Loans Debt Consolidation
If you've got lots of loans, consider replacing them with one
If you've accumulated a large number of loans debt consolidation could make your money go further. By combining all your existing debt into a single, large loan, your monthly payments will be lower – and in many cases you'll pay less interest, too.
If you have too many loans debt consolidation can help. Debt consolidation loans replace your existing debts with a single, large loan, and in most cases the monthly payments will be considerably lower than the total of your existing monthly payments.
Because the interest rates are high for small loans debt consolidation could mean you pay less money in interest: instead of five loans of £3,000 with interest rates of over 10%, a single loan of £15,000 usually comes with a much lower rate – usually considerably less than 10%. However, it's important to remember that if you take a debt consolidation loan over a long period of time then you'll still pay a hefty amount of money in interest charges.
Although they can be used to replace existing loans debt consolidation loans are best suited to replacing credit card and store cards. Such cards tend to have very high interest rates – some store cards have APRs of almost 30% - whereas a debt consolidation loan is likely to come with an APR of less than 10%.
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