Personal Loan Store Logo
UK Loan Comparisons

The Benefits of Consolidation Loans

With UK consumer debt reaching unprecedented levels, many are seeking ways to help reduce their debts.

Record levels of UK credit card spending are resulting in many household budgets being under increased strain. Credit card debt especially means personal unsecured debt being subject to high interest rates.

Many UK consumers turn to consolidation loans to pay off their various debts such as credit cards and store cards, for example, but fall into the trap of accruing other debt afterwards thus defeating the purpose of the consolidation loan.

The many benefits of a consolidation loan can only be enjoyed if one exercises discipline with future spending and credit habits. This includes not taking on any further debt.

Consumers who have various unsecured debt, such as credit cards, catalogues etc struggle with the high rates of interest these debts accrue. Debts on credit cards interest rates of anything between 15-22% for purchases.

Some of the benefits of a consolidation loan are:

  • Clearing outstanding debt to various creditors
  • Reducing interest that debts are accruing
  • One monthly payment rather than many small monthly payments that have to be paid at various dates throughout the month, thus making it easier to budget for the month.
  • Consolidation loans tend to charge far lower rates of interest than other forms of unsecured credit, saving the consumer a significant amount of money over the long run.
  • Can help reduce the chances of defaulting on debt repayments, which can adversely affect your credit rating.
Whilst these type of unsecured loans can help consumers reduce the levels of interest they will owe on their debt, it’s vitally important that no other debt is taken out or else it’s back to square one. Financial discipline is the only way to reap the benefits of consolidating one’s debts.

Alisdair Milton
6th January 2007


More Information:

  • Choosing The Right Mortgage
    The market is flooded with different types of mortgages, but how do you know which one is right for you? The decision has to be yours, whether you take advice from an Independent Financial Advisor or do your own research.
  • The Dangers of Negative Equity
    The great thing about buying a property is that it’s a guaranteed investment, prices just keep going up, right? Wrong. We look at what happens when the bubble bursts and prices drop.
  • Re-Mortgaging – The How and Why
    There comes a time in the life of most home owners when they stop and ponder on the wisdom of re-mortgaging. Hundreds of thousands of people do it every year. We look at why they do it and how to do it.
  • Why Does The Interest Rate Of Your Mortgage Change?
    The biggest difference between a mortgage and other types of loan is the fact that the interest rate changes throughout the term of the loan. Why is this? And which type of interest-rate arrangement is best?
  • The True Cost Of Your Mortgage
    It’s easy to say “go and research the market place to find the cheapest mortgage”, but is it that easy to actually do it and how do you know that you have really got the best mortgage deal when you’ve finished?


Early Redemption Penalties - Loan Extras - Debt Consolidation Bad Credit - Choosing a Personal Loan - Loan Penalties - Money Saving Loan Tips - Loan Reviews
Site Map - About Us