Do you want to reduce your outgoings?

In the current economic ‘climate’, every penny counts – and having a bit more room in your budget every month could make a big difference.

If you have unsecured debts – for example, a few credit cards or an overdraft – that you’re repaying generally well every month, you may be looking for a way to stop ‘juggling’ multiple payments with multiple lenders, and rein in the amount you see leaving your account on a regular basis to cover your repayments.
If this sounds familiar to you, a debt consolidation loan could be the way forward with your finances. Let’s look at what debt consolidation is and how it could help make your budget more flexible.

What is a debt consolidation loan?

A debt consolidation loan is a loan you could take out to pay off your existing unsecured debts. By doing this, you’ll effectively have just one debt (the loan itself) to repay, so you won’t have to keep on top of several repayments every month – which isn’t always easy if you have multiple financial commitments to manage on a monthly basis.

Furthermore, making just one payment per month to one lender means you won’t have to deal with phone calls, letters and other correspondence from multiple lenders if any minor issues arise, which you could find time-consuming and stressful.
As with all types of loan, a debt consolidation loan could only be appropriate if you can afford the monthly repayments towards it – and you’re confident you can make these until you’ve repaid the loan in full.

How could debt consolidation reduce my outgoings?

Do you want a bit more flexibility with your monthly budget? A debt consolidation loan could help to reduce your outgoings.

You could agree to repay the loan over a longer period, which means your monthly repayments will be smaller than if you were paying back the loan more quickly. This means that less of your budget will be ‘eaten up’ by your debt repayments – it’ll ‘free up’ a bit more of your money every month.
However, you should bear in mind that repaying your loan over a longer period could be more expensive overall, as interest will add up over this time too.

Is debt consolidation right for me?

Debt consolidation is just one of a number of possible approaches that could help you with your debts, depending on your circumstances. Debt Advice Now offer debt management and debt consolidation – and talking to a professional debt adviser before you make any decisions should give you the confidence that you’re taking the right approach to your debts.