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Consolidation Loan
You can apply for a loan to clear your debts, which are often marketed as “consolidation loans”, by which you swap some or all of your creditors for just one creditor. If you own your home, the lender is likely to want to have a charge on it: you should seek independent advice as to whether this would be in your best interests. You should shop around for the best deal from high street and internet lenders. If you have a poor credit rating, loans on the best terms may not be available to you.
A consolidation loan will only be of help if:
• it is used to pay some or all of your existing debts
• the repayments are no more than those you are already making towards your existing debts, and you can afford to make them
Otherwise, the new loan will simply add to your debt burden and make your problems worse. You will also need to look very carefully at how long the loan will take to repay; what interest you are going to have to pay compared with what you are currently charged; and what charges or penalties there are, for example for late payments.
If you are not sure about the extent of your problem then try filling in our online Debt Calculator. This will help you calculate how much money you have left over each month to pay your debts (creditors)
Getting in touch with an expert for free advice is as easy as picking up the phone. Call us on free phone 0800 169 1536. If you would like one our experts to contact you to discuss your financial position and how we can help, please send us your details so we can arrange a call back at a time that is convenient to you.