Debt Consolidation Loans – Are These The Right Option For You?

Everyone’s looking to get rid of debt and debt consolidation loans may be the answer. More and more of us have found that rising mortgage interest rates, higher fuel costs and increases in the cost of living have left us living beyond our means. It’s all too easy to obtain credit, but much less easy to repay it. With consumer debt now in the trillions, it’s time to do something to manage the debt. So, what are the options for debt help and when should you choose debt consolidation?

There are many strategies for repaying outstanding debt or getting it down to a manageable level. If you have a sizeable debt which you think you’ll be able to repay within five years, then perhaps you should look into debt management. If your debts are large and virtually unmanageable, then an Individual Voluntary Arrangement (IVA) might suit you. If your debts are less than £15,000, then debt consolidation might be the answer.

There are different options for getting debt consolidation loans. You may be able to get a loan from your bank or building society as an unsecured loan. Although it’s another loan, getting that money will enable you to repay your debt in a single monthly payment rather than several. This may work well if your credit rating is not too severely impaired.

The Secured Loan Option

However, there’s also another option for getting debt consolidation loans. If you are a homeowner, you can get a debt consolidation loan secured on your home. This has several advantages. First of all, you will pay a lower interest rate because the lender has the security of your home as a guarantee of repayment. Second, you may be able to repay the money over a longer term. These are two good reasons to consider a secured debt consolidation loan.

It doesn’t take long to arrange such a loan, as there are many lenders who specialise in this area. Once you have the money, it’s easy to repay your store cards, credit cards and other loans, secure in the knowledge that you have reduce the number of creditors you owe. Even better, you now only have to make a single payment each month. If you have the discipline to refrain from running up more debts, then this strategy could lead to you becoming debt free. Shop around for the right deal, looking out for early redemption penalties and other fine print. If it all adds up, then perhaps it’s time to take out a debt consolidation loan.