Sometimes circumstances change and we should be able to change with them. That's why we've put the following advice together to help you decide if the convenience of a debt consolidation loan is for you.
Present account balances
Before taking out a consolidation loan take a good look at your account balances. How much of your debt could you pay off straightaway? Doing this will reduce any interest owed, the interest you'd earn from savings is less than the interest rates you'd be paying on the balance for most loans.
What are all your outgoings for a month? If you don't know then now's the time to find out. If you know how much you've got coming in and how much is going out, you'll be in a great position to make the most of your money. So sort out your budget before considering another loan.
You need to find out your current credit rating, if you don't already know it. Because this will make a big difference to the type of loan you can take out and how much you'll have to repay, as interest rates fluctuate according to your credit rating.
Rates of existing loans
Compare interest rates between your current loans and your proposed loan. Will you actually be better off? Don't forget to also take into consideration how long the loans are for, because the last thing you want is to end up having to pay more in the long-run.
Benefits of consolidation
The real benefits of a consolidation loan if you've done your homework are one simple bill instead of several, possibly lower rates, and potentially fewer payments.
Dangers of borrowing more than you need
It might sound obvious but the more you borrow, the more you have to pay back. A consolidation loan is here to help you, not make life harder. So do consider your options carefully before making a commitment.