Unsecured Debt Consolidation Loans
Watch out for big differences in the small print
Unsecured debt consolidation loans may seem like your ticket out of financial misery, but it's important to make sure you can afford the repayments – and we'd strongly recommend payment protection insurance. When you're comparing loans, check the small print carefully and compare the cost of payment protection too.
Unsecured debt consolidation loans can help you escape from crippling debt, but there are huge differences between different lenders' products. APRs can differ widely from lender to lender, and the cost of payment protection insurance varies too. In some cases, the APRs quoted are for secured loans only – so you won't be offered a similar interest rate for unsecured debt consolidation loans. Once again it's the dreaded "typical APR" that tends to be quoted, and in our experience the actual rates offered are often much higher.
In many cases unsecured debt consolidation loans are a last resort for people who have run up too much debt, which means that many lenders will consider such loans as high risk. As a result interest rates tend to be higher than those offered for mainstream personal loans, and you may find that big name lenders will be unwilling to consider your application. Shopping around is essential, but don't just compare the APRs: you'll often find significant differences in the cost of payment protection insurance from different lenders.
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