What Are Debt Consolidation Loans And What Can They Save Me?
Many people have heard of the words debt consoldation and debt consoldation loans, but are not fully aware of their meaning. By looking at the words individually the meaning becomes obvious.
As is obvious, loans refer to the borrowing of money to which interest is normally added, unless you are one of the lucky few who can obtain an interest free loan from a freind or family member.
Debt also suggests money that is owed.
Consolidation means the combining and uniting of a number of separate objects into the one. When we put the words debt consolidation loans together it becomes apparent that the term means rolling different pieces of loans and debts into the one. The debt referred to are personal loans, hire purchase, credit cards, etc.
Debt consolidation not only saves money but also makes finances easier to handle.
When someone has a number of debts it can become difficult to remember the dates of the month when payment must be made, and late payments can incur penalties and affect a person's credit rating.
Whether debt is paid by direct debit, cheque or debit card, bank charges are levied which costs even more money.
Therfore it makes sound monetary sense and saves a lot of trouble by combining all debts into a single payment, that is by arranging debt consolidation.
The best way for homeowners to arrange debt consolidation is by arranging a secured loan or a remortgage which are both low interest loans that can be used to pay off all outstanding financial outgoings.
Remortgages have interest rates starting at under 2% for tracker deals, while fixed rates for homeowners with good equity start at under 3%. Secured loans are currently available from 7.9% from Nemo & Link Loans for homeowners with 60% LTV.
It is impossible to say exactly how much any indivual can save by debt consolidation as it depends on many factors such as the amount of equity on the property, the interest rates of the debts being repaid, the credit rating of the borrower and whether the applicant is employed or self employed. The repayment preiod can also alter the interest rate charged by the secured loan and mortgage provider.
However anyone with a number of credit cards and loans will save a lot of money each month by paying off the extremely high interest credit cards with a low interest secured loan or remortgage.
About the Author
Champion Finance have been arranging secured loans for all purposes including debt consolidation since 1985. They also provide whole of the market mortgages and remortgages. Debt help, debt advice and all other debt solutions are also available. http://www.championfinance.com
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