The pros and cons of cross collateralisation

03 JUL 2023 By Robyn Tongol 8 min read Investor Strategy

Does the ease of simplifying your loans outweigh the potential headache if you want to make changes to your portfolio?

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On this episode, Smart Property Investment’s Phil Tarrant sits down with Eva Loisance from Finni to break down the cross collateralisation of loans, and why it has a number of benefits but can lead to problems in the future.

Eva explains why banks love to cross collateralise loans, and why many investors feel this technique can simplify their lives. But issues arise when one property – be it an investment or your primary home – is no longer needed in your portfolio, yet the future of one is tied up with the future of all. For those who might find themselves in that situation, Eva also shares potential ways out.

The duo discuss the factors you should consider at the outset to decide if it makes sense to lump your loans together or decouple them to give you more options down the road.

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