A Guide To Debt Consolidation - How To Consolidate Debt

Debt consolidation allows you to take all your existing debts (loans, credit cards, store cards etc), and combine them all together into one new loan.

So instead of dealing with numerous creditors and monthly payments, all your outgoings are combined into one new monthly loan payment. This new debt consolidation loan can be either secured, unsecured, or take the form of a personal loan or credit card.

Benefits Of Debt Consolidation

There are a lot of benefits for opting for debt consolidation, here’s a rundown of some of the main benefits you’ll receive when consolidating your existing debt.

  • Only one payment per month
  • Monthly payments that you know you can afford
  • Stop ‘juggling’ multiple debts and multiple lenders
  • Write off some of your debt (with certain debt solutions)
  • High interest rates are replaced with a lower fixed rate
  • Stop creditors from pestering you
  • Have a fixed monthly payment plan

Is Debt Consolidation A Good Solution For My Debt Problems?

Whether debt consolidation is a good debt solution or not depends greatly on your current circumstances. But it is definitely worth considering debt consolidation if you’re finding it difficult in keeping up to date with your existing debt repayments.

If you’re currently experiencing difficulty in meeting your dat to day expenses and would like a way to reduce your regular monthly repayments to a lower amount at a lower interest rate then debt consolidation could be the solution you need.

Applying for a debt consolidation loan is simple, and there is no obligation to accept any offer that you are given. A debt consolidation loan is often a good option for individuals who aren’t so deep in debt that they need to consider an IVA or possible bankruptcy.

In most cases, debt consolidation is good choice for anyone that is currently paying off large credit card debt. As credit cards often carry a high rate of interest, it is often a better idea to take out a secured loan at a lower interest rate and paying off the credit card debt in full.

This ultimately means that the monthly repayments you’ll make for the secured loan will be lower than if you continued paying the credit card debt at the higher rates of interest.