Debt Consolidation - An Introduction

Debt consolidation is a method of transferring a number of outstanding loans and credit card balances into an other form of loan or credit facility. The purpose of debt consolidation is to simply the repayments and most importantly to reduce the amount of interest payable.

Debt consolidation can bring all your borrowing together into one manageable, monthly payment. Repayment might be spread out over a longer period than the existing loans, and at a lower interest rate

Debt consolidation can be very attractive for someone with a lot of credit card debt. Credit cards and especially store cards have a high interest rate, higher than even an unsecured bank loan. And some with property, such as a home owner could get a lower interest rate with a secured loan using their property as collateral. For someone with a poor credit history a secured loan may be the only option available to them. In effect you would then be converting all your unsecured loans into one loan secured on your property. You should consider very carefully a loan secured on your house. It would be at risk if you did not keep up the repayments.

If you are able to fully repay the loan and do not build up any further credit during that period it will have a positive effect on your credit rating.

Learn more about loans, borrowing, and the way to get out of debt in Get Debt Free

Debt Resources

Debt Consolidation Mortgage Refinance Refinance your mortgage and consolidate debt with About Debt.

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