Debt Consolidation Loans
If you are looking to take out a debt consolidation loan to reduce your outgoings we have lenders that can help.
This is a specialist area and our advisers can provide you with advice to help you get the right loan.
If you have a low credit score or bad credit registered we have lenders that can still help you consolidate your debts.
Get Free Quotes For Debt Consolidation Loans
Debt consolidation is the process of taking out a loan to pay off one or more debts that you currently have. For example, credit card balances or small loans which you may have taken out or, in many cases, both of these. Debt consolidation is a manageable and often more affordable way to regain control of your finances and reducing the amount of your monthly outgoings into one manageable payment rather than several.
Debt consolidation loans can make a great deal of sense under the right circumstances. There of course many things to consider before deciding to take the route of a debt consolidation loan but overall this may be a sensible solution for people that may have a number of smaller loans that may be starting to get a little out of control. It is always important to try and maintain a good credit score at all times, however, if you have some debts and are at risk of not being able to make the required payments, then a debt consolidation loan will help by consolidating your various loans into one monthly payment.
People who have taken shorter term loans such as payday loans may well be paying an extraordinary amount of interest. What was seemingly a good idea at the time may have turned into something of a nightmare and the sooner the debt can be settled the better. Another expensive debt is credit cards. It is very easy and tempting to use your full borrowing limit on a credit card but getting things back on track is a different matter and requires repaying the amount that you have spent, plus often with considerable interest and this can be very tricky.
Also, there are occasions in life when your personal situations change and you may find that your finances are stretched with other new commitments and you are struggling to manage.
Is it a good idea to get a debt consolidation loan?
Whether consolidating your debt is a good idea or not depends on both your personal financial situation and on the type of debt consolidation being considered. Consolidating debt with a loan could reduce your monthly payments and provide near term relief but a lengthier term could mean paying more in total interest.
Does debt consolidation ruin your credit?
The way debt consolidation affects your credit depends on the various options you choose. If you consolidate by taking a personal loan to pay off your credit cards, your utilization ratio could go down, causing your score to go up.
There are two types of debt consolidation loan:
Secured - the amount you borrow is secured against an asset, typically your home. It is important to note that if you miss repayments your home will be at risk.
Unsecured - the loan is not secured against your home or other assets.
Debt consolidation loans can pull together all types of outstanding multiple debts into a simple and manageable monthly payment. No extra charges, no late payment fees, just a single affordable monthly payment. The borrower knows exactly the total amount due each month and the time of the month when payment is due. This makes it much easier to budget accordingly and enables you to make sure that you stay on top of your finances – this is a key advantage with a debt consolidation loan.
Applying for a debt consolidation loan
You will be required to submit the details of all your debts so they can be consolidated into all that you have outstanding. Once the loan is approved, the new lender will get in touch with your original lenders to pay off the old debts. Until you receive a written confirmation from the lender that your original loans are paid off, you should continue with your monthly payments. That way, you will not be at risk of missing a payment. This is a great option if you have a high credit score. You can get the loan with a low-interest rate, which will help you save in the long term.
One element that needs to be considered though is potential early redemption fees - that is the settlement charged on a loan if settled early. It is a relatively easy calculation to work out if these redemption fees outweigh the interest saved by using a debt consolidation loan. This issue does not occur with credit cards and if people have a few high outstanding balances on high interest credit cards then the decision to take out a debt consolidation loan becomes a lot easier. Another element that requires thought is that the overall amount of money you pay could be higher than your existing arrangements depending on the term of the new loan.
Can I get a debt consolidation loan with poor credit?
If you have low average to bad credit (below 660 credit score) you may still qualify for a debt consolidation loan but the interest rate will be high. Many people choose to consolidate debt because of the high interest rates making it hard to pay down the principal balance.
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We Gather Information Required to Search the Market
We gather some basic information about you using our quick online form
Conduct a Whole of the Market Comparision
We will search 100’s of providers to find you the lenders who are willing to approve your loan
Provide full service through to completion
We will show you rates along with the monthly repayments. This will not affect your credit score. We’ll also explain any fees if you progress at this point and as long as you are happy to proceed, provide you with the full service through to completion of your loan being accepted
THE ACTUAL RATE AVAILIABLE WILL DEPEND UPON YOUR CIRCUMSTANCES. PLEASE ASK FOR A PERSONALISED ILLUSTRATION.
LOANS MAY BE SECURED ON YOUR HOME. YOU WILL HAVE TO PAY EARLY REDEMPTION CHARGES THIS WILL VARY. A VARIABLE RATE LOAN MAY GO UP OR DOWN IN LINE WITH THE BANK OF ENGLAND BASE RATE. IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
WARNING: LATE REPAYMENT CAN CAUSE YOU SERIOUS MONEY PROBLEMS. FOR HELP, GO TO MONEY ADVICE SERVICE.
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