Debt Consolidation generally means clearing your unsecured debts using funds raised by secured or unsecured loans, remortgaging your property or perhaps using equity release. The debts could include credit cards, loans, Council Tax or utility arrears or debts due to HMRC. Debt Consolidation is only recommended if the monies raised will clear your debts, the repayments are affordable and will leave you in a better position financially.
Otherwise known as a personal loan. Difficulty maintaining repayments will affect your credit rating, but the loan company cannot repossess your home.
If you choose a debt consolidation loan, it is highly advised that you ‘shop around’ using comparison websites to find the best deal. It is also advised seeking additional advice before making a final decision as other solutions may be much more suitable. Ensure you compare the APR (Annual Percentage Rate) or the APRC for secured loans as this will include additional costs such as an arrangement fee.