Why people benefit from debt consolidation loans

If you have several debts with different providers, you’ll know how stressful it can be to juggle them. It’s all-too-easy to inadvertently miss payments or accidentally cancel a direct debit without realising the affect it could have on your credit score – or worse.

Debt consolidation loans enable people to combine all of their debt into one, simple monthly payment that’s affordable, far harder to miss and which enables them to stick to their budget while paving the way to a debt-free future.

But, what is debt consolidation?

Debt consolidation loans simply require that people take out one larger loan that is used to pay off all of their separate, existing debts. This results in one payment each month, rather than what they’ll have been used to – lots of individual direct debits and standing orders.

It’s important to remember that debt consolidation loans don’t make your debts disappear, they simply make it much easier to manage multiple debts. For most people, they’re a sensible step forward when it comes to getting back into the black.

Why people benefit from debt consolidation loans 1 - Debt Consolidation Loans

How will a debt consolidation loan work if I take one out?

For a debt consolidation loan to be effective, you need to borrow enough money to cover the sum of your existing debts.

You’ll go through a simple approval process and receive an answer, super-fast. Once approved, your debt consolidation loan will be used to pay off each existing lender to clear your debts with them.

Once that’s done, you’ll be left with one manageable monthly direct debit that will begin the process of paying off the larger loan. Although some people like to think of that larger loan as simply a ‘house’ for all the existing, small loans and debts they had.

Most existing debts can be settled with a debt consolidation loan, from credit card balances to credit agreements and standard loans.

Will it impact my credit score?

Just like any debt, a debt consolidation loan will impact your credit score depending on whether or not you keep up with the repayments.

The great thing about debt consolidation loans is that they’re far easier to manage, due to the fact they exist as one single monthly payment. That means you’re less likely to miss them or inadvertently cancel the direct debit, and if you keep up the repayments each month, it should have a positive impact on your credit score.

Why debt consolidation?

  • Improve your monthly budget
    A debt consolidation loan will enable you to group all your existing borrowing and the monthly repayments are easier to manage.
  • Reduced overall repayments
    A debt consolidation loan could even save you money each month if the interest rate is less than the combined total interest of the previous loans.
  • Improved credit rating
    The simplicity of repaying a debt consolidation loan means that you are more likely to repay the debt on time every month. This will prove you to be a responsible borrower, which will have a positive effect on your credit score.

 

Why our customers take out debt consolidation loans

Taking out any kind of loan is a big decision, and not one that should be made on a whim or without full consideration. However, there are several reasons our customers take out debt consolidation loans:

  • Admin is reduced – it goes without saying that multiple debts require lots of time and effort in terms of repaying and ensuring enough money is available keep up with the monthly payments
  • Savings can be made – it might be that the debt consolidation loan’s rate is better than that of your existing debts, thus saving you money in the long run
  • Credit scores can be boosted – streamlined personal debt means you’re less likely to miss payments
  • Monthly budgets are easier to make – with one monthly payment, keeping track of your outgoings and income is far easier, enabling you to budget properly and without fear of running short on cash

Contact us today

We’d love to answer any queries you might have on debt consolidation loans, so please do not hesitate to get in touch with our friendly team, today.

Why debt consolidation?

  • Improve your monthly budget
    A debt consolidation loan will enable you to group all your existing borrowing and the monthly repayments are easier to manage.
  • Reduced overall repayments
    A debt consolidation loan could even save you money each month if the interest rate is less than the combined total interest of the previous loans.
  • Improved credit rating
    The simplicity of repaying a debt consolidation loan means that you are more likely to repay the debt on time every month. This will prove you to be a responsible borrower, which will have a positive effect on your credit score.