http://www.debts.org/index.php en info@debts.org Copyright 2008 2008-12-01T15:28:00+00:00 http://www.debts.org/11/index/debt_consolidation_loans/ http://www.debts.org/11/index/debt_consolidation_loans/#When:13:36:01Z Keeping track of multiple loan repayments can be like spinning plates, and you only have to be late once to cause some damage. Debt consolidation loans are one way to make loan repayments simpler and more affordable. If you have existing credit in the form of credit cards, bank loans or store cards, consolidating all those debts into one monthly sum could offer you an easier way to manage your debts. More... What are Debt Consolidation Loans? Debt consolidation loans are one of the most popular ways to pay off your existing debts, including credit cards, overdrafts and store cards, where you can  transfer the debt into one manageable, monthly repayment. Debt Consolidation Loans – Advantages The key to saving money through debt consolidation loans is to cut your monthly outgoings, pay a lower rate of interest or spread repayments over a longer term. Debt Consolidation Loans can: 1. Reduce monthly payments. 2. Improve your credit rating (on condition of no further debt). 3. Reduce the rate of interest. Your eligibility will depend on the level of debt you have and if you pose a credit risk. By converting your monthly outgoings into a single consolidation loan, you can repay a debt (in full) that was previously being repaid at the minimum rate. Repaying minimum rate only serves to skim off the interest incurred, instead of reducing the debt itself. Debt Consolidation Loans – Disadvantages You have probably seen the headlines: Fast debt consolidation loans, Secured debt consolidation loans, Adverse credit debt consolidation and Low interest debt consolidation loans uk – but be careful. Debt consolidation is still a loan and therefore another form of debt. However, if you can get a loan with a low interest rate then consolidating your debts into one affordable level of borrowing may be the right move. If it is the right option, ask yourself if you will be able to resist the temptation to take on any unnecessary debt? After all, if it was easy to get into debt once… Debts.org urges you to resist taking an extra £1,000 as part of your consolidation loan, remember the idea is to reduce debt as quickly as possible. Also avoid a consolidation loan if the interest rate is not an improvement on existing levels of interest. While there are benefits to a debt consolidation loan, it is worth reviewing some of the disadvantages: 1. You won’t reduce your debt just the payments to service it. 2. It can significantly extend the repayment period. 3. Some consolidation loans incur penalties for early payment. 4. The loan you use to consolidate is often secured against your property. 5. The debt consolidation loan itself may prove difficult to pay off and does not alleviate a serious debt crisis. Am I eligible for debt consolidation loans? If you have a history of bad credit you may not be eligible for unsecured debt consolidation. Instead a lender may only be prepared to offer a secured consolidation loan. If this is the case you will need to offer your home as security for the loan – unless another asset is accepted by the lender as surety. If your outstanding debt is low and you have a healthy credit rating, a personal loan could help you consolidate and reduce your debt. Debt consolidation loans for home owners are more obtainable due to the surety made agains the loan, which in most cases is your property. Return to Debts homepage. Debt Consolidation Loans 2007-11-07T13:36:01+00:00