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CONSOLIDATION LOANS INFORMATION

Below you will see information on Consolidation Loans.

        

CONSOLIDATION LOANS

A Consolidation loan is basically a loan to pay all of your existing debts, so that instead of several payments to different companies, you combine your debts into one lower monthly payment, over a longer length of time. You will still owe the same total amount, but by simplifying your finances your debt should be more easily managed.

Would I benefit from a consolidation loan?

Consolidation loans are most helpful if you are finding it hard to manage a number of different debts, as it means you only have one to deal with. The lower monthly payments can also take the strain off, leaving you more money each month. Many consolidation loans also have payment protection schemes, so you are covered in the case of accident, sickness or unemployment. It's best to ask when you apply.

Students and consolidation loans

Students may benefit from consolidation loans, as many graduate with multiple debts. By consolidating these debts, it can be easier to get yourself on your feet post graduation, and work towards a better credit situation.

What should I look out for?

If you're thinking about taking out a consolidation loan, the best idea is to look around carefully before committing yourself. Consider how much interest you're paying on your current debts, and see if it's worthwhile consolidating as the interest tends to be higher.

Are there risks?

The main thing is to remember that the debt hasn't reduced or disappeared. Paying off multiple debts with a consolidation loan may create the illusion that you've solved the problem, but you is trap and remember mustn't fall into this trap, remember you still owe at least the same amount. Also bear in mind that your spending habits may have been what created the problem in the first place, make sure you don't get too comfortable and relapse!

Can anyone apply for a consolidation loan?

It depends on the lender, but generally speaking if you are a homeowner with equity, then you should be eligible for a loan, even if you have bad credit, although most lenders require a minimum balance before they will consolidate your loans.

How do I apply for one?

There are many specialist online companies that deal in consolidation loans.

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