Is It The Right Time To Consolidate?

Being in debt is not very pleasant, and an alarming number of people have huge levels of debt to deal with, leaving them struggling to keep up with payments on other things such as bills, and making it difficult for them to stretch their finances as far as they need to. The problem has become far worse over recent months, as household finances have become increasingly strained due to higher bills and increased living costs, all of which have impacted on affordability for consumers.

For some people the thought of consolidating their debts can be quite tempting, and this can be a very effective solution to help ease your debt burden. Apply for a debt consolidation loan and repaying all of your smaller high interest debts.


One of the reasons why so many people decide to opt for a consolidation loan is that they are able to save money on their outgoings, as the monthly repayment on a consolidation loan with a low interest rate could be far lower than the repayment on a collection of higher interest smaller debts, which means lower outgoings. In addition to this many people like the fact that they only have to deal with one repayment rather than several making financial management far easier.

You may be wondering whether now is the time to consider taking out a consolidation loan with the financial markets in the state that they are, and there are a couple of things that you need to bear in mind. Firstly, many lenders are still charging high rates of interest on their loans, even though the Bank of England has cut the base rate recently – not all lenders have passed on this rate cut. Another thing to remember is that the tighter credit conditions that are currently in places mean that you may not necessarily get the loan if your credit is less than perfect.

You can help yourself to get a better rate on interest on your consolidation loan by taking the time to compare different  personal loans from a range of lenders before you take the plunge, and you will find that the interest rates between lenders can vary considerably. The interest rate that you are charged on your loan will determine how much your repayments are, so the lower the rate the better.

Many experts expect the rate of interest to be cut further over the coming few months, and this means that the rates on consolidation loans could also come down depending on which lenders pass the rate cuts on. Waiting a few months could therefore enable you to get the most affordable rates, and you could find yourself with a consolidation loan that offers affordable monthly repayments and is suited to your needs.