Before you apply for a new personal loan for debt consolidation, you should think about your goals. You might be looking to:
- change lenders,
- have one regular repayment instead of many,
- lower the total amount you’re making in repayments, or
- reduce your interest rates or monthly fees.
You should weigh up the benefits against the potential costs. For example, if you’re refinancing a fixed rate loan, your current lender might charge you break costs. You need to factor in these costs when considering the potential benefits of consolidating your debt.
If you’re considering debt consolidation as a solution to financial difficulty, you should talk to us first. If you’re having trouble making repayments on existing debts we may be able to help.