1. Will debt consolidation effect my credit rating?
No, it will not. Taking up a debt consolidation loan will not harm your credit rating in anyway. You will be paying off your unsecured loan and hence it will not have any negative impact on your credit score.
2. Can debt consolidation help me save money?
Yes debt consolidation can help you save some money. You will be paying a lower interest rate.
3. What is the difference between debt consolidation and debt management?
Debt consolidation is a process where the borrower takes up a secured loan to pay off all their existing unsecured loans. Here you only need to make a single monthly repayment to settle your debts. However, debt management does not involve another loan. It is an agreement between the debtor and creditor to settle the debt within a fixed period of time and the amount is repaid monthly.
4. Will debt consolidation be the right option for me?
Debt consolidation loan will only be suitable for you if: (1) you have many creditors, (2) you pay high interest rate, (3) you are unable to pay off on time. Thus, it depends entirely upon your financial status. Please consult a debt advisor to take the right decision. Normally, if your loan amount is less than £15000 you can apply for a debt consolidation loan.
5. I have bad credit problem – will I be eligible for a debt consolidation loan?
If you have a bad credit, the creditors will naturally find it risky to grant you a loan. If you have already missed many payments or have a CCJ then you need to consult an experienced debt advisor. He can help you to get a debt consolidation loan depending on your situation.
6. How much can I obtain as debt consolidation loan?
This completely depends on your present financial circumstances like your income, your total debt and the amount you can afford to pay.
7. What are the general terms of repayment?
Generally, the debt consolidation loan is paid on a monthly basis. But you can have a customized repayment schedule if your creditor approves. A debt consolidation loan is given for a minimum of three years to a maximum of twenty five years.
8. Will the creditors stop harassing me when I take up a debt consolidation loan?
Yes creditors will not be able to harass you when you take up a debt consolidation loan. You can direct any creditor’s call to the debt consolidation loan company who will deal with the matter.
9. What will happen if I fall ill during the tenure of the loan?
If you fall sick your debt consolidation company will take care of it. Generally they provide covers for sickness, accident or unemployment.
However, for any debt consolidation related issues please consult a qualified debt advisor to get a personalized solution
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