Benefits of debt consolidation

manage Debt More Simply

Exchange multiple loan and credit card payments with a single monthly payment

It can be difficult to pay off a number of different loans each month. Each of your loans, bills and other debts you owe may need to be paid on different days. Organising your finances to pay each of these debts can be complicated. With a debt consolidation solution you will only need to pay one loan on a day that suits you. You can also choose whether you would like to pay your loan back on a weekly, fortnightly or monthly basis.

Benefits of debt consolidation
benefits of debt consolidation

Decrease your overall monthly commitments

By consolidating all of your debts into one loan you can reduce the amount you are currently repaying. This is done by paying off all of your current debts in one go and then choosing to repay your loan over a period of time that suits you with repayments that you can afford.

Reduce rates on high interest credit cards, overdrafts or loans

Most of the debts that you will currently have are more than likely high interest rate debts, for example, credit cards and personal loans. The interest rates on these can range from 10-25%. Paying back the interest alone can be crippling.

Lower interest rates
don't affect your credit score

Reduce your payments without affecting your credit rating

If you are finding it difficult to repay your credit cards or loans at the moment, you run the risk of defaulting on your repayments and effectively having this noted on your credit file. By entering a debt consolidation solution to clear your debts, you eliminate the risk of defaulting and affecting your credit file.

Fixed term – you will know exactly when your debts will be repaid

Disadvantages of debt consolidation loans

Longer repayment period

A debt consolidation loan will give you the benefit of a lower interest rate and lower repayments. In order to reduce your repayments you will be paying your loan back over a longer period of time.

Security required

In order to get a debt consolidation loan you will need to put up some form of security against it. Ideally this would be your home. However, if you fail to repay your loan then the lender has authority to repossess your assets.

secutiy required for debt consolidation loan

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