Debt consolidation loans helps you in getting all your existing debts consolidated with the help of loan amount. In simpler words, you can repay all your debts with the debt consolidation loans. Advantages of a debt consolidation loan are:
Helps in avoiding bankruptcy
Eliminating creditor harassment and threatening calls
Lowering down the debt payments up to 50%
One lender one monthly repayment
Debt consolidation loans can be applied with or without the presence of collateral. So whether you are a homeowner or non-homeowner or tenant or a PG, you can easily apply for such loans. Yes, the collateral presence has some benefits in form of low rate, flexible terms and conditions, larger amounts to borrow. On the other hand an unsecured debt consolidation loan is not much behind in terms of benefits. The absence of collateral reduces the time in approval process making the loan suitable for immediate needs. The interest rates are competitive.
Amounts and repayment terms
You can borrow from ₤1000 to ₤25000 if collateral is not there, this limits extends up to ₤75000 with collateral. Same is the case with repayment term. For an unsecured loan, the repayment term will be between 6 months to 10 years whereas for a secured debt consolidation loan the repayment term will be varying between 5 to 25 years depending upon the amount borrowed.
Effect on your credit score
A credit score is the true reflection of a borrower’s honesty in handling and repaying the debts. Carrying too many debts affects your credit score adversely. A debt consolidation loan can help you recover from such adverse effects on your score. As lesser the debts, better the score.
Things on which you need to be clear while going for a debt consolidation loan
Is there any fees for apply for the loan?
What options are available for the interest i.e. fixed or floating?
What will be the amount for installments?
How can I find a good debt consolidation loan deal?
The search process
Efforts always benefit you in form of rewards. In case of a debt consolidation loan, the effort is the search for loan; the reward is the low rate of interest which you may get. You can conduct your search on internet. There are so many loan websites, each with several quotes to choose from. You can compare these quotes and sort out the one meeting your requirements to the fullest. Lastly you can apply for a debt consolidation loan for removal of your constant worries regarding debts.
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