Debt Consolidation Information and Advice Solver

Debt consolidation involves taking out a new loan and using it to pay off all your existing unsecured debts at once, which will leave you with just one debt to repay.

Rather than making multiple monthly payments to multiple creditors, you would make one payment to one creditor until the loan (plus any interest) has been paid off.

There are other benefits a debt consolidation loan could deliver. For example, you may be able to lower your monthly outgoings by repaying the loan more slowly - arranging to spread your repayments out over a longer timeframe.

However, this could lead to you paying more interest in the long run - although this won't necessarily be the case. If you are consolidating debts with a high APR (Annual Percentage Rate), store or credit cards for example, then you may actually save money in interest in the long run by consolidating your debts. This is because the interest rate on your loan may be significantly lower than the interest rates on your 'old' unsecured debts - therefore, the overall amount you repay may be lower. Your debt would be growing for longer, but would be growing more slowly.

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