A Consolidation Loan
A consolidation loan is a loan which allows you to combine all your existing credit agreements, such as credit cards, store cards and personal loans into one. You will then make repayments to a single lender.
A consolidation loan may also give you the opportunity to repay your existing debts over a longer period of time.
Before taking out a consolidation loan it is vital that you compare the interest rate being offered by this new lender to those rates being charged by your existing lenders. Other questions you should ask yourself or any potential lender include:
- What are the monthly payments and can I afford them?
- Do the lower rates of interest apply for the whole period of the loan?
- What is the total cost of the loan?
- What is the period of the loan?
- Are there any upfront fees or periodic charges - such as late payment charges?
Be particularly careful if the consolidation loan is to be secured on your house, as failure to make the repayments may cost you your home - see also Remortgages.
Whilst care should be exercised before taking out consolidation loans, they can be of use if they reduce the amount paid each month in interest provided they do not come with onerous repayment terms or put you at risk of losing your home.
Although Chamberlain & Co does not itself provide consolidation loans, we do have contacts with various financial institutions, finance brokers and independent financial advisors who can provide details of available loans.
Call us on 0800 195 4585 for further details on Consolidation Loans