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What is Debt Consolidation?

Updated: Feb 5

Having to pay off several debts at once can be stressful, but it’s not uncommon.

Debt consolidation can simplify your financial outgoings and make repaying loans easier. Combining multiple debts into a single consolidated loan can save you time, offer peace of mind as to your financial future, and ultimately lower the amount you have to repay.

If you have multiple credit card debts with multiple providers, chances are you’re making several repayments at different interest rates on different amounts each month. Sound complicated? It certainly can be, and with the high interest rates charged on most credit cards, you might find yourself paying just enough to cover the interest, let alone the actual debt. Consolidating multiple debts into a single new debt can help those struggling to balance their financial obligations by essentially replacing multiple smaller debts with a single loan.

Simply put, debt consolidation is the process of taking out a personal loan with one lender in order to repay pre-existing loans, credit cards, and bills that might be across multiple providers.

Personal loans are usually repaid at regular intervals over a set period, even offering borrowers the freedom to choose the frequency at which repayments are made. In most cases, a personal loan will not only have greater flexibility, but a much lower interest rate than most credit cards. (Consolidating smaller debts into a single larger debt will also usually further lower interest rates).

Plus, with a personal loan, you can choose to keep repayments flexible with a variable interest rate loan, or be sure of when you’ll be debt-free with a fixed interest rate loan.

Contact us on to discuss how we can help you get back on top of your finances.

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