If you are thinking about a debt consolidation loan, it is essential that you are aware of any benefits and implications. To see if a debt consolidation loan is right for you, please get in touch with the AllClear Finance team on 0800 048 1762.
Consolidation Cons
1. Risk of More Debt – One of the Consolidation Cons is that you could potentially get into more debt, as it is tempting to spend on the credit card that you have just consolidated. Cut up these cards or keep them for emergencies only.
2. Longer Repayment Period – Although a longer repayment period can be seen as a consolidation pro, it can also be a disadvantage. As you are paying the debt consolidation loan over a longer period, you could end up paying more interest.
3. The Loan is Secured – The loan is secured against your home, so it is essential that you ensure you can afford to make these repayments. There is a chance that you will lose the asset (your home) if you default on the loan.