Debt Consolidation Loan Articles

Personal debt in the UK has exceeded £1¼ trillion, increasing by £1 million every 4 minutes. With consumer borrowing running at a record high, finance lenders within the UK are adapting their products to enable them to offer debt consolidation loans for the purpose of combining a number of loans or credit agreements into one affordable monthly payment.

Borrowers seeking debt consolidation loans do not necessarily have bad credit. Many consumers realise that their debts are much easier to manage if they are combined into one loan. The borrower would be able to use this finance to pay off all of their existing debts and concentrate on meeting just one monthly payment. Some borrowers may have accumulated larger debts and are struggling to meet the required repayments. In these cases, a debt consolidation loan would allow the borrower to spread the repayment period over a longer term and therefore reduce their monthly outgoings. A debt consolidation loan is more than likely to be on a lower rate of interest than many credit or store cards so the borrower could actually save money by taking this sort of finance.

There are currently a large number of lenders in the UK who offer competitive debt consolidation loans to suit all circumstances. Whether the client has a bad credit history or simply wants to simplify their financial affairs, a debt consolidation loan will allow all existing finance to be repaid.

Debt consolidation loans are available on both a secured and unsecured basis. If the borrower already has a mortgage it may be that they wish to take advantage of the equity in their property and arrange a secured loan for the purposes of consolidating existing debt. Alternatively, the borrower could choose to extend their mortgage by means of a further advance to raise a debt consolidation loan. If the finance is secured on the property by means of a 2nd charge in addition to the existing mortgage, the borrower can choose terms of repayment up to 25 years.

Secured debt consolidation loans can be completed relatively quickly, typically within around 17 working days. There should never be any up-front fees associated with the arrangement of a debt consolidation loan as the broker packaging the finance should absorb any initial costs that are incurred. The broker will also search a wide range of products to ensure that the borrower applying for finance gets the best product available to suit their own personal circumstances.

Interest rates on secured loans for the purpose of debt consolidation range from as little as 7.7% APR for prime applicants, and the current typical rate is calculated at approximately 13%.

Debt Consolidation Loan Articles