Debt consolidation is unavoidable when you have too many debts or debts that you are struggling to repay. Many people wonder if debt consolidation is worthwhile, if one should consider it or just try to repay the debts as they are trying now. Truth be told, debt consolidation is the only option one has. Debt settlement is certainly an option but it can ruin your credit score. Also debt settlement is unpredictable and not a very easy solution for most people. After all, you don’t get an easy repayment plan. Every creditor or lender will not come together when you wish to settle. You would still have to repay the mutually agreed amount for settlement of each loan individually. Here is how debt consolidation loans and finance industry in the UK work.
Debt consolidation loans and finance industry in the UK will get all your debts consolidated into one. You don’t have to pay your credit card company and some bank separately. You don’t need to worry about each loan or debt. You will have one loan to repay after all your debts are consolidated and you would have one monthly repayment. That payment would be geared towards all the outstanding loans or debts you have. A debt consolidation company will get everything arranged so you don’t have to delve into the complicated details of how the debt consolidating practice works.
Having all your debts combined has another advantage. You will have a single point of contact. It is easier to manage one debt or its repayment. You don’t have to choose which debt you must repay first or when you shall pay whom. The one payment will take care of all your creditors. No collection agent, no phone calls and no unending negotiations with multiple creditors. You simply keep paying once a month and the debt consolidation company will deal with all your creditors. Even if you have one payday loan, one short term loan and some other debt, all these lenders will agree and come together to have their loans settled through one unified repayment.
Debt consolidation loans have lower interest, the fines and penalties are waived, the repayment term is relaxed and you would also get financial counseling. Instead of paying varying and often high rates of interest, you would be paying one low rate of interest. When you opt for debt consolidation, it is known that you are finding it difficult to repay the loans. By that time, the late fees or fines and penalties would have skyrocketed. All these expenses along with mounting interest make it difficult for someone to repay all the loans. Since debt consolidation gets all fines and late fees waived. There itself you get to save some money. With lowered rate of interest, the total amount you owe can be reduced by hundreds and potentially thousands of dollars, depending on how much you owe. Debt consolidation loans and finance industry in the UK allow you an opportunity to repay all your loans, to be free of debt and to have minimal impact on your credit history.