Facing debt can be challenging for a lot of us, but there are a lot of new services on offer to help you gain control and shorten the time taken to pay it off.
Key Mortgages can go through the options available for individuals with debt and save you having to do the strenuous research.
A debt consolidation loan can be used to pay off multiple debts in one payment, reducing the total interest that you would be paying on those outstanding debts individually.
You might consider a debt consolidation loan in the following situations…
When you have an appointment scheduled with a lender, we recommend getting organised in advance and preparing the following…
During the application process, the lender will complete a credit check, so giving your score and history a review will be beneficial.
The type of debt consolidation loan you are offered will depend on your credit risk to the lender, this will either be a secured or unsecured loan.
A secured loan might be offered if you have a poor credit history, this will often involve securing an asset against the loan. An unsecured loan will not require you to do this.
If you choose to use your house as an asset, it is important to keep up with repayments to avoid the risk of losing it.
Depending on which method you choose, debt consolidation can either help or hurt your credit score. Introduced to lower debt, your credit utilization ratio can be reduced by consolidating debt which accounts for 30% of your overall credit score.
Lenders will have varying requirements for credit scores which is often in the 600+ range. You can regularly check and monitor your credit score online to see if you meet the minimum needed.
Like most financial services, it’s best to shop around for the best deal. You can use a loan comparison site to weigh up different lenders and what they can offer based on your situation.