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Debt Consolidation Loan Advice - The Facts

What is debt consolidation?

Debt consolidation is a method of debt settlement. It is when you take out a new loan to pay off all your existing debts. By consolidating your debt to a single smaller monthly repayment you can pay off your existing debts quicker. In some cases you can half your monthly repayments. You will also benefit from a reduction in stress caused by trying to meet the demands from lots of different creditors.

Repayment amounts for consolidation loans are likely to be lower than your current credit card/store cards repayments due to interest rates being lower. An important distinction to make when choosing this type of loan is whether it is secured or unsecured.

• Unsecured Loan- You do not have to be a home owner as this type of loan is not attached to your property.

• Secured Loan – Applies to homeowners only. By securing a debt against your home you must be aware that your home could be repossessed if you do not keep up repayments.

 

When deciding to apply for a new loan you must consider all your options very carefully as some may seem like the solution to your debt problems however this may be in the short term only.

How does a consolidation loan work?

The following table compares aspects of consolidation loans compared with credit card/ store card debts:

Compare Consolidation Loans with Credit Cards

Consolidation Loans	Credit cards/ store cards
Repayments over a long-time period (long-term commitment)	Repayments made over a short-time period (short-term commitment)
Lower Interest Rate	High interest-rate
One Debt	Multiple Debts

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Should I apply for a debt consolidation loan?

Please read through the following advice before applying for a consolidation loan:

Should you apply for a loan to consolidate your debt?

Yes	No
If you are paying high interest charges & you are looking for a lower rate to save money.	If you have already consolidated your debt several times in the past.
If your income is suddenly reduced for example, a wage cut, & therefore you need to reduce your monthly repayment amount.	If your new consolidated debt will include payments induced by previous consolidation loans.
If you suddenly need to raise extra money for an unexpected commitment.	If your aim of debt consolidation is to free up debt from credit cards or store cards so that you can use them again.
If you want to relieve creditor pressure	If you’ve chosen a secured loan you may not be willing to risk losing your property if you fail to make repayments. Think seriously about this first.
If you want to maintain & rebuild your credit record.

 

Get free Advice & Quotes from Debt Consolidation specialists:

• Fill out the simple – no obligation form

• Wait for qualified advisors to get in touch and discuss your personal circumstances.
  

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.  YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The actual rate will depend upon your circumstances.  Ask for a personalised illustration.  There will be a fee for mortgage advice.  The fee will normally be 2% of the mortgage advance, minimum of £950 and a maximum of £3000.The fee can usually be added to the mortgage amount.

Enable Finance Ltd. is authorised and regulated by the Financial Services Authority for mortgages and non-investment insurance.  Buy-to-Let mortgages are not normally regulated by the Financial Services Authority.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE