If you have a lot of independant debts, say credit card debt, loans, overdrafts and the likes, then
debt consolidation is a means of taking all these debts and gathering them into one monthly payment. The purpose of debt consolidation is to help you better manage your debt problems.
The way debt consolidation works is by collating all of your existing debts and paying them off with one large loan. Then, the only payment you are left with is the repayment of that particular loan. The repayments are normally lower and over a further extended period of time. Therefore making your payments more manageable.
Debt Consolidation Example:
Unsecured loan of £5,000
Overdraft of £1,500
Credit Card Bill of £3,000
Store Card of £500
You borrow a debt consolidation loan of £10,000 to pay off all these debts. The payback interest is lower, the repayments are lower and it is also possible to extend the repayment period to reduce the payments even further.
Debt consolidation can be appropriate, depending on the amount of creditors and different outgoing bills you have. If you are
nb.* The suitability of consolidation also depends on the level of your debts. There may be a more suitable debt solution to help you deal with your debts.
This depends on exactly how much money you are paying and how long you want to repay the loan borrowed. Reductions in monthly payments can be highly reduced.
This is entirely up to you and will depend on how much you can afford each month. Most loans are usually available over 3 to 25 years, though some mortgages can be spread over a longer period of time, depending on your circumstances.
Certainly. Consolidating your existing credit allows you to free up money for other things. You can borrow extra for that new car, boat or caravan, to pay for your dream holiday or you can have the new windows or conservatory put in. The choice is yours. Just remember, you are paying off debts and do not over-borrow.
Some companies will arrange accident, sickness and unemployment cover if you want the added peace of mind this brings. Life assurance is also advisable. We would strongly advise that you consider very carefully before taking cover as it can be very costly to do so as some companies charge too much for this.
Absolutely. If your consolidation loan is secured against your house then you can use the proceeds of the sale to pay the outstanding balance of the loan or, where you are moving to another property, you may be able to transfer it to your new home. Contact us and we can provide you with some options that may be suitable for you.
" From start to finish they have been upfront and honest. They have helped me put my life back on track, thanks guys :-) "
Work out what your new monthly debt repayment could be by filling in our debt and budget calculator form.
A couple were jointly paying creditors over £700 per month. We were able to have this payment reduced to £300 per month, with all interest and charges frozen. After 8 months of paying this reduced sum, they proposed to remortgage their home. This was successful and they released £19,000. Their creditors accepted this as a full and final settlement of their debts.
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