A Consolidation Loan is best described as a loan to pay off lots of smaller debts or loans. It replaces lots of individual payments with one repayment. Consolidation Loans are often viewed as a favoured option. You must however make sure this is the best option for you as well as your creditors.
1. Eases management of debt situation by reducing lots of individual payments to one.
2. The loan payment is likely to be at an affordable rate - although the size of total repayment may be greater.
3. Avoids the negative stigma of bankruptcy or an individual voluntary arrangement.
1. If not chosen carefully the loan can be considerably more expensive than managing existing debts.
2. It can last for a considerable number of years as opposed to bankruptcy (which usually only lasts 1 year) or an individual voluntary arrangement (normally lasting between 3 - 5 years).
3. If the loan is secured on your property and payments are not maintained your property will be at risk.
Dedt Guidance do not offer or lend consolidation loans. We may, in certain circumstances, recommend a consolidation loan as a solution to you. Should you obtain a loan from a loan company introduced by us they will pay us commission as a broker. You may be able to obtain a loan on better terms than those offered by such a loan company and are recommended to compare loans available from different lenders.
