If you are in debt and wondering what debt consolidation is – this article may be able to help.
As has always been the case it is easy to get into debt – from changes in situation, store cards, credit cards, loans, mortgage payments and overdrafts – outgoings can quickly become more than incomings.
This guide will look at what debt consolidation is and look at some of the different types of debt consolidation.
First, if you haven’t already, consider reading our guide to debt consolidation.
What is Debt Consolidation?
Debt consolidation is a general term, that can actually refer to more than one financial product.
Debt Consolidation Loans
A debt consolidation loan is usually a large loan – that will combine all of a person’s debts together and allow them to pay them all back in monthly payments.
This could potentially make it simpler to see how much money you owe and to keep on top of your debt repayments.
There are various “debt consolidation loan” providers – who will advertise debt consolidation loans.
These loans will often take the form of personal loans – either secured or unsecured.
You should always be very careful before taking out any form of loan secured against your property.
Sometimes repaying a loan over a longer period can make a loan more expensive in the long-run.
However more manageable interest payments may make it easier to repay and help avoid problems.
Types of Debt Consolidation: Debt Solutions
Debt consolidation can also refer to one of many different types of debt solutions.
The new Personal Insolvency Bill brought in a range of different debt resolution mechanisms to help people struggling with their debts.
Debt Relief Notices, Debt Settlement Arrangements and Personal Insolvency Arrangements are three of the main debt solutions that were be created under the new laws.
Remember: if you have debt problems you should speak to your lender or a debt advice organisation as soon as possible.
There are specialist debt advice organisations in Ireland that may be able to help such as MABS.
Article by Loans Ireland. Guides, information and news on loans, debt and mortgages in Ireland.
This article was last checked and updated 5th December 2017.