General Information on Debt Consolidation

If you find it difficult to meet the monthly repayments on your credit cards or store cards, hire purchase agreements or other personal loans, then debt consolidation could be an option for you. It allows you to pay off your existing debts with just one loan. Although payment has to be made every month for this new debt, the monthly outgoings can be significantly less because repayments for this single loan will usually made over a longer period.

A debt consolidation loan will almost always be secured against your home and you may be able to borrow more than you need to cover your existing debts. But your home is at risk and you can lose your home if you do not keep up repayments.

The credit score done by the lender when you apply for the debt consolidation loan together with the credit check will make them aware of your creditworthiness. If you have an adverse credit rating you will usually be asked to pay more for your loan because of the higher risk perceived by the lender. To find out what information is held about you in your credit history and, where possible, make corrections to any errors, you can write to one of the main credit reference agencies like Equifax or Experian.

You could try getting an unsecured personal loan to pay off your existing debts but lenders will charge you a higher interest rate to reflect their risk in not having any charge on your property.

To find the best deal to consolidate your debts you need to compare quotations and the APR of the various loans. The fastest way to do this is on the lenders' websites with many providers giving information and quotes on their websites.