What is Debt Consolidation?
It is a process by which some or all of your debts are consolidated into a larger one, and you pay one monthly payment.
Does a Debt Consolidation Loan just mean more loans?
No. Debt consolidation works by combining multiple loans into one, thereby reducing and eliminating interest, penalties, and late fees.
How can I benefit from a Debt Consolidation Loan?
You make one monthly payment, which is lower than all the combined payments you make to all your creditors. The interest rate you pay is lower, resulting in more of your payment going directly to the principal. In addition, combing all your high interest bills into one easy payment takes the hassle out of bill paying.
How much can I reduce my current monthly payments by?
This will depend on how much you are currently paying and how long you plan to take in repaying the new loan. With this said, reductions in monthly payments can be as much as 75%.
How much can I borrow?
There are a variety of factors which dictate how much you can borrow. While your income and, for secured loans, the equity available in your property are important, the most important factor is your ability to repay the loan.
Over what length of time can I spread my repayments?
This is entirely up to you and will depend on how much you can afford each month. You should remember your original goal-to get out of debt! The longer you take to repay the loan, the more you end up paying in interest.
Can I use the loan for more than debt consolidation?
Yes. Consolidating your existing credit allows you to free up money for other things. You can borrow extra for that new car, boat, or caravan. You can even pay for your dream holiday or that home remodel project. The choice is yours, as long as you do not over-borrow.
What if I have an accident, am ill or get made redundant?
You can always get optional accident, sickness, and unemployment cover if you want the added peace of mind this brings. Life assurance is also a good option.