What Can I Do If I Don’t Meet The Criteria?
If you have checked your debt consolidation loans eligibility and are worried that you don’t meet the criteria for any lender or broker, there are several alternatives that you could consider.
Balance Transfer Credit Card
If you need to consolidate credit card debt, your outstanding balance could be moved to a balance transfer card for easy management. If you choose a 0% balance transfer credit card, you may not have to pay interest on your debt for a few months, which can save you money and help to clear your debt quickly. Make sure you check the fine print to ensure there is no fee for the amount you transfer.
Release Equity From Your Home
If you are a homeowner, another option is a to release equity from your property. It is usually better to do this if your existing mortgage deal is coming to an end, otherwise you may have to pay an early repayment fee. If your property has seen an increase in value, you could choose to take out a new, larger mortgage and use some of the equity to pay off other debts. However, it is important to remember that the size of your mortgage loan will increase, so your monthly payments might also go up, even if you secure a mortgage with low interest rates.
A secured loan usually allows you to repay over a longer time frame and borrow a larger amount than a personal loan. However, a secured loan will need to be secured against a high value asset, such as your home or car, which could be repossessed if you cannot keep up with repayments. You should only consider this option if you are confident about making repayments. As there is less of a risk for the lender, you may find that the interest rates offered on secured loans are reasonable.
If you need any more help with finding a suitable alternative to debt consolidation loans, or need further advice on debt consolidation eligibility, please seek impartial support from the Money Advice Service.