Tidy your finances with a debt consolidation loan

Taking your debts and bringing them all together into one loan could be a great way of managing your money.

• Debt consolidation
  
  If you refinance existing debts the rate of interest on your new loan may be higher or lower than the rate of interest on your original debt.
  
  If the new borrowing that you plan to consolidate your debts to has a lower interest rate you could reduce the overall amount you have to pay back. However if your new loan has a higher rate of interest than your original debt or your repayments are over a longer term, you may pay more interest overall.
  
  Bear in mind that if you settle your loan early or refinance an existing loan, up to 58 days interest will be added when we calculate the amount needed..

• One fixed monthly repayment
  
  Instead of trying to manage multiple repayments to credit cards, store cards, loans and overdrafts on different dates, you can tidy everything up into one affordable repayment. With a fixed rate your repayments will always stay the same. Remember, you may have to pay a settlement fee on your existing borrowing.

• Reduce your repayments
  
  You could reduce your monthly repayments by increasing your loan term, although you may pay more interest overall.

We've pulled together a few tips that could help you on your way to clearing your debts.

The best place to start is to use a budget planner. This could help you better understand what's coming in and going out so you can see how much you can afford to pay off each month.

Try looking through your statements, bills and shopping receipts before you start, to get a more accurate picture of your spending habits.

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The purpose of taking out a loan for consolidation is to replace your outstanding bills with a single fixed repayment each month.  Calculate exactly what you owe to your lenders - this is the amount you should borrow on your loan for debt consolidation.

If you take out more than you need, you'll end up adding to that debt - meaning you could end up taking longer to pay it off.

If you have savings, you could be better off using these instead of taking out a loan – the interest on a loan may be higher than the interest you earn on your savings.

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Use our budget planner to see where your money is going, and where you could cut back. Are you paying for a gym membership that you don't use? Do you need to cut back on eating out or nights out to save some pennies? Is that must have item really a must have? Once you've set yourself a budget, stick to it.

Personal loans from Halifax are available to existing customers and offer a range of borrowing amounts and repayment terms to suit your budget.

• Loans from £1,000 to £25,000
• Repay your loan over 1 to 7 years
• Fixed repayments to suit your budget
• Online instant loan decision

Use the loan calculator to find out if we've got loan quotes to suit you.

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