What is Debt Consolidation?

If you're in debt and are considering consolidation or an alternative solution contact Debt Free Direct on 0800 298 8836 for help and advice.

If your debts are spread across a variety of sources such as credit cards, unsecured loans, unpaid bills and other agreements, a debt consolidation loan can help reduce your repayments and make your overall debts more manageable.

Debt consolidation is often advisable when you have multiple unsecured debts, for example debts on more than one credit card. The consolidation process would allow you to transfer the amount owed on your credit cards into one consolidated loan.

Debt consolidation loans tend to have a lower rate of interest than credit cards, therefore lowering the rate of interest on your repayments and reducing the total monthly amount you are obliged to repay.

However if you have a poor credit history it may be difficult to get accepted for a loan and you may run the risk of getting further into debt if you continue to spend on the cards that you have consolidated.

Alternative solutions include a Debt Management Plan for debts starting at £3000 or an IVA for more serious debt levels of £12,000 and beyond.

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