Debt Consolidation Loans

With a debt consolidation loan you can pay off all or most of your existing loans from credit cards, hire purchase and other personal loans with one new loan. The attraction of this type of loan is that you can significantly reduce your monthly outgoings because the repayments will usually be spread over a longer period. Depending on your personal circumstances, this key benefit, of making it easier to meet your monthly repayments, can outweigh the disadvantage of debt consolidation loans where you could be taking on a larger loan over a longer term, even where the interest rate on the new loan is lower than the rate you may be paying on your existing debts.

Most debt consolidation loans are secured against your home so your home is at risk if you do not keep up repayments. If this type of loan is suitable for you then shop around and compare the APR of the different loans. Remember that a variable APR means repayments will be variable. You could also look at unsecured personal loans but the interest rates quoted can be much higher than with secured loans.