Debt Consolidation

What is Debt Consolidation?

Debt Consolidation is a debt solution designed to simplify multiple debt repayments, and it can, under some circumstances, save you money. The process involves taking out a new loan with the lowest interest rate possible, to pay off multiple, smaller debts.

The purpose of Debt Consolidation is to consolidate all your debt into one loan, and to obtain a reduced instalment that is paid to one creditor. Debt Consolidation can also help you save on service fees, administration charges, debit order charges and insurance costs which will be reduced because you will only be paying one account.

How do I know if I need Debt Consolidation?

Debt Consolidation applies to anyone with multiple credit agreements, who is looking to take control of their financial situation by simplifying their debt repayments.

There are a few common indicators that Debt Consolidation may be the correct solution for you:

  • You are not sure which Credit Providers you are paying every month.
  • You are unable to keep track of your monthly expenditure.
  • You are taking out loans to settle existing debt.
  • The majority of your income is being used to service debt.

What kind of consolidation loans are there?

  • Home Loans– If you have an existing home loan, you can use it to consolidate your debt. This is a good option because home loans typically have a much lower interest rate than short term loans or retail store cards, making it possible to consolidate your debt with a much lower interest rate.
  • Personal Loans– You can also consolidate your debt with a personal loan. The interest rate that you receive on this type of loan will depend on your credit score. This option is best suited for non-homeowners. Although most banks will not list consolidation as a service or product on offer, proper planning and expert advice will aid you in using a personal loan for your debt consolidation strategy.
  • Secured loans– This option allows you to secure the loan by attaching an asset to it. Attaching an asset to a loan reduces the risk to the lender and therefore allows them to give you a lower interest rate. You can attach big ticket items to the loan such as your house or car. It is important to ensure that you are able to pay back the loan as your assets will be at risk of being repossessed if you default on your payments.

How do I apply for Debt Consolidation?

The minimum criteria for Debt Consolidation is a clear credit record and no existing arrears on debt repayments. Applying for Debt Consolidation is a simple process.

You can call DebtBusters on 086 999 0606 to speak to a debt consolidation loan expert who will be able to guide you through the process of securing a Debt Consolidation loan.

Take control of your life by using our reliable and helpful debt counselling services today