Consolidation Experts

How does debt consolidation work?

If you’re struggling to keep on top of debts, plenty of options are available.

From IVAs to debt management plans, there are so many solutions it’s easy to feel overwhelmed. After all, how do you know which one is right for you? One of the better alternatives could be a debt consolidation loan. Great for handling most forms of unsecured debt, this option helps puts you back in control of your finances.

How does debt consolidation work?

When you apply for debt consolidation, you request an amount which equals – or is slightly more than – the total amount of what you owe. If approved, you use the funds provided to completely repay your creditors one by one. If any of those lenders were harassing you for money – or threatening bailiff intervention – this action should stop that situation from developing further. Now your creditors are repaid, you just have one firm left to repay – the consolidation loan provider. You’ll still owe the same amount of money but:

  • One monthly outgoing is much easier to keep track of than several.
  • The amount you repay each month should be less than what you’re currently making. 
  • Repaying your creditors, and keeping on top of repayments, can benefit your credit score.

During debt consolidation

Fundamentally, debt consolidation is a type of loan – and repayments must still be made. If you choose to apply through us, we’ll help ensure that any loan offers are fair and can be managed with your current financial situation. Even if you miss a payment though, you’ll usually be given the opportunity to rectify the matter. Serious consequences, such as asset seizure or legal action, are only generally last resorts. The repayment terms vary but can last several years. During this time, you’ll need to make the monthly repayments until what you owe is completely cleared. Once this is done though, your money worries may be a thing of the past.

How does debt consolidation work

Will debt consolidation affect my credit score?

Many debt solutions, such as an IVA or bankruptcy, will have a negative effect on your credit score. Although consolidation will initially hamper this rating as well, it can be one of the better ways to improve your score. At first, your score will probably be impacted as you’re taking out a new line of credit. However, you’re then using this money to repay your lenders. Once you start making payments on time, your rating should ultimately improve. Therefore, through debt consolidation, you may find it easier to eventually apply for other financial products, such as a mortgage.

Make the right choice

Debt consolidation may be one option available to you – and you have nothing to lose by enquiring about your eligibility today. One thing is certain though, although it can be tempting to ignore your debts (and see if the situation will rectify itself) financial difficulties usually only become more serious the longer they are left unchecked. Get in touch now and you could finally regain control of your outgoings.

Regain control of your finances – contact us today

Regain control of your finances – contact us today

We want to help you live the life you deserve, free from debt. Together, we can make this dream a reality. See if you qualify for debt consolidation and combine all your debts into one affordable monthly payment. If your application is successful, you could have the funds you need in the next 24 hours.

If your application is successful, you could have the funds you need in the next 24 hours.

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