If you have borrowings and outstanding balances on credit cards and/or with banks or building societies, even with loan lenders and are struggling to make everything balance, then consider your options and investigate the idea of consolidating your debts into one, easy to manage monthly repayment with one single provider… When it comes to budgeting and consolidating finances into easier to manage, monthly chunks there is no such better option for many than a debt consolidation loan. But what is a debt consolidation loan and is it right for you?
Should you apply for a debt consolidation loan?
Depending on how many different outstanding balances and borrowings as well as companies you owe and how much money you owe each company will expose whether a debt consolidation loan is right for you. You can read some tips on consolidation but if you think you might fall into this group then indeed it may be time to sit down and start to look at your incomings and outgoings to get an idea of just where your money is going each month.
If you have a lot of different creditors and payments coming out of your account at different times a month then indeed a consolidation loan might suit you, the loan itself shall pay off all your outstanding creditors and leave you with one monthly bill which can be spread over a longer term to ensure affordability and repayments (explained further here).
Don’t know who too or when you owe it?
If at some points during the month the fact that you owe various companies various amounts of money could mean that you lose track of repayments. How much you owe and who you owe it to. Sometimes this can mean that your outstanding balances can increase (particularly if you start to miss any repayments) and your credit score is in jeopardy should you fail to meet repayments too; as such interest rates on the money you have already borrowed can rise and change the terms of your agreement into a “higher interest” agreement moving forwards. By not addressing these issues you may place a further burden on your shoulders as now you may have to repay the companies at a higher rate of interest to settle your original loan amount.
For this reason always check the legal info and read the FAQs and contract information before you sign for a loan as these terms shall be spell out in advance in these documents.
Cant afford to pay back everyone?
Ensuring you meet all repayments in advance or at the time they are due is key to maintaining multiple lenders, hence should you foresee that you might not be able to repay one or more of your creditors, not only should you inform them in advance. If this applies to you, beginning the process of applying for a debt consolidation loan is perhaps right, by checking out companies who specialise in bad credit or low credit debt consolidations loans you are sure to find a product which can not only make your life easier and less stressful but can also put you in a position where you may be able to free up some collateral from within your existing incomings.
How easy are they to set up?
Incredibly easy as the debt consolidation lender often sets it up all for you! All you need to do is apply with a lender who is right for you and in the UK most lenders are required to print information on things like complaints but, you can also check reviews online too.
Remember check your terms and conditions but most importantly keep up repayments!