Debt consolidating finance uk
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 you may have taken out.
Debt consolidation is a manageable and often more affordable way to regain control of your finances.
Debt consolidation can be a useful strategy in some situations but for many it can involve extra costs, and potentially makes a difficult situation much worse.
That's why it's best to get expert debt advice before taking out a consolidation loan.
There are two types of debt consolidation loan: Debt consolidation loans that are secured against your home are sometimes called homeowner loans.
You might be offered a secured loan if you owe a lot of money or if you have a poor credit history.
While consolidating debt often sounds like a promising solution, this could make your situation worse.
Your interest rate will never change during the life of your loan.
When you’re in debt, missing just one payment can damage your credit score and increase your interest rate.
Your repayment period may be extended by combining various different debts into one large repayment.
With a longer repayment period, you may also pay more interest over time than you would have if you paid off each debt individually.