If you have a few outstanding debts, a personal loan from Invest Loans Group could be an option to help you manage your money better, giving you just one simple monthly payment to make.

Debt consolidation loan
Debt Consolidation Loan

Having to cope with multiple debts can make it difficult to manage your cash flow. Debt consolidation streamlines your finances by rolling several debts into a single monthly repayment to one creditor.

What is a debt consolidation loan?

What is a debt consolidation loan?
Debt Consolidation

A debt consolidation loan is a loan that can be used to pay off other debts. It lets you move lots of different debts into one place, which could help you keep track of payments more easily. When you apply for a debt consolidation loan you can ask for enough money to cover debts you have elsewhere. If you’re approved, you can use that money to pay off your debts and even close those other accounts.

As well as consolidating lots of debts into one monthly payment, a debt consolidation loan could also mean that you pay less interest. Taking out a new loan is also an opportunity to look for a loan that has a lower interest rate than you are paying on your other debts.

You may be able to reduce your monthly repayments if you choose to pay the loan back over a longer period of time. This might mean paying more interest overall but could make payments more manageable in the short term. Always check the total amount you will be expected to pay over the loan period before deciding whether to take out a loan or not.

What can I use a debt consolidation loan for?

You can use a debt consolidation loan to pay off a few different types of debt. That might be:

Credit card debts – Credit cards can be expensive for long term borrowing, thanks to high interest rates.

Overdrafts – Overdrawn bank accounts may mean you’re paying high interest rates and a loan could lower those.

Personal loan debts – If you have several different personal loans, a debt consolidation loan can put them all in one place.

Store cards – These can give you discounts at your favourite stores but can have big fees and high interest rates.

How do debt consolidation loans work?

How do debt consolidation loans work?
Debt Consolidation

Debt consolidation loans can be either secured or unsecured loans.

With a secured loan, you have to put up a secured asset, usually, your home or car, which the lender can repossess if you default on the loan.

An unsecured debt consolidation loan requires no secured assets. These loans tend to have a higher interest rate because of the greater risk to the lender.

Once you have chosen which type of loan to apply for, you can work out how much you need to borrow. Start by totalling up your existing debts. This will give you the amount you need to borrow to pay off all of your existing loans with a debt consolidation loan. Then you need to apply for a loan to pay off and consolidate your current debts.

If you are approved, your lender will either pay off your loans for you or give you the money directly so you can make the payments yourself.

Once that is done, you just make your payments on the new loan until it is repaid.

The first step is working how much you owe and how big a loan you need to pay back the debts you have. You can then apply for a debt consolidation loan for that amount. If you’re approved, you can use the money to pay off your existing debts. You then have just one monthly payment for your outstanding debt, which could make your budgeting easier to manage.

Is a debt consolidation loan a good idea?

Whether a debt consolidation loan is a good idea for you or not depends on how much debt you have and what your income is. Some of the benefits of taking out a debt consolidation loan include:

Simpler payments – By putting all of your debts in one place, you can choose to make one monthly payment. This can make budgeting simpler and payments easier to keep track of.

Lower monthly payments – If you have high interest rates on your existing loans or they are over a short period of time, you could lower your monthly payments with a debt consolation loan.

Debt is easier to keep track of – When you don’t have to juggle lots of different debt repayments, it can be easier to see exactly how much you owe and how quickly you’re paying it off. However, the repayment term for some of the existing debts could be extended and you might pay more interest over time.

A potential payment break – If you apply for a Invest-loans Group Debt Consolidation Loan you can also apply for a payment break which, if approved, may mean you don’t have to start paying your loan back for up to two months. Interest will still accrue during that time.

Successfully paying off a debt consolidation loan can also help boost your credit score. That said, if you don’t meet your payments every month, you may end up damaging your score.

How long will it take to get my money for a debt consolidation loan?

The initial application is online, so that will only take minutes. Once we get your information, we will take some time to review it and go through the details with you. We do this to make sure we get things right. If you get final approval and accept the loan offer we will transfer the money to you within agreed timescales.

How will a debt consolidation loan affect my credit score?

How will a debt consolidation loan affect my credit score?

That depends. If you use the loan to consolidate all of your debts, make your payments on time and clear your debts, it could help your credit score. If you miss payments, pay late or break the terms of the loan agreement, it could hurt your credit.

Can I get a debt consolidation loan with bad credit?

It may be more difficult to get a loan if you have bad credit, but you may still be able to take out a debt consolidation loan even if you have a poor credit score.

Some lenders are more likely to offer you a debt consolidation loan if it’s secured against something, like your house. At Invest-loans Group we have worked with many people who have bad credit but still want to consolidate their debts.

Our lending process also uses soft search for the initial application, so you can apply for a loan today using our online application process, and it will not affect your credit. Once you have made your application, we can get you a conditional decision and, if you are approved, make an appointment for you to speak with one of our team members at your nearest branch. We only conduct a hard credit search if you accept a loan offer.

Why choose Invest-loans Group for a debt consolidation loan?

  • We’ll give you an instant decision when you apply online.
  • If you’re eligible and you apply online, you could get the loan transferred to your account by the next day if approved, by digitally signing.
  • You may be eligible to take a two-month payment break at the start of your loan. Please note, interest will accrue during the payment break and your loan term will be extended by 2 months.
  • You can choose which day of the month you’ll make your fixed monthly payment.
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