Consolidate expensive debt to reduce interest, lower payments & stop late fees

Access the money tied in your home to get great consolidation loan rate from leading UK lenders

Pay off credit and store cards, clear your overdraft and finish off those hire purchase agreements with a debt consolidation loan

Do you have store card debt, a hire purchase agreement or outstanding credit card balances? If you do, the chances are that you are paying a high rate of interest on your borrowing.

If you want to clear your debt and reduce the amount of interest that you are paying, a debt consolidation loan could be the answer. Here, we look at the extortionate interest rates you could be paying on your unsecured borrowing and why you should consider a debt consolidation loan.

You’re paying high interest rates on cards and hire purchase agreements

Credit cards, store cards, overdrafts and hire purchase agreements often attract high rates of interest.

The Daily Telegraph recently reported that store cards ‘come with very high interest rates.’ According to the Finance and Leasing Association, there are 13 million accounts of this type in the UK, with about two thirds of the major store cards charging more than 25 per cent interest.

The newspaper reported that if you made £500 worth of purchases on a Burtons, Homebase or Dorothy Perkins store card at 29.9 per cent APR you would rack up £74 in interest in just 12 months.

A 2012 report from the Bank of England also found that the average interest rate being charged on credit cards in the UK is 17.3 per cent – the highest figure for 11 years. They also found that the average lending rate on overdrafts is 19.5 per cent, the highest figure since records began in 1995.

So, if you have store card, overdraft or credit card debt, the chances are that you are paying an extremely high interest rate. That’s why a debt consolidation loan could be ideal, as we see next.

Debt consolidation loans can help you save money and simplify your finances

A debt consolidation loan allows you to borrow a lump sum in order that you can repay all your credit card, overdraft, personal loan, hire purchase and store card debts. Instead of lots of smaller debts, you have one larger loan with a single monthly payment.

There are two reasons why a debt consolidation loan can help you if you are paying lots of expensive cards and loans. Firstly, the interest rates charged on a debt consolidation loan are typically lower than on other types of borrowing. This means that you pay less interest, allowing you to reduce your debt more quickly.

In addition, you will often find that one payment to a debt consolidation loan will be lower than the multiple payments you make to your various creditors.

Many debt consolidation loans are arranged on a ‘secured’ basis. This means that a lender will take a legal charge against your home as security for the loan. As the lender has your property as security, they can lend to you at a lower interest rate, saving you money in the process.

Secondly, a debt consolidation loan can help you to simplify your finances. Rather than having to make a number of different payments every month to various cards, loans and hire purchase agreements, a debt consolidation loan means you make just one payment every month.

You don’t have to deal with multiple companies when changing your bank details or if you’re looking for information. You simply make one payment to one company every month.

So, if you’re paying high rates of interest to various lenders, why not consider simplifying your finances and reducing your payments with a debt consolidation loan?

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