Debt Consolidation Loans UK

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A Guide to Debt Consolidation Loans

Many people in the UK are burdened with debt. Common types of debt include credit cards, store cards, bank overdrafts and unsecured personal loans.

There are two big problems with these kinds of debt:

They incur high rates of interest.
It is all too easy to get even more into debt.

Very often people slip into debt gradually, perhaps because of some change in their lifestyle. Often a vicious circle takes over, with debts piling on debts. If you find yourself in this situation, it is important to take control and to begin climbing out of debt.

Benefits of Debt Consolidation
For many people, a debt consolidation loan offers a practical solution to this problem. There are two key benefits of a debt consolidation loan:

By replacing a set of loans (credit cards, overdraft, etc) with a single loan at a fixed rate of interest, you can begin to regain control over your finances.
By securing the loan on property (i.e. your home) you can borrow at a much lower rate of interest, and reduce your monthly repayments by up to a half.

Pitfalls
It seems that a debt consolidation loan is likely to solve a lot of problems, so what could the downside possibly be?

Simply stated, the reason why a debt consolidation loan is not a universal solution to the problem of debt is that once you have cleared your overdraft and credit card bills and reduced your monthly payments, you may be tempted to start spending again, running up further debts and ending up in an even worse state than before! That does happen, and before taking out a debt consolidation loan, you need to ask yourself whether you would be likely to do the same. If you cannot honestly answer "no", then a debt consolidation loan may not be right for you.

When is a debt consolidation loan the right solution?
A debt consolidation loan will be the right answer if you have temporary slipped into debt (perhaps due to a change in personal circumstances) and want to get out of debt faster. It can cut your interest rate and your monthly repayments and simplify your finances, putting you back in control. By securing the loan on property you are making the most of your available assets.

The benefits are that you can cut your monthly bills and at the same time pay off your existing debts in a controlled timescale. You can also use the loan to free up an additional sum of money for any purpose, for example to buy a car.

When is it NOT the right solution?
If debt is a way of life, if you have consolidated debts before, or if you don't trust yourself to use the opportunity to climb out of debt, then a consolidation loan may not be the answer. For example, if you aim is to clear your credit cards or store cards so that you can start spending on them again, you may be headed for further trouble.

What next?
If you are a UK homeowner,we can find the best possible secured loan to fit your circumstances. Start now by competing our online application form to get your finances back under control.

If you are not a homeowner, then an unsecured debt consolidation loan will be your best option.

Debt Consolidation Loans UK is a trading style of Noble Business Services, 411-413 St Leonards Road, Windsor, SL4 3DT. Licensed credit brokers, licence number 323701. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. 12.5% APR typical variable.