In simple terms, debt consolidation means taking a loan to pay off other loans. The concept may sound absurd, but it really helps when your debts get on to your head and you do not know how to manage your finances. If you have different loans running at different interest rates, payable to different lenders, debt consolidation may be a viable solution. January is the month that records maximum number of debt consolidation loans in UK. Availing such a loan may fetch you the benefits cited below.
1.Lower monthly payments
2.Relief from creditors' pressure
3.Pay to multiple debts in one go
4.Help avoid bankruptcy, CCJ and insolvency
5.Helps in tax savings as well
6.Avoid late fees on loans and credit cards
7.New loan on lower APR than that on credit cards
So, if you are tired from the persistent calls from your lenders and want to get rid off the debt pressure, apply for debt consolidation loans [http://www.adverse-credit-debt-consolidation.co.uk/debt-consolidation -loans-in-uk.asp]. But one should make it a point that despite the monthly payments can often be lower, the total amount repaid is often significantly higher due to the long period of the loan.
Lenders in the UK loan market offer secured as well unsecured debt consolidation loans. Although the unsecured are quite popular and in demand, lenders prefer to give secured loans. Following are the types of debt consolidation loan products available in the market.
Secured debt consolidation loans – Pledge your home as security and avail a secured debt consolidation loan at a low APR. These loans also offer other benefits like flexible repayment options.
Unsecured debt consolidation loans – These loans give you the benefit of consolidating debts without placing any asset as security.
Bad credit debt consolidation loans – Most borrowers who apply for debt consolidation loans suffer from bad credit. So, lenders also offer bad credit debt consolidation loans
The borrowers can choose from any of the debt consolidation loans referred above, as per their preference and financial status.