Promise can offer loans which allow you to consolidate your debts whilst raising extra cash for other purposes.
What is a debt consolidation loan?
A debt consolidation loan means taking out a new loan to pay off existing debts. By doing so, you can make managing your finances simpler and reduce your monthly outgoings. When you’ve got several debt repayments going to several lenders every month it can be difficult to budget. But a debt consolidation loan could make things simpler by rolling your debts into one lower manageable monthly payment.
Lower monthly payments
Debt consolidation loans can help reduce your monthly payments by either getting you a lower interest rate than your current unsecured credit, by allowing you to repay your loans over a longer period or often both.
Bear in mind that paying your debt off over a longer period means you will pay interest for longer so could pay more interest in the long term. However lower interest rates may help to counteract this and you can pay the loan off sooner once your monthly payments are more manageable. Also think carefully before securing other debts against your home. We will explain and calculate the details for you.
Is taking out a new loan a good idea if I’m already in debt?
The size of a debt consolidation loan will equal the amount needed to pay off the debts in question. Typically this will result in a lower contractual monthly payment but a higher total repayable. The debt consolidation loan is likely to be with you for a longer period of time than if the debt was not consolidated. It’s important to get advice on this sort of loan. Only when you are armed with the necessary facts and figures can a decision be made on whether it makes good sense. It is the most common type of loan we do with customers generally valuing lower monthly payments over the total repayable.
Should I look at debt management or an Individual Voluntary Agreement instead?
You could but take care, especially if you have a reasonable credit profile. Consider all the options open to you before doing anything. A step in the wrong direction could do irreparable damage.
Is it easy to get a debt consolidation loan?
Homeowners find it easier, especially if they have equity in their property as they can get a personal secured loan. The important thing is to take action straight away. The worse your credit profile gets, the less options you have. If you are worried, call Promise straight away and we can give loan options to compare with your alternatives.