FAQ Debt Consolidation

  1. How Can You Consolidate Debts?

You are able to consolidate debts with a debt consolidation loan ort you are able to sign up to a debt consolidation management company that offers this service.

  1. What is a debt Consolidation Loan?

This is a low interest loan that you are able to use to pay off your existing debts.

  1. What is a Secured Consolidation Loan?

This is where the loan is taken against collateral like a house. The collateral secures the loan and if you fail to pay the collateral is seized by the lender and sold to recover the money.

  1. What is an Unsecured Debt Consolidation Loan?

This loan will not require any collateral.

  1. An Unsecured or a Secured debt Consolidation Loan?

The collateral will generally lower the interest on a secured loan, which means that your monthly repayments are lowered. A secured loan is then preferable as it is easier to pay off, but the condition is that if you are unable to pay then the collateral can be seized.

  1. Is a Home Equity Line of Credit worth Considering as a Debt Consolidation Loan?

This is worth considering if you have enough equity in your home. The more equity that you have then the less interest you will have to pay and the more that you can borrow.

  1. Do I Need to be a Homeowner to Consolidate my Debts?

This is not necessary. You are able to take an unsecured consolidation loan if you do not own property. This will have a higher interest rate though.

  1. Is a Debt Consolidation Loan Different than a Debt Consolidation Mortgage?

A debt consolidation mortgage will allow you to take out a new mortgage to pay off other debts. You are then left with just the one mortgage payment. A debt consolidation loan can pay off your debts.

  1. Do Debt Consolidation Services Charge Fees?

A debt consolidation program will require you to pay some fees.

  1. How Can Debt Consolidation Simplify my Monthly Payments?

With debt consolidation, your various debts are replaced with just one debt. This new debt will usually have a fixed low interest rate and a longer repayment period. You monthly payable amount is reduced and becomes one single fixed payment.


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