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What is Debt Consolidation

Debt consolidation is an option available to you as the consumer that allows you to consolidate all you're existing debts or loans into a single one. This is often an option people take when payments on multiple loans or debts become too difficult or unpayable and allows consumers to secure a lower interest rate enabling lower repayments but over a longer period of time. It also has the added advantage of one regular repayment to one company rather then servicing multiple repayments to multiple companies.

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Often debt consolidation can be the consolidation of multiple un-secured loans into another unsecured loan however lower interest rates can be achieved when the loan is secured against an asset that acts as collateral, more often than not this asset is a house. Collateralization of loans allows a lower interest rate simply because in the eyes of a lender the risks are lower as in the event that the loan was not repaid it would be subject to the loan agreement in it which allows the forced sale or "foreclosure of the assets in order to repay the loan.

Debt consolidation can be an advantage to the consumer in the instance of paying off credit card debts as the interest rates of credit cards can be extremely high, some even higher than unsecured loans from high street lenders or banks. If assets such as a house or a car are used in securing consolidation against credit card debt then a low interest rate can be achieved allowing the debt to be paid off sooner. Although for those consumers that use credit cards simply as a means to spend more than their income little advantage will be had from using debt consolidation loans in this manner; as if you are a habitual credit card user then you will simply increase your credit card balance again leaving you in a similar if not worse position than before.

Whilst the theoretical advantages of debt consolidation are clear consumers should be wary of loan companies willing to take advantage of people who are in a negative financial position. Often some unscrupulous firms will target consumers who have little option but to refinance and charge high fees within the loans, these companies are often referred to as "Predatory Lenders". Although most companies will actively seek not to be predatory lenders but in fact to be responsible lenders, one should be cautious of high fees and shop around the market place whilst looking to consolidate debt.

Debt consolidation is a viable option for those who are in the unfortunate position of having overwhelming debt; however this decision should not be taken lightly as consolidation can affect the debtor's ability to discharge debts in the event of bankruptcy.

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  *Residential Status: Please Select UK Homeowner - With Mortgage UK Homeowner - No Mortgage Tenant *Purpose of Loan: Please Select Consolidation Home Improvements Consolidation & Home Improvements Pay Off Debts Car Personal Business Holiday Boat Property Investments Purchase Mortgage Re-Mortgage Other *Loan Amount: Please Select 5,000 7,500 10,000 12,500 15,000 17,500 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 85,000 90,000 95,000 100,000 100,000+ *Loan Term: Please Select 5 Years 6 Years 7 Years 8 Years 9 Years 10 Years 11 Years 12 Years 13 Years 14 Years 15 Years 16 Years 17 Years 18 Years 19 Years 20 Years 21 Years 22 Years 23 Years 24 Years 25 Years 26 Years 27 Years 28 Years 29 Years 30 Years *Property Value: Please Select... 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000 27,500 30,000 32,500 35,000 37,500 40,000 42,500 45,000 47,500 50,000 52,500 55,000 57,500 60,000 62,500 65,000 67,500 70,000 72,500 75,000 77,500 80,000 82,500 85,000 87,500 90,000 92,500 95,000 97,500 100,000 105,000 110,000 115,000 120,000 125,000 130,000 135,000 140,000 145,000 150,000 155,000 160,000 165,000 170,000 175,000 180,000 185,000 190,000 195,000 200,000 205,000 210,000 215,000 220,000 225,000 230,000 235,000 240,000 245,000 250,000 255,000 260,000 265,000 270,000 275,000 280,000 285,000 290,000 295,000 300,000 305,000 310,000 315,000 320,000 325,000 330,000 335,000 340,000 345,000 350,000 355,000 360,000 365,000 370,000 375,000 380,000 385,000 390,000 395,000 400,000 405,000 410,000 415,000 420,000 425,000 430,000 435,000 440,000 445,000 450,000 455,000 460,000 465,000 470,000 475,000 480,000 485,000 490,000 495,000 500,000 505,000 510,000 515,000 520,000 525,000 530,000 535,000 540,000 545,000 550,000 555,000 560,000 565,000 570,000 575,000 580,000 585,000 590,000 595,000 600,000 605,000 610,000 615,000 620,000 625,000 630,000 635,000 640,000 645,000 650,000 655,000 660,000 665,000 670,000 675,000 680,000 685,000 690,000 695,000 700,000 705,000 710,000 715,000 720,000 725,000 730,000 735,000 740,000 745,000 750,000 755,000 760,000 765,000 770,000 775,000 780,000 785,000 790,000 795,000 800,000 805,000 810,000 815,000 820,000 825,000 830,000 835,000 840,000 845,000 850,000 855,000 860,000 865,000 870,000 875,000 880,000 885,000 890,000 895,000 900,000 905,000 910,000 915,000 920,000 925,000 930,000 935,000 940,000 945,000 950,000 955,000 960,000 965,000 970,000 975,000 980,000 985,000 990,000 995,000 1,000,000 *Mortgage Remaining: Please Select... 0 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000 27,500 30,000 32,500 35,000 37,500 40,000 42,500 45,000 47,500 50,000 52,500 55,000 57,500 60,000 62,500 65,000 67,500 70,000 72,500 75,000 77,500 80,000 82,500 85,000 87,500 90,000 92,500 95,000 97,500 100,000 105,000 110,000 115,000 120,000 125,000 130,000 135,000 140,000 145,000 150,000 155,000 160,000 165,000 170,000 175,000 180,000 185,000 190,000 195,000 200,000 205,000 210,000 215,000 220,000 225,000 230,000 235,000 240,000 245,000 250,000 255,000 260,000 265,000 270,000 275,000 280,000 285,000 290,000 295,000 300,000 305,000 310,000 315,000 320,000 325,000 330,000 335,000 340,000 345,000 350,000 355,000 360,000 365,000 370,000 375,000 380,000 385,000 390,000 395,000 400,000 405,000 410,000 415,000 420,000 425,000 430,000 435,000 440,000 445,000 450,000 455,000 460,000 465,000 470,000 475,000 480,000 485,000 490,000 495,000 500,000 505,000 510,000 515,000 520,000 525,000 530,000 535,000 540,000 545,000 550,000 555,000 560,000 565,000 570,000 575,000 580,000 585,000 590,000 595,000 600,000 605,000 610,000 615,000 620,000 625,000 630,000 635,000 640,000 645,000 650,000 655,000 660,000 665,000 670,000 675,000 680,000 685,000 690,000 695,000 700,000 705,000 710,000 715,000 720,000 725,000 730,000 735,000 740,000 745,000 750,000 755,000 760,000 765,000 770,000 775,000 780,000 785,000 790,000 795,000 800,000 805,000 810,000 815,000 820,000 825,000 830,000 835,000 840,000 845,000 850,000 855,000 860,000 865,000 870,000 875,000 880,000 885,000 890,000 895,000 900,000 905,000 910,000 915,000 920,000 925,000 930,000 935,000 940,000 945,000 950,000 955,000 960,000 965,000 970,000 975,000 980,000 985,000 990,000 995,000 1,000,000

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