves in a financial trap: they have a mortgage, and over the years have added a car loan, renovation loan, overdraft coverage loan, and other credit card obligations. The result is a monthly payment that strangles the family and prevents them from managing normally. The solution of loan consolidation through mortgage (all-purpose loan) is one of the most effective tools for getting out of financial trouble.

How does it work?

The idea is simple: commercial (regular) loans are usually given for short periods of 3-5 years at relatively high interest rates. In contrast, a mortgage can be spread over 20 or 30 years, and the interest rates are (usually) lower because the bank has strong collateral (the property). In the loan consolidation process, we take an addition to the existing mortgage against the property, and use this money to close all the small and expensive loans.

The result: reducing monthly payments

The effect is immediate and dramatic. A family that was paying 4,000 NIS on a mortgage plus another 5,000 NIS on various loans (total 9,000 NIS), can after loan consolidation find themselves with a total monthly payment of only 5,500 NIS. This difference – 3,500 NIS that remains net each month – is the oxygen that allows the family to return to balance and live with dignity.

When is it suitable?

Loan consolidation is suitable for those who own real estate property, and whose current mortgage value is less than 50% of the property value (usually it's possible to reach up to 50% financing for debt closure, and sometimes even more with non-bank solutions). It's very important to perform this move with professional mortgage consultation, to ensure you don't endanger the property and to build a recovery plan that will prevent you from returning to the same debts in the future.

Caution: it's not magic

It's important to remember that spreading the debt over many years increases the total interest you'll pay at the end of the period. Therefore, loan consolidation is a solution designed to solve a current cash flow problem ('firefighting'). If you can handle the current payments, we won't always recommend this move. But if you're in chronic overdraft and struggling to make ends meet, this is a real lifeline.

Under financial pressure? Don't wait for the bank to start bouncing checks. Contact us today to check feasibility for loan consolidation and starting a new path.