Debt Consolidation Loan
Trouble-free Consolidation Loan?
Are you struggling to organise, control and pay off your debts? Then a Consolidation Loan may be just the thing for you.
We all know how easy it is to lose track of all our debts with credit cards, personal loans, overdrafts and many others. A Consolidation Loan is a way of combining all your debts into one simple, easy-to-manage account.
Our fully trained debt advice team are available 9.00am until 9.00pm 7 days a week on 0800 389 5959. They’ll listen to your debt problems with a sympathetic ear and will be able to give you access to a select number of authorised consolidation loan specialists who operate the same ethical code of conduct as ourselves. With your agreement, we’ll pass your details onto one of these companies who will be able to offer you the professional advice you need.
What is a debt consolidation loan?
Depending on the size of your debt, a debt consolidation loan could be a solution worth thinking about. This type of loan is one that is used to pay off other loans or lines of credit and we have many customers for whom this has proven to be the best solution. If you are considering consolidating your debts, you’ll probably benefit from reading this short article on the advantages and disadvantages of debt consolidation.Advantages of debt consolidation
A Debt Consolidation Loan is a good option if you can afford to make regular payments to your creditors and you want an organised, simple way to pay. It can be the best option if you:1) One payment vs many payments
It has been estimated that the average UK citizen pays 7 different creditors each month. Making one single payment is much easier than trying to decide who should get paid how much and when and makes managing your finances much easier.
2) Reduced interest rates
The most common type of debt consolidation loan is a home equity loan and the interest rates for this type of loan are typically lower than most consumer debt interest rates (including credit cards). The reason for this is simple: the debt consolidation loan is less risky as it is secured against your house so your creditors have something they can take from you if you do not make your payment. Credit cards are unsecured loans. So they have nothing except your word and your history. Since this is more risky, they charge higher interest rates.
3) Lower monthly payments
Since the interest rate on a debt consolidation loan is lower and because you have one payment vs many, the amount you have to pay each month is typically much less.
4) Only one creditor
With a debt consolidation loan you only have one creditor to deal with. So if there are any problems you only have to make one call instead of several. This makes controlling your finances much easier.
Disadvantages of debt consolidation
1) It’s easier to get into further debt
With typically lower monthly payments and more money left over at the end of the month, it might be easy to start using your credit cards again or continuing spending habits that got you into such debt originally.
2) Longer time to pay off the consolidation loan
Most debt consolidation loans are the 10 to 30 years long (just like a mortgage). This means that you will be spending many years getting out of debt.
3) You could spend more over the long haul
Even though the debt consolidation loan interest rate is less, if you take the loan out over a long period (say 10 - 30 years for example), you may end up spending more than you would have if you had kept each individual loan.
4) You can lose everything
If you don’t pay off an unsecured credit card loan, you are likely to get a bad credit rating but your home would still be secure. If you do not pay a secured loan (and debt consolidation loans are typically secured), they will take away whatever secured the loan. In the majority of cases, this is your home.
As you can see, debt consolidation loans are not for everyone. It’s vital that you get professional debt advice before you make any decision. Please call one of our debt advice team now on 0800 38905959. You’ll find that they are knowledgeable and sympathetic to your situation. If they think a debt consolidation loan is the right solution for you, they will put you in touch with one of our select number of authorised consolidation loan specialists who will be able to help.