Debt Consolidation | Guide

Will a debt consolidation loan affect my credit rating?

No, a debt consolidation loan won't damage your credit rating as long as you keep up with your repayments to it.

What if I really can't afford to repay my debts?

If you’re not currently able to afford your debt repayments, borrowing more money is unlikely to help your situation.

Speak to a debt expert about the different options available to you and they’ll be able to advise on your individual situation.

How much does a debt consolation loan cost?

This will vary on a number of different factors, including your credit rating, the period in which you borrow over, any set up costs and the interest rate of the debt consolidation loan.

You could potentially get a loan with a lower interest rate by taking out a loan that’s secured against your property, but remember that securing any debt against property can put that property at risk if you don't repay it as agreed.

Can I consolidate debts with a credit card?

Debt consolidation on a 0% APR credit card is commonly used for consolidating credit card debts - although some other debts can be included too. You'll usually have to pay a 'balance transfer fee', but it would allow you to move debts from other higher cost credit cards. An interest-free introductory period would mean that the debts on this card would not grow (for a certain amount of time, depending on the card).

You need to aim to significantly reduce or pay off your debt whilst the interest free period applies to get the full benefit, as outside of this period, interest will start accruing on it.

What is APR?

APR stands for Annual Percentage Rate and it is used for comparison purposes to show the cost of borrowing on a credit card, mortgage, a loan or other types of borrowing over a 12 month period. It includes any interest and also any extra fees and charges, which can be spread out over the year, meaning the APR is an average of the interest you’ll have to pay overall.

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