If you are looking at lenders who arrange debt consolidation loans you probably have credit problems. If you are a homeowner, one solution could be mortgage refinancing.
Consumers who use debt consolidation loans secured on their homes are mortgage refinancing. The idea is to reduce your monthly payments and secure a lower interest rate by having all your debts, outstanding credit card balances and loans consolidated into one easy to manage loan with a better rate.
You should always think very carefully before deciding to use any value you may have in your property to borrow additional funds to pay off debts that may have built up through every day living expenses.
Remortgaging your home for debt consolidation is a short term solution to save money on interest payments from expensive credit cards and personal loans. Think carefully before securing other debts against your home.
If you do decide to refinance your mortgage it is important to prioritise what debts to pay off first.
Debt consolidation loans - Which debts to pay off first
The money raised for debt consolidation by remortgaging should be used to pay important debts first. You will need to be clear on which debts will have the worst consequences if not paid off quickly. For example you might lose your home, your possessions, and even be sent to prison.
It is also good to know which debts are costing you the most in interest payments, this will help you identify priority debts.