If you have small balance payments to make towards old loans, and as a result of which your monthly outgoings have gone up substantially, then you can get rid of these old payments immediately through taking out unsecured debt consolidation loan. But make sure that you borrow an amount at low cost, so that the new loan does not become a repayment burden.
All your unsecured loans and balance payments on credit cards can be immediately paid off through the borrowed amount under these loans. After getting rid of the payments, you now are left with just single low monthly payments towards the installments of the new loan. Thus, all of your various payments are now brought under the new loan. An advantage is that you can replace your high interest rate payments by the new loan of lower rate of interest, resulting in lowering of the monthly outgoings. You also are no longer worried about missing the payments.
Unsecured debt consolidation loan is given without providing any property for collateral, enabling both tenants and homeowners to borrow the required finance. Keeping in view the amount of past loans and your repayment ability, you will be approved anywhere from £5000 to £25000. These are short -term loans, with repayment duration of 5 to 15 years. Interest rate goes a little higher in the absence of collateral.
In order to avail the loan at lower rate of interest, as compared to the rate on your existing loans, you must compare different lenders. Apply for the rate quotes to have a look at the existing rates in the market. But while comparing the rates, you must take your circumstances into account.
If you have a bad credit history of making late payments, defaulting on payments, having arrears or CCJs, then the rate will be higher. Search for the lenders who are providing these loans for your circumstances. It is advisable to apply for the loan with improved rating after making timely payments towards old loans for few months. This way, you can find a suitable deal under unsecured debt consolidation loan. Repay the loan on time for escaping any debt.