
Debt consolidation is a way of clearing your existing debts such as credit cards or store cards, so that you are left with one, lower monthly payment. It means that you arrange a single loan to pay off the balance of your current debts, leaving you with only the loan to pay every month.
Debt Consolidation usually means lower interest rates
Generally the interest rate on things like credit cards and store cards is significantly high so a debt consolidation loan is usually a cheaper alternative. For example an average credit card APR is around 18%, but most secured loan rates are significantly lower - MoneyClick have homeowner loans from just 7.3%. Find out more here >>
Clear date of being debt free when you consolidate debts
With debts like credit cards the payments can go on and on with you paying the minimum monthly amount. With debt consolidation loans you would have clear date for the final payment, giving you an exact idea of when you would be debt free.
Debt consolidation loans can help to reduce your monthly outgoings
Perhaps your income has been reduced and you need to lower your monthly outgoings. Maybe something unexpected has happened and you need to free up a little extra money. A consolidation loan could be the answer as it could help clear your exising debts so that you have one lower monthly payment.
We would always recommend that you talk to an independent adviser if you are unsure of anything. By discussing your needs with one of our advisers you are under no obligations and may end the conversation at any time.
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