Debt Consolidation Loans

Debt Consolidation Loans ( as explained in Consolidation Loans ) offer the chance to tidy up your existing debts, store cards, credit cards, old loan repayments etc and make a fresh start. You can often reduce your monthly outgoings and thus increase your day to day cash flow.

There are many options available whan taking out a debt consolidation loan, here are some of the main ones:

• Unsecured debt consolidation loans
• Secured debt consolidation loans
• Debt consolidation consultations

Unsecured loans are outlines in our unsecured loan article. They are an option that most people over 18 years of age can apply for and don't have the requirement of homeownership.

Secured loans are an option only available to home owners and are explained in more detail in our secured loans article. This type of loan can often allow for longer repayment terms.

Debt consolidation consultations are offered by many companies. If you decide to go down this road you will not be applying for a loan to repay your debts but instead the company will contact your creditors and work towards lowering the amount of repayments you need to make, i.e cutting your overall debt down. This is normally done for people who have a lot of debt and cannot possibly repay.

Debt consolidation term

You have to make a decision with your debt consolidation plans as th the term you wish to repay your debts over. You have two broad options.

• Paying over a short period
• Paying over a long period

If you decide to pay your debt off over a longer paeriod you will have the benifit of a lower monthly repayment to allow you to have an easier immediate cash flow. This however means that you will end up paying more interest overall as the interest will be applied over a longer period.

If you decide to pay your debt off over a shorter period you will have the benifit of paying less interest overall as the interest will not be applied to the loan, for as long. However you will have higher monthly repayments and this could cause further cash flow problems leading to more debt if not carefully managed.