Putting your eggs into one basket can be a good thing
Consolidation loans can help fix your finances by clearing credit cards and store cards, getting rid of hire purchase payments and simplifying things by combining all your debts in a single monthly payment. They're a very good idea if your finances are causing you sleepless nights.
It's never been easier to get buried in debt: shops offer store cards or tempting hire purchase deals, credit card applications fall through your letterbox every ten minutes, and so on. What most people don't realise is that they're probably paying through the nose for these things: some credit cards have rates of more than 20% APR, while many store cards are scarier still: rates approaching 30% APR aren't uncommon. If you've got store cards or owe money to several different places, consolidation loans can help.
Consolidation loans are so called because they consolidate your borrowing into a single payment. So instead of paying money to this store card, that credit card and those HP firms, you simply make a single monthly payment to the bank each month. Interest rates on consolidation loans tend to be low – under 10% in many cases – which means you'll pay considerably less interest than if you keep things as they are. And consolidation loans can be spread over a long period of time, which can be a big help if you're finding it hard to make ends meet. You can get consolidation loans from almost all mainstream lenders, including the high street banks.
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