Discover how Debt Consolidation could help resolve your problem debts
What is Debt Consolidation?
Debt consolidation involves transferring debts with higher interest rates into one loan with a lower interest rate.
To make this worthwhile, the interest rate of your consolidation loan should be at a lower rate than your current credit agreements. Thus enabling you to make a saving on monthly repayments. If your credit rating has already been affected then you may find it difficult to obtain further credit and therefore the loan may be difficult to obtain.
Sometimes the monthly repayments on the consolidation loan are lower because you are repaying them over a longer period which could mean that the overall cost of the loan could be quite high.
A debt consolidation loan could be for you if you have a number of debts that you wish to combine into a single loan with the goal of making a saving on your monthly repayments.
Advantages of Debt Consolidation
- If you have a lot of borrowing with high interest rates paying high monthly repayments, this may reduce the monthly payment into one manageable sum
- It could reduce the overall cost of borrowing
- It could lower your monthly repayments
- Instead of several monthly payments to different creditors, it will allow you to make one monthly payment
Disadvantages of Debt Consolidation
- If you have a low credit rating, you may find it difficult to obtain new credit at a lower interest rate
- You may have to pay it back over a longer period of time making it more expensive to pay off
- The consolidation loan could carry a higher interest rate
Already had debt consolidation advice?
If you have already sought debt advice and decided that debt consolidation is the most appropriate debt solution for you, please contact an appropriate provider.