Over the past 20 years or so, access to affordable credit has become common place and wherever you go on the high street, you will see inducements being offered to entice people into taking credit of some kind. And why not?
Being able to have today - pay tomorrow is a convenience that helps many of us function from one month to the next.
But it can be very easy to lose track of how much credit you have and what it costs to maintain and, when you stretch too far, you'll need to search for ways to consolidate.
Consolidation loans are an excellent way of getting back on track with your finances, especially when money becomes tight and there's too much month left at the end of the money!
The concept of consolidation is to restructure your existing debt into a single, more affordable payment which you repay to one lender rather than to many different card companies.
The biggest advantage provided by a consolidation loan is the reduction in your monthly outgoings.
Store cards and credit cards are notoriously expensive if the debt held on them can't be repaid quickly. If you're only able to afford repay minimum repayments then you'll know from experience how expensive the core debt becomes.
When multiplied over several different cards the costs of simply standing still can be immense. So to have the opportunity to consolidate at a lower payment for the same level of debt can be really beneficial.
Another major advantage is having only one debt repayment to make. Before consolidation you might have several cards that need to be maintained, which can become difficult to manage if they're for differing amounts, payable at different times of the month.
By restructuring your debt you will be committing yourself to a fixed term agreement of a specific monthly payment. This agreement will not be a flexible agreement like a credit card, which allows you to increase or decrease your payment according to your preference.
Also, depending on the amount of original debt that requires consolidating, you could be committing yourself to a substantial repayment term.
You will need to pass a credit check to become eligible for a consolidation loan and you may also be required to demonstrate to the lender that the loan will be affordable for you.
A consolidation loan is a 'borrowing' option and it is often said that you can't borrow money to get out of debt.
There are a few 'none borrowing' options available which do act as alternative solutions for people who have reached the end of the credit line.
There are Debt Management Plans and IVAs for people living in England Wales and Northern Ireland, then there's the Protected Trust Deed for people living in Scotland.
You can read more information here-
Get A Professional Opinion
When trying to establish the most favourable solution for you we advise you to seek our independent professional opinion. We will explain all your options to you, then leave you to decide for yourself which option is best for you.
If you would like a private consultation with a professional adviser, simply call 0800 088 7502.
Or, alternatively, complete this form and one of our advisers will call you at your preferred time.