When considering a Debt Consolidation Loan, it is important to be aware of the advantages and disadvantages involved before you take the plunge. Debt Consolidation, involves taking out a loan in order to pay off several separate debts e.g. two credit cards and an overdraft.
Here are some of the advantages of consolidating debt:
- You can often reduce the overall interest you are paying or you are going to pay.
- It can often lead to you paying off your debt sooner.
- It reduces the number of individual repayments you need to think about.
- It is an English, Welsh, Northern Irish and Scottish Debt Solution.
When consolidating your debt, it is important not to simply see these newly ’emptied’ credit cards and overdrafts as an opportunity to go on another spending spree, otherwise not only will you be back to square one with individual, unmanageable repayments, but you’ll also have the newly acquired Consolidaton Loan repayments to deal with as well. Be sensible and close the credit card accounts or at the very least request to have the credit limit reduced and take the cards out of your purse or wallet to remove the option to impulse purchase.
To find out more, take a look at our Debt Consolidation Loan page.