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Consolidating Debts

If you have found yourself with multiple debts piling up every month, you are certainly not alone. The current economic crisis, together with the fact that it was so easy for us to get credit and lending in recent years, has now added to a whole lot of debts for most of us.

If you are finding the stress, both financial and otherwise, of managing multiple debts too much to cope with, consolidating your debts may be a good option, but make sure you think about your consolidation choices and make an informed choice, that will improve your finances in the long term, as well as taking the pressure off a little just now.


The most common thing that people think of when you mention consolidation, is of course a consolidation loan. These work on the basis that you pay one monthly bill instead of multiple, and hopefully that your monthly bill decreases, and/ or the amount of interest you end up paying back does the same.

Shop around

If you shop around and do your homework, you can often find good deals on consolidation loans that will indeed help your financial outlook on the whole but be very wary of signing up for a loan before you’ve worked out exactly what the consequences will be.

Work it out

Many debt consolidation calculators are available online so that you can work out what impact a consolidation loan will have both on your bills and on what you end up paying in total, as well as how long you will be paying it for.

When exploring consolidation options, you should consider the different types of lending that are available to you.


If you are a homeowner, or an owner of property such as vehicles that can be used as security for a loan, and you have a decent credit rating, you should be able to get a good deal with low interest for a consolidation loan. However, the downside is that whatever you’ve used as collateral will be at risk if you fail to keep up with the loan repayments, so be wary.

Secured vs Unsecured

In general, it is recommended that you do not swap unsecured debt for secured debt as this puts your property at risk, however it can be tempting, as you will likely be offered better rates of interest. If you are confident that you can keep up the payments on the loan, you may be happy to consider this, but if there’s any chance at all that you’ll fail to meet the payments, think very carefully before using your property as security.


One option that surprisingly few people think to investigate is talking to your creditors about the situation. In some cases, speaking to e.g., your credit card company about renegotiating the terms/ payments of your credit may be more productive than you might expect.
If you are struggling to work out just what to do about your debts, you can of course seek advice from the Citizens Advice Bureau for free before taking any rash decisions that you may regret.

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