Who are you paying?
Are you paying a number of different creditors such as credit cards, store cards, HP agreements and loans? If the answer is yes then Debt Consolidation may well be the answer for you.
By repaying multiple debts you could be paying higher interest and have the inconvenience of dealing with lots of different creditors. If you miss any payments you could incur higher interest and late payment charges, which could prove to be a headache when trying to keep up to date with your different creditors.
What Debt Consolidation can do for you?
Debt consolidation could allow you to put all your debts into one affordable monthly payment at a lower interest rate than your combined creditors.
By paying off your creditors with one affordable loan your credit score may improve as you will reduce the amount of creditors and clear any arrears you may have.
Disadvantages of a Consolidation Loan
- A Consolidation may result in you paying the debt back over a longer period than if you had stayed with your original creditors.
- You may also pay more in interest and payments over the term of the loan.
- If you use a secured loan for a consolidation your home may be at risk if you do not keep up-to-date with the payments.