Getting additional loans while consolidating
Having a range of different debts in various forms and across an array of lenders can be difficult to manage.
Even the most organised of individuals can struggle to keep up with repayments on multiple debts and accidentally missing one can have a huge impact on your credit score and even lead to repossession depending on the type of loan.
Getting a debt consolidation loan before your finances become a really serious problem is often the best way to take control of your finances and avoid paying expensive interest rates.
When considering a debt consolidation loan, it is essential to properly work out the cost of the loan compared with the cost of your existing debts.
When you have multiple different debts, it is possible to merge them together into one debt consolidation loan to make them easier to manage and lower the monthly repayments.
Debt consolidation loans allow you to borrow enough money to pay off all your existing debts, meaning you then owe the money to just one lender.
You then just need to pay back the one single loan, with one interest rate and one monthly repayment.
If you are struggling to manage multiple debts, it is important to properly understand what a debt consolidation loan is, how they work and the alternatives available before making any final decisions.
Make sure you carefully calculate all of the fees and costs involved to work out which is the cheaper option.