Debt consolidation can be a good way to turn a seemingly overwhelming amount of debt into a more manageable single repayment.
This is a form of debt refinancing that entails taking out one loan to pay off many others.
Simply Loans can help consolidate your current debts in to one easy to manage repayment.
It is important to not climb back into more debt after a debt consolidation loan has been organised for you as this is an easy way to get back into trouble.
The Debt Consolidation Process
The bulk of your debt, especially that with a high interest, is repaid by a new loan. Most debt consolidation loans are offered from lending institutions and don’t always require security, but you can get a much better interest rate if you have a vehicle or property to offer as security for the debt consolidation.
The overall lower interest rate is an advantage of the debt consolidation loan offers consumers. Lenders have fixed costs to process payments and repayment can spread out over a larger period. However, such loans have costs: fees & interest.
Because they are secured, a lender can attempt to seize property if the borrower goes into default.
Personal loans comprise another form of debt consolidation loan. Individuals can issue debtors a personal loan that satisfies the outstanding debt and creates a new one on their own terms. These loans, often unsecured, are based on the personal relationship rather than collateral.
Your Simply Loans broker can help explain this further.
Combine (a number of things) into a single more effective or coherent whole
A thing deposited or pledged as a guarantee of the fulfilment of an undertaking or the repayment of a loan, to be forfeited in case of default
A sum of money that is owed or due.