Do you need a debt consolidation loan?
If you are in financial difficulties due to debt or have built
up a variety of debts over time, a debt consolidation loan may
be for you. But before you take that route, you should consider
all the options.
However you got into debt - unexpected financial difficulties,
illness, loss of providing member of the family or overspending
- you can turn to several organizations and charities for
advice. These include the Citizen's Advice Bureaux, the Consumer
Credit Counselling service, the Community Legal Service (England
and Wales) or call the National Debtline on 0808 808 4000.
Remember debt consolidation is one option and you should not
feel pressured into taking it. These organizations can help you
consider the alternatives.
Your own lenders can also be surprisingly sympathetic about
restructuring repayments. Talk to them as well.
Having said that, many borrowers can benefit from consolidating
their debts on better interest rate terms. Some credit cards
cost up to 17.9 % (e.g. MBNA) and store cards can cost more.
Consolidating your debt could cut interest payments by up to two
thirds.
It may be more convenient to make one payment rather than
several. Or you can improve your cash flow in the short term by
reducing monthly outgoings. But this may cost you more over time
because you are paying the debt off over a longer period of time.
Be careful if you are borrowing larger sums of money (over