Debt Consolidation Mortgage

By:www.adverse-mortgage-centre.co.uk

If you are looking for a mortgage or remortgage to consolidate your debts this section of the site may well help. Here you will find links to our debt consolidation mortgage articles which explain the facts you need to know before making any kind of decision about which mortgage is best for you.

Let's start with the basics of debt consolidation

Debt consolidation is where a person takes all their debt and combines it into one consolidated amount - usually in the form of a loan. This is called a debt consolidation loan. A debt consolidation loan is made specifically to consolidate all your unsecured debt into one easy-to-manage monthly payment. The basic idea is that you take out just one large loan, and use this to repay all your existing debts and loans etc, leaving you with just one monthly repayment to one loan company.

You may be interested in debt consolidation if any of the following applies to you:

• You would like to consolidate a number of debts into one monthly affordable payment

• You would like to reduce your monthly outgoings

• You currently pay variable interest rates and would prefer one manageable rate

• You struggle to meet all your existing monthly debt payments

Debt consolidation is increasing. It is becoming more popular as way out of spiralling expenditure. Often, the amount you need to pay for the consolidation loan is far less than the monthly amounts you would pay to all the debts separately. But, you will pay back more in the long run.

Debt consolidation can reduce interest which in turn can reduce your debt considerably. It may be that a debt consolidation loan is cheaper in interest than one or more of your existing payments. It may also be cheaper than the combined payments you are currently making. Debt consolidation can also over time improve your credit rating. Because you pay your debt off on time each month, if you have poor credit, your credit history can start to improve quickly. After a certain time period, old arrears will disappear, making it easier for you to obtain credit in the future.

A debt consolidation loan can be secured or unsecured. Secured debt consolidation loans secure the borrowing against security - usually your home. This makes them less risky for the lender and you can borrow more or pay a lower interest rate.

Unsecured debt consolidation loans are basically personal loans, and usually offer lower total sums available for borrowing, but at least they are not secured against your property.

Debt consolidation loans are dependent on your credit rating, but are still available if you have bad credit, and can of course be used to repay and consolidate credit cards as well as loans.