Could debt consolidation be the cure to your financial ill-health?

Debt consolidation involves taking out a single loan in order to pay off all of your other, existing debt. You could decide to take this form of financial treatment in order to secure a lower rate of interest, thereby lowering your monthly repayments, or to have greater control over your budget and your monthly repayments. This debt solution differs from a debt management plan as management will not clear your previous debts whereas a debt consolidation loan settles all of your outstanding debt.

A debt management plan treats financial ill-health by reducing monthly repayment amount and additional interest charges through negotiation with unsecured creditors. A debt management solution can only be applied to your unsecured debt; mortgage payments, hire purchase agreements and any other secured debt will not be covered. Should you also be afflicted by this kind of financial ill health, Debtsolver will be able to suggest alternative courses of financial first aid.

The Debt Consolidation procedure can either involve the consolidation of multiple unsecured loans under a new unsecured loan, or your debts are consolidated and secured against some collateral. This collateral will usually be your home but may be another asset. As a secured loan places the lender at less risk, they will often reward this with a better rate of interest than would be available with an unsecured consolidation loan. Obviously, less risk to creditor implies greater risk to you. If you fail to keep up with the repayments, you could lose your home.

For those who are suffering from bad financial health as a result of mounting credit card debt, the debt consolidation treatment offers significant advantages. Avoiding the high rates of interest charged by credit card companies is particularly important. Often, the interest rates they charge are so high that it can be a challenge to tackle any of the original debt. Debtsolver are here to provide financial first aid, to help you get out of debt quickly and efficiently. As everyone faces different financial pressures, the means of treatment will need to reflect these differences. Let Debtsolver diagnose the proper course of treatment to your cure your credit problem.

Debt consolidation will be best suited to those with high levels of credit card and high street store cards debt. The average store card has an APR of 30% and it is estimated that there are in excess of 14 million in the UK. In response to this popularity, the UK Competition Commission claimed that shoppers were paying grossly inflated interest rates on their cards, resulting in £100 million worth of overcharging each year.

Simplifying your various repayment commitments by consolidating them under one loan can reduce the risk of paying the excessive fees associated with late payments and alleviate the stress of having to manage multiple creditors.

How does the Debt Consolidation procedure work?

First of all, Debtsolver will review your personal financial circumstances, making sure that a consolidation loan is the debt solution best suited to your circumstances.

To take full advantage of your consolidation loan, it will usually be secured against your home. This can be risky as missed payments can result in repossession. Debt consolidation will not be the right method of treatment for everyone. If your financial difficulties are so severe that you require a more rigorous course of financial first aid, you may find that an IVA or bankruptcy procedure is your best option.

If a debt consolidation loan is your best option, your outstanding unsecured loans will be paid off by a new one with more favourable terms. At Debtsolver, we know the importance of prompt treatment. So, any enquiries will get a response within 24 hours.

For more information, visit www.debtsolver.co.uk and fill out our debt wizard. We’ll be able to help you decide which debt solution or method of treatment will best suit your financial circumstances.