Debt Consolidation
If you are struggling to manage your debts, it may sound like a good idea to pay someone to fix your credit problems and roll all your loans into one loan. Here we explain what to consider before you refinance your loans and how you can get help for free.
Before you apply for a new personal loan for debt consolidation, you should think about your goals. You might be looking to:
-change lenders
-reduce your
-interest rates or monthly fees
Before you apply for a new personal loan for debt consolidation, you should think about your goals. You might be looking to:
-change lenders
-reduce your
-interest rates or monthly fees
Do you have too many debts? Are they getting on top of you? You might wish to put all of the debts together in order to gain control of your cash flow?
Debt consolidation entails the taking out of a single loan to pay off many other loans. This is often done to secure a lower interest rate, or for the convenience of servicing only one loan rather than many.
Debt consolidation can simply be in the form of a number of unsecured loans being consolidated into another unsecured loan. In many cases, however, debt consolidation consists of a loan secured with an asset (usually a house or apartment) which serves as collateral. This type of consolidation allows all debts to be rolled into your mortgage, with the collateralisation allowing the lender to offer a more favourable interest rate.
Debt consolidation entails the taking out of a single loan to pay off many other loans. This is often done to secure a lower interest rate, or for the convenience of servicing only one loan rather than many.
Debt consolidation can simply be in the form of a number of unsecured loans being consolidated into another unsecured loan. In many cases, however, debt consolidation consists of a loan secured with an asset (usually a house or apartment) which serves as collateral. This type of consolidation allows all debts to be rolled into your mortgage, with the collateralisation allowing the lender to offer a more favourable interest rate.
You should weigh up the benefits against the potential costs. For example, if you’re refinancing a fixed rate loan, your current lender might charge you break costs. You need to factor in these costs when considering the potential benefits of consolidating your debt.
