Streamline your finances by combining all your payments into one simple monthly repayment through your salary
What is Debt Consolidation
Debt consolidation has helped a lot of people manage their debts without going into any type of debt management plan. Debt consolidation consists of bringing all your existing borrowing together, into one monthly repayment. It usually means getting a loan equal to all your total debt (and ideally at a lower interest rate) and using these funds to clear and repay all existing debt. Going forward you will then only be managing one monthly repayment.
The benefit is that it could reduce your monthly repayments, have all your repayments coming out in one monthly repayment, and give you more disposable income. One of the drawbacks of debt consolidation is that you could end up paying more back if you take the loan over a longer period than your original agreement. Metro Moneywise Credit Union does offer Credit Builder Loan to help you get your finances back on track.
How debt consolidation loans work
A debt consolidation loan lets you switch all your existing borrowing on to one loan, so you need only to make one monthly repayment. You can save money with a debt consolidation loan by finding one that charges a lower APR rate than you are currently paying. A debt consolidation loan can be used to cover a range of existing credit including:
Credit Cards – Many credit cards charge high APR rates, which can make them an expensive option for long term borrowing.
Personal Loans – These could be for a car loan, or an unsecured loan
Overdraft – Some overdraft rates can be as high as a staggering 40% APR
Store Cards – Again store card rates can be very high and encourage you to keep spending!