If you are having problems paying your debts because you have multiple creditors, multiple debts and multiple payment dates, then you might be thinking about a personal consolidation loan.
Consolidating your debt into a personal consolidation loan could be useful in a number of ways. As long as you do not continue to acquire more debt on your consolidated cards then you can benefit from one low monthly payment. This new payment will be to your new personal consolidation loan lender, instead of having to make payments to your unsecured creditors.
There are a number of choices that you might want to consider:
Each of these comes with its own advantages and disadvantages and it is important that you are aware of each of them, so you are well informed and can decide which consolidation option is right for your personal financial situation
This is where your unsecured debt will be placed with a secured loan. This means that the debt will now be secured against your asset, most commonly your home.
Securing your debt could sound like a risky financial decision so it is important that work out the maths correctly and ensure that you can afford this new payment. If you fail to make payment to your personal consolidation loan, your loan lender can take legal action to repossess your home.
A unsecured personal consolidation loan takes away this risk as the loan is not secured against any of your assets. You should still ensure that you can afford the new loan payment as the loan lender could still take legal action against you.
Although you do not have to risk losing your home, a personal consolidation loan which is not secured means that you will probably not benefit from a better interest rate; you could find that the interest rate is close to your current unsecured debt. You will also be limited on the amount that you can borrow, unlike a personal consolidation loan which is secured against an asset meaning you can borrow more.
You might not want to get into any more debt to help you with your current financial situation. If you are struggling with your payments, there could be ways that you can benefit from personal consolidation without a loan.
A debt consolidation company will negotiate with your creditors and offer them a lower monthly payment. No matter how many creditors you have, you make one payment to this company and they will fairly distribute the funds.
To see which personal consolidation loan choice is right for you, you need to take professional advice from a reputable debt consolidation company, such as Debt Consolidation.
Call our freephone number 0800 048 3674 today to speak with one of our expert personal debt consolidation advisors.
DebtConsolidation.co.uk is a trading name of Ask Finance Ltd which is registered in England and Wales (company number 4229724), Jackson House, Sibson Rd, Sale, Manchester, M33 7RR. Ask Finance is licensed under the 1974 consumer credit act to carry on the business of consumer credit, consumer brokerage, debt adjusting and debt counselling. Consumer Credit License No: 507130. Ask Finance is authorised and regulated by the Financial Services Authority (FSA) - FSA No: 300490 - for the provision of mortgage advice and arranging insurance.