01 Aug 2019, Author:

Better debt management is the key to being debt free. If you’re able to cut the cost of what you’re borrowing – and handle repayments more efficiently – then you can achieve your financial goals more quickly. A consolidation loan could help you to clear all your existing debt with one loan. This type of finance is available to just about everyone and there are many different options when it comes to cost and affordability. If you’re looking to clear your debt with one loan then consolidation finance could hold the key.

 

“I want to clear my debt with one loan”

 

This may sound like a solution that is too good to be true but you really can clear all your debt with just one loan. Some of the benefits of opting for this type of finance include:

 

  • Debt that is easier to manage
  • One monthly repayment instead of multiple payments on various different debts
  • Minimising what you pay in interest
  • Finding one low cost loan that is fee-free
  • Clearing all your existing debts to start afresh
  • Working towards being debt free by reducing how much you’re paying to borrow
  • Simplifying your finances with just one loan to manage
  • Reducing your monthly repayment figure to make your finances more affordable
  • Helping to rebuild damage that has been done to a credit score with an affordable single monthly repayment – if you meet every repayment you can improve your credit history

 

Debt consolidation loans

 

It’s simple to consolidate your debt with one loan. Many lenders offer debt consolidation loans today and there are no restrictions on the type of debt that you can use the loan for. Debt consolidation loans work in several easy steps:

 

  1. Identify how much debt you have, how much is left to pay off on each debt and what you’re paying for each one in terms of interest and any applicable fees.
  2. Start shopping around debt consolidation lenders to see what your options are.
  3. Look for a debt consolidation loan that will cost less in total than what you’re currently paying for all your existing debts.
  4. Check your debt consolidation loans eligibility – this will be different with each lender and depends on a range of factors that are explored below.
  5. Make an application for the debt consolidation loan that is the best option for you.
  6. When your application is approved and the loan has been paid into your account, use it to repay all your existing debts.
  7. Start making repayments on your new debt consolidation loan

 

Debt consolidation loans – the options

 

There is a debt consolidation loan for everyone, whether you have a high income but lots of debt or you’re struggling with a low credit score and a low income. Different lenders offer different debt consolidation loans and it’s always worth spending some time researching which might be the best option for you. In particular, you’ll need to consider:

 

  • Secured or unsecured? If you want to borrow a secured debt consolidation loan then you’ll need an asset, such as a property, to borrow against. Unsecured loans don’t require assets but you will need to have a good credit score.
  • What about a guarantor? If you have a low income or your credit score isn’t in great shape then you may need to have access to a guarantor if you want to borrow a debt consolidation loan. Guarantors usually need to be over the age of 18 and have a good credit score themselves. Some lenders require guarantors to be homeowners and all will say that a guarantor must be based in the UK to be eligible to help you.
  • Can you improve your credit score? If you have a good credit score then you are likely to get a better deal on your debt consolidation loan. There are a number of ways that you can boost your credit score if it’s currently low. For example, you can check your credit report for mistakes, ensure that you make repayments on any existing loans or credit on time and avoid making multiple loan applications in a short space of time.

 

Debt consolidation loans eligibility

 

Different lenders have different requirements when it comes to eligibility for debt consolidation loans. It’s often worth using a debt consolidation loans eligibility checker to see what kind of finance would work best for you. The factors that lenders may take into account when it comes to eligibility include:

 

  • Homeowner status
  • How you’re employed (e.g. self employed)
  • Your annual income
  • Monthly take home pay vs. monthly outgoings
  • How much you want to borrow
  • How long you want to borrow the money for

 

The best way to consolidate debt 

 

Consolidating your debt with one single loan is simple, quick and easy to arrange. Debt consolidation loans are available even if your credit score is not ideal, or if you have a low income – it’s all about finding the right debt consolidation finance for you.