The basic idea is that you use debt consolidation loans to clear other more expensive debts before you incur additional charges and interest.

You can usually use them to clear multiple credit cards, loans and overdrafts and move them to a single loan with a single provider.

So providing you find a low interest debt consolidation loan, they can prove a useful tool in both cutting the interest rate you pay and the number of monthly payments that you have to deal with.

When you're consolidating loans you'll need to specify the amount you need to borrow and the number of months you choose to spread your loan repayments over.

It's best to spread your borrowing over as short a period as you can comfortably afford as this will minimise the amount you'll pay in interest overall.

If you spread your consolidation loan payments over a longer period than your current debts are scheduled to run over, clearing the balance could actually cost you more in the long run.

Unsecured consolidation loans are generally preferable as they do not require you to put up your home as security for the lender as a guarantee that you will meet your repayment. Of course, they're also more widely available as you can apply even if you don't have property in your name.

However, if you have a reasonable credit rating then it's worth looking at whether a 0% balance transfer credit card could provide a cheaper and more flexible solution.

These would enable you to repay your loans as and when you had the money available and, other than a balance transfer fee of around 2 - 3%, won't charge you any interest for a certain number of months.

You will need to be confident that you could either repay your debt in its entirety by the end of the 0% balance transfer offer or be willing to make another balance transfer in order for this to be a workable option. If you don't do this you could end up paying out a significant amount in interest repayments.

The problem that many people find is that getting into debt is a vicious circle. The more debt you get into, the harder it is to get a loan to pay off these debts.

However, with a debt consolidation loan bad credit is not always a prohibitive factor as you should still be able to borrow through this channel.

Guarantor debt consolidation loans are available and secured debt consolidation loans are always an option if you're not eligible for unsecured loans. However, this would mean your home would be at risk if you couldn't keep up with the repayments.

Loans for debt consolidation can be a useful way to merge multiple expensive debts into a single cheaper loan. However, this is only the case if you compare your options and choose the loan that works out cheapest for your individual circumstances.

There is plenty of choice when it comes to getting an unsecured consolidation loan and the best way of analysing your options is to compare the various options, their benefits and their terms and conditions.

Being in debt can be difficult whether it is a debt of your own causing or otherwise. And, if you're really struggling with your repayments, then taking out a debt consolidation loan may not necessarily be the best course of action.

If you're unable to keep up with your current debt repayments then getting debt advice from a not-for-profit organisations that provides assistance and support for individuals struggling with significant debt is likely to be a better option.

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