Are you having a lot of trouble with debt management? Don’t know where your money is going every month? Are you tired of having to keep track of multiple debt payments each month?

If so, debt consolidation is a procedure you can look towards to manage your debts better. I’ll be talking about credit, your credit history, monthly payment, and debt consolidation companies and how they can help you deal with your existing debts.

What is Debt Consolidation?

Consolidation is a procedure where you take out a large personal loan that is equal in value to the loans you owe. 

You do this in order to get a sum of money equal to what you owe, but at a lower rate than your existing debt. This has a couple of exclusive benefits. 

If people need help with their monthly repayment, if it’s too excessive because of multiple lines of interest, they can go to debt consolidation services, those authorised and regulated by the financial conduct authority (FCA).

The loan they get may be at much lower interest than their current debt, particularly if they’re aiming to get secured loans. Secured loans come at lower interest than unsecured loans, generally speaking.

One of the primary reasons why people get a personal loan for debt consolidation is to make your debt easier to manage. 

If you get a large loan at a lower interest rate than what you owe on your existing debt, you’ll potentially have to pay a lower total amount than you otherwise would.

What are Debt Consolidation Companies?

Consolidation services are institutions that help you combine your small loans into one large loan.

That way, you don’t have to worry about keeping track of your payments to multiple lenders, and you can focus your effort on paying one loan back.

These organizations come with a variety of different charges, conditions, rates, and other variations.

Some organizations charge more for what they provide you than others. You can check a particular consolidation organizations’ website to get a better idea of how they can help you.

How Can a Consolidation Company Help Me?

These organizations look at a variety of factors before they determine whether to give you a consolidation loan or not.

Most organizations look at your income, your financial status, how stable your income is likely to be in the future, your rating, and a few other criteria.

Your rating is, of course, one of the most important factors in this regard. It matters both to potential lenders and to these institutions. 

In the UK, there are a large number of separate consolidation agencies, and some are undoubtedly more enticing than others. For this reason, before you step into an arrangement with any organisation, it is necessary to do your homework. 

As is true for every marketplace, in order to make an educated decision, it is necessary to shop and look around first at what’s being offered.

Companies That Can Help You Even With a Bad Score

Here’s a list of institutes you can go to even if your file is poor and you have a bad borrowing and repayment history.

Let’s get right into it.

  • Accept: They are also a broker and not a lender, with the same purpose and mission as Monevo.
  • Aspire Money: They are a lending organization that offers a very low APR, and a flexible loan term.
  • George Banco: They are also a lending organization based in the UK, and they offer lucrative packages for people with a poor rating and record.

FAQs

debt consolidation companies

Should I go to a debt consolidation company?

It depends on if consolidation is right for you and if you can find a reliable, cost-effective consolidation loan.

Here’s how you can determine if consolidation is right for you: does it help you manage your monthly payment better? If so, it can probably help you.

On the contrary, consolidation can negatively affect your credit file, so you need to know what you’re doing.

Will I be charged a fee from a debt consolidation loan service?

This depends.

Some organizations charge more fees than others. Others charge less “setting up” fees, but do ask for higher APR or some other hidden costs.

It can be quite a challenge to find the right organization for your needs.

Can I get an unsecured debt consolidation loan?

You can get an unsecured consolidation loan. There are a few things you need to keep in mind, though.

For one, an unsecured debt consolidation loan is one you’ll usually get at a higher interest rate than a secured loan because you’re not putting up any asset of yours as collateral towards the loan.

If you’re chased by debt collectors who want you to repay them, you need to know how to deal with them.

Unsecured loans are harder to get than secured ones, especially if your rating is bad.

Can I go to a consolidation company with bad credit?

You can.

There are organizations out there that deal specifically with giving personal loans to people with a bad credit rating.

However, be aware that a poor rating can come back to haunt you in other ways, such as these organizations giving you a secured loan only, and risking your ownership of your home in the process.

Can my creditors stop me from going to a consolidation service?

Not usually. Your creditors only care about you having the money to pay them back. Even if you get a consolidation loan, despite your poor credit, if you’re making repayments on time, they won’t really have an issue.

In fact, your creditors may even encourage you to go to a consolidation company if they see that you’re having trouble with repayments. Ultimately, they want to make sure that they’re getting their repayments on time.

Wrapping it Up

This guide talked about how consolidation can help you with a loan on your credit cards, personal loans, and repayments on other avenues.

If you’re registered in England, consolidation may be one of the most useful personal investments you ever make, especially if it helps you manage your loans, streamline your money flow, and pay lower returns on your loans.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
×
×Find your best debt solution SEE IF YOU’RE ELIGIBLE