Debt consolidation help

15 May2009

Dealing with multiple debts can be stressful and confusing. Managing your finances can be complicated when you have several payments to different creditors going out each month - but there is help available.

A debt consolidation loan could help to make your finances a lot simpler, as well as saving you money each month.

How could debt consolidation help me clear my debt?

A debt consolidation loan could simplify your finances and allow you to repay your debt at a manageable pace.

In short, a debt consolidation loan is a new loan that enables you to pay off your existing debts, leaving you with just one debt to manage, instead of several.

However, it`s not just about making your debt repayments more convenient. Many people who consolidate their debts arrange to repay the debt over a longer time period, bringing their monthly payments down to a level they can realistically afford and freeing up cash for other purposes.

This can be a great help, but be aware that repaying any debt more slowly will also mean you are repaying it for longer - and are therefore paying interest for longer, which could increase the overall amount of interest you will pay.

That said, if the debts you are consolidating have a high interest rate - credit cards, for example - then you could still end up paying less interest overall. Even if you don`t, the most important factor (or at least the most urgent one) for many people is the lower monthly cost.

How do I know if debt consolidation is right for me?

As with any debt solution, a debt consolidation loan is not right for everyone. It depends on how serious your debt situation is, and on your own circumstances.

Typically, a debt consolidation loan is most suited to people with relatively manageable debts. If your debts have become really unmanageable, then the reduction in your outgoings might not be significant enough to make a real difference.

You should always speak to a professional debt adviser before deciding on any debt solution. A debt adviser can recommend the best debt solution for you based on your circumstances.

For more information on debt consolidation and other debt solutions, call us today on 0800 195 2911.

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