You may be trying to reorganise your debt, or repay a credit card bill – debt consolidation can be useful if done in the right circumstances.
What is Debt Consolidation?
Debt consolidation can mean one of two different things.
“Debt consolidation loans” are one form of debt consolidation – a loan that is large enough to combine at least one debt, with the general intention being to make the debt repayment more affordable.
The other form of debt consolidation can be one of a variety of debt solutions – such as debt management, or in the near future in Ireland a Debt Relief Notie (DRN), Debt Settlement Agreement (DSA) or Personal Insolvency Arrangement (PIA). You can read more about about these new debt solutions here.
What are the Advantages of Debt Consolidation?
Debt consolidation essentially means combining more than one debt, into a single more manageable monthly payment.
If done correctly this could take the pressure off to some extent – making your payments more manageable.
What are the Disadvantages of Debt Consolidation?
Sometimes debt consolidation can reduce high interest rate loans such as payday loans to a lower rate – meaning less may be paid off in total.
However sometimes paying a loan off over a longer period may mean you will pay more in total.
It is important to study the different loan rates closely to make sure debt consolidation is suitable.
Getting Debt Advice
It may be a good idea to speak to debt professional if you are worried about your debts.
There are various charities and organisations that may be able to help.
It is always a good idea to speak to your lender as soon as possible if you are struggling to repay a loan.
They may be able to help by reducing or freezing interest, or otherwise help with your loan.
More debt consolidation guides:
Article by LoansIreland.ie. Guides, help and information on debt consolidation, loans and mortgages in Ireland.