Debt Consolidation

Just before the credit crunch, the UK was experiencing a boom. This prosperous period caused many consumers to take out extra home loans, adopt extra credit card debt or renovate their homes. Once the crunch started to bite, some of these people found themselves staring at a mountain of debt that was bigger than they had expected it to be. Others faced the trauma and financial stress caused by redundancy, which resulted in the same situation right across the country.

If you’re looking at outgoings that are threatening to exceed your income, then maybe it’s a good time to consider debt consolidation. In short, you put all your debts together as part of one loan and the biggest loan you are likely to have taken out is your mortgage. Using debt consolidation, you can streamline your payments by looking for a mortgage that offers you better interest rates than those incurred by your other debts, and remortgage to include those sums within the loan. Using this system, you can save hundreds, if not thousands, of pounds in interest fees. In addition, if you shop around you might even be able to find a lender that offers you better interest rates than those offered by your current mortgage provider, saving you even more money.

However, debt consolidation is not to be thought of as an instant cure-all. At the end of the day, you are still borrowing money and that money still has to be repaid. The longer your loan exists, the longer you will be paying interest, so talk to an independent mortgage advisor to be sure that this is the best thing for you.