If you have lots of different debts in different places and you’re struggling to keep up with the repayments, you can merge all of these debts together into one loan which should lower your monthly payments, therefore making it more affordable. The idea is you borrow enough money to pay off all your current debts and owe money to just one lender and not multiple lenders.
There are two types of debt consolidation loan:
Unsecured - This is where the lender has no claim on your other financial assets if you miss repayments. These are more difficult to obtain.
Secured - This is where the amount you borrow is secured against an asset, usually your home (these are sometimes referred to as "homeowner loans"). If you miss repayments, you could ultimately lose that asset.
Before choosing to go down the road of a debt consolidation loan, think about anything that might happen in the future which could stop you keeping up with repayments. If you cannot stop spending on credit cards, because maybe you are using them to pay household bills, this is a sign of problem debt and you should seek free, independent advice.
Debt consolidation loans that don’t put your home at risk
You can move ALL of your debts to a 0% or low-interest balance transfer card. This is the cheapest way to repay the debt if you repay it within the interest-free or low-interest period. You will need a good credit rating though, to get one of these cards. You can also consolidate all of your debts into an unsecured personal loan but you will need a good credit score to get a low interest rate.
Please call us to discuss your requirements - 01392 678 678.