If you have an existing debt with a variety of lenders, it can be hard to juggle repayments
Juggling repayments and keeping up to date with your balances can be very stressful. Debt consolidation loans are one way to reduce the pressure of debt.
Are you considering applying for a debt consolidation loan? Before you decide if it’s the right option, here are some questions to ask yourself:
– What are your reasons?
What are your reasons to take out a debt consolidation loan?
Debt consolidation loans can help to make your debt more manageable, but only if you use them correctly.
You can use a debt consolidation loan to turn all your debts into just one monthly payment, even reducing the amount that you’re paying to clear your debt every month. If you’re struggling to juggle your credit cards and loans, putting them together can help.
Debt consolidation loans become an issue when you’re using them to borrow more money. Don’t consolidate your debt to clear your credit card, then keep it open for additional spending. Once you’ve cleared your other debts, close the accounts and focus on clearing your loan.
– What are the benefits of a debt consolidation loan?
Your debt consolidation loan makes debt easier to manage and can reduce your monthly repayments. Depending on the interest rates and charges of existing debt, it may increase or decrease the amount that you owe overall. What it won’t do is act as an instant fix, solving every single debt problem.
Remember that you’ll still have a loan to pay off, and will need to keep up with your repayments.
– Can I get a debt consolidation loan?
If you want to move several debts into one helpful payment, you might worry about your credit rating. Perhaps you don’t think that self-employed debt consolidation loans are available, or that your poor credit rating will exclude you from this type of loan.