A debt consolidation loan is used to replace all your existing debts into one payment to a single creditor. The aim is to reduce your monthly payments by aquiring a loan with an average lower APR than you are currently paying.
The disadvantage to this is that the term of the loan may exceed your current expected debt free date and you may end up paying more in the long run.
 Write
off up to 80% of debts |
Only
pay what you can afford |
| Freezing or reduction
of interest |
Protection from creditors |
| One affordable monthly
payment |
Expert impartial
advice |
1. You could pay more in the long run. If you choose to spread out your
payments, you will pay more in interest than if you had repaid the debt
consolidation loan in a short period of time.
2. Although spreading your debts out over a longer period of time will mean
your payments are lower on a month-to-month basis, it will also mean that
your debt is a burden for longer.
3. It’s important not to start spending again. In some cases, people who
reduce their monthly outgoings with a debt consolidation loan can be tempted
to spend more money, and this can lead to even more debt.