Debt Consolidation Loans
Debt Consolidation Loans for both homeowners and tenants with all types of credit history with the most suitable APR.
Debt Consolidation Without a Loan
Any Purpose Loans and Mortgages
Debt Consolidation Options
Debt consolidation is a possible solution to many individuals’ debt problems. A debt consolidation loan allows you to repay existing debts and take control of your finances by replacing multiple repayments with one, affordable monthly payment.
Unsecured Consolidation Loans
Unsecured Debt Consolidation loans are generally most suitable for people with relatively low levels of debt (under £10,000) and a reasonable credit history. The advantage being that consolidating debt this way results in just one, normally lower, monthly payment. A disadvantage is that you’re less able to negotiate later should you face repayment difficulties than if you had multiple creditors.
Secured debt consolidation Loans
The most common type of debt consolidation is a secured consolidation loan. This is only available to homeowners with at least 25% equity in their property. It normally combines multiple unsecured loans into one secured loan. The main advantage being that monthly repayments and interest rates are reduced. On the other hand your home may be at risk of repossession of and you will expect to repay more in total interest over the longer period of the loan. During the current economic climate this solution becomes less of an option as house values decrease and lending criteria becomes tighter.
Debt Consolidation Remortgage
A debt consolidation remortgage is similar to a secured homeowner loan, except that the entire loan is refinanced rather than taking out a second loan. A major advantage of this over a secured debt consolation loan is this that a lower interest rate is often achievable. Even if you do not need to consolidate debt, reviewing your mortgage is always advisable to ensure you’re getting the best possible deal. Getting the correct remortage advice and can potentially save money once your tie in period has expired.
Debt consolidation by debt management is the only viable debt solution for many people. Debts are consolidated into a single payment made to the debt management company who distribute monies pro-rata based on amount owed to all the creditors. The main advantage is payments are based on affordability, regardless of the level of debt and in many cases, creditors will agree to stop interest and changes. The downside is that once you have broken your original contractual agreements this may have an adverse effect on your credit rating. When you see adverts for debt consolidation without a loan, it normally refers to debt management. Debt management companies normally charge a fee, but you need to compare the cost of this to the saving in interest , presuming they are able to freeze interest on your debts.
IVAs (Individual Voluntary Arrangements)
An individual voluntary arrangement is a popular debt consolidation option for those with debts of £10,000 or more, and little prospect of being able to repay them in full – but can repay a substantial amount over 5 years.
A Harrington Brooks IVA allows for one affordable monthly payment, normally payable for 60 months, after which, the remaining debt is written off. For those who qualify, an IVA can result in a saving of £1000′s over a consolidation loan.
See debt consolidation alternatives for the pros and cons of the above in table format.
Find The Appropriate Debt Advice
The guide to the right, produced by the Insolvency Service, explains debt solutions options from a neutral point of view, detailing the pros and cons of each.