Other debt consolidation issues to consider
Before considering whether or not to take out a debt consolidation loan, there are some issues that need to be considered.
First and foremost, you could be sure that a debt consolidation loan is the best option from the alternatives available such as debt management or a re-mortgage loan for example. For people facing insolvency an Individual Voluntary Arrangement or even bankruptcy may well be a better option.
Once you have taken financial advice and considered all the options available, if you do apply for a debt consolidation loan, you should work out exactly what you can afford to pay each month.
Other important factors to consider are:
• what is the annual percentage rate (APR) and whether or not it is variable
• what the total cost of the loan will be
• the duration of the loan
• the amount to be repaid monthly
• the consequences of missing a monthly payment
• any charges that might apply if you repay the loan early
• what happens if you decide to move home
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