We are a debt solutions provider in England currently helping thousands of people with unaffordable debt.
What is Debt Consolidation?
If you are struggling to repay your existing debts, debt consolidation (or consolidation loans) could be the best option.
This option involves you refinancing your existing loans, or taking out a second loan to pay off your existing. You may have multiple loans, for example from credit cards, overdrafts or personal loans, and are unsure how to manage each one individually. This is especially true as different loan or credit providers will have different repayment terms.
As with any loan, there are pros and cons to this option and it is essential to get professional debt advice before going ahead with a debt consolidation.
What are the benefits of consolidating debt?
One key benefit of consolidating loans is that it can help streamline your finances. As previously mentioned, you may be juggling many different repayment terms. By consolidating your debts you only have to focus on one repayment plan. This also means the chances of missing a repayment is reduced.
A debt consolidation loan may also be incurring lower interest rates too, compared to multiple loans. Some loans may have higher interest rates than others (for example payday loans have much higher interest rates) and by introducing a consolidation loan you can even cut the rates and reduce them.
Finally, consolidating debt could help to improve your credit score. Although taking out another loan can damage your credit score in the short term, paying off outstanding debts and being able to stick to one regular repayment sum a month could help improve your credit score. And of course, if you stick to your new repayment plan, paying off all your debts can boost your score.
So, what are the cons of debt consolidation?
As with any debt solution, consolidating your debts isn’t for everyone and it is important to understand the drawbacks before committing.
Debt consolidation loans are usually much longer term and therefore you will be paying off your debts for a longer period of time, albeit in possibly more manageable instalments. This also means that you are paying the reduced interest over a longer period which could create more added interest amounts than previous loans.
Consolidation loans could also come with added costs, such as balance transfer fees or closing costs. This is why it is important to consult a professional and choose a reputable lender.
If you are struggling to repay your current loans due to mental health, the cost of living crisis or other factors which may not change or are out of your control, then consolidating debts does not reduce the core issue. If you are struggling to meet repayments now, you may also struggle to meet the repayments of your new consolidation loan.
When you should consolidate your loans
As we have mentioned, consolidating debt isn’t for everyone and it is essential to properly weigh up the pros and cons before deciding to move forward with a debt consolidation loan. You could consider consolidating debt when:
- You have a large amount of debt you currently cannot pay off;
- Your income can cover the consolidation loan repayments;
- The consolidation loan you have chosen does not unreasonably extend your repayments or have increased interest rates.
How Can I Consolidate Debt?
The best way to consolidate your debts varies depending on your situation. Our online debt advice tool offers free debt advice, with no-obligation to sign up.
Take time to add your information into our online tool. We will ask for information regarding your current debts, and how much money you receive and spend each month. Using this information, we can suggest the best debt solution to consolidate your debts.
Get started on your debt free journey with us today and access our free debt advice tool here. If you have any further questions about debt consolidation, get in touch. Our team is always on hand to help.
How We Help You
Our promise to you
Millions of UK residents are currently struggling with debt. If you request help from our team, then you will only find compassion, experience, understanding and confidentiality. Helping people with debt is their full-time job. Your wellbeing is at the heart of our service.
We work tirelessly to bring down the cost of the debt solutions we provide. The more we drive down costs – the quicker our clients get debt free.
You don’t need to provide a phone number or an address to get help. You just need to provide your email address and your name, and this is only so you can log back in and work at your own pace.
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