Looking for a debt consolidation loan?
There are many reasons to look for a debt consolidation loan. You might have had a change in circumstances like fewer hours at work or an emergency bill. Those regular repayments suddenly became too much to cope with. Maybe you had a holiday expecting to get a bonus at work which never arrived. Or maybe it was just debt creep on the credit cards.
Whatever the reason, there are loads of benefits to a personal loan for debt consolidation.
Why choose a debt repayment loan?
The reason for choosing a debt repayment loan is to consolidate your loan payment into a single amount. Often this will be for less than your current repayments. On the other hand, it’s likely to be for longer than the original debts. If you’re behind on your repayments, a single new loan can fix all of that. You’ll immediately remove any arrears from your credit report and reduce the number of accounts. As long as you keep up with your payments, the affect on your credit file can be positive.
What is a loan for debt consolidation?
Debt consolidation loans are designed for repaying all of your existing debts in one go. Add up all of your credit cards, store cards, short term loans and payday loans into a single number. Work out what you can afford to pay each month and then look at how long you need to borrow for. The length of loan and amount should be manageable so if you need to borrow for longer to keep it affordable then consider that.
What not to do with a personal loan.
Don’t get the personal loan, get your credit score improving and then start borrowing on credit cards again. Once you have consolidated your repayments once, you should avoid borrowing elsewhere until it’s paid in full. If you start to borrow short term loans while repaying a large personal loan, it will rapidly become difficult to pay and you’ll end up much worse off. Keep the duration as low as possible. This way you can clear the debt as quickly as possible.