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How can we help? > Debt Consolidation
The adverts on television make it sound like debt consolidation
loans will solve all my financial problems. Are these loans
really the perfect way to solve my debt problems?
For some people the solution of debt consolidation can help
them to manage their payments. Debt consolidation through
re-mortgaging or taking a loan is usually the most popular
solution that people chose. However, debt consolidation is
not recommended if you are suffering from more serious debt.
Is Debt Consolidation the right choice for you?
It all depends on the level of debt, income and current repayment
levels. If you have serious debts choosing to consolidate
may worsen your situation by adding to your financial responsibility.
If you default on a loan used to consolidate your debts and
your loan is demanded you will be liable to pay back all the
outstanding interest and could be in a worse situation than
when you started.
The costs of settling an existing loan, such as redemption
penalties, and set up costs of a new loan can be significant.
You may have a lower monthly payment because the loan is
spread over a longer period of time, also you may not be able
to raise enough money through a loan or re-mortgage to clear
your debt. In this case you may be able to offer a lump sum
settlement through an IVA.
Most debtors attempting to obtain a debt consolidation loan
face issues with unsecured debt, such as credit card bills.
Consolidation loans are usually secured loans which becomes
of critical importance if you cannot afford to make your repayments,
your home could be at risk.
Debt consolidation may not be the best option for you call
one of our professional debt advisers for free advice as to
your options on 0800 019 9646.
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