Consolidating debt on

20-Sep-2019 02:22

consolidating debt on-37

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Another way that consolidation can cut your monthly outgoings is by letting you extend the repayment period.

With most borrowing the longer you take to repay the more interest you'll pay, although for some people reducing their repayments is worth it.

Not only that, it should make managing your deficit easier because you'll only have one monthly repayment to think about.

That can help you avoid missing payments, which is vital to obtaining good credit scores and qualifying for the best financial deals.

For example, let's say you owe £10,000 which you consolidate into a loan at 6% APR (that's the annual percentage rate), with repayments lasting for five years.If you have debt and savings it's almost always the case that you're paying a higher rate of interest on the money you owe than you're getting paid on the money you're in credit.It's always a good idea to have an emergency savings pot topped up to a level you're comfortable with, but beyond that it's worth thinking about using your savings to repay debt.More difficult to deal with are the intangible factors which are related to knowing what sort of borrower you are.

Lumping all your debt into one place (perhaps secured against your home) and having lower monthly repayments could tempt you to take on additional short-term borrowing, building your overall deficits into a fiscal time-bomb. FAQ-bg:hover .indicator::before .indicator.opened::before #content .hero-background .hero-background img #navigation #hero-cover #hero-cover p #step_three_error,#step_two_error .clear .home_step_content .next,.home_step_content .next_incomplete .home_step_content .