Debt consolidation: How could it save me money?

<h1>Debt consolidation: How could it save me money?</h1>Author: <a title="Pat Dobson" href="http://www.articlesbase.com/authors/pat-dobson/219122.htm">Pat Dobson</a> If you want to turn multiple debts into one manageable debt, then debt consolidation may be right for you. Debt consolidation involves taking out a new loan and using it to repay your existing unsecured debts, which will leave you with one monthly payment to make - and could reduce the monthly cost of servicing your debts. We will now take a look at some of the benefits of debt consolidation: •    If you take out a debt consolidation loan, you can arrange to repay it more slowly than your 'old' debts, which could lower your monthly outgoings. However, the debt would then take longer to repay, and you might repay more overall - due to interest (although this will depend on the interest rate on your original debts and on your debt consolidation loan). •    The interest rate can be lowered, particularly if you are consolidating high-interest debts, such as credit cards or store cards. For example, if your store card has an APR (Annual Percentage Rate) of 29.9%, but the debt consolidation loan's interest rate is 9%, your debt will grow at a slower rate. But is debt consolidation always worthwhile? Debt consolidation may not be the right way for you to address your debts. For example, it may not be the most appropriate debt solution for you if: 1.    You don't have a fixed income; 2.    You're not sure you can afford to repay the debt consolidation loan; 3.    You can't consolidate all your unsecured debts. To find out if a debt consolidation loan would be right for you, you should contact a professional debt adviser.About the Author: To find out if a <a href="http://www.gregorypennington.com/debt-consolidation-loan.asp">debt consolidation</a> loan or an <a href="http://www.gregorypennington.com/individual-voluntary-arrangements.asp">IVA</a> would be right for you, you should contact a <a href="http://www.gregorypennington.com/">debt management</a> specialist.Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/debt-consolidation-articles/debt-consolidation-how-could-it-save-me-money-1008891.html" title="Debt consolidation: How could it save me money?">Debt consolidation: How could it save me money?</a>

If you want to turn multiple debts into one manageable debt, then debt consolidation may be right for you.

Debt consolidation involves taking out a new loan and using it to repay your existing unsecured debts, which will leave you with one monthly payment to make - and could reduce the monthly cost of servicing your debts.

We will now take a look at some of the benefits of debt consolidation:

•   If you take out a debt consolidation loan, you can arrange to repay it more slowly than your 'old' debts, which could lower your monthly outgoings. However, the debt would then take longer to repay, and you might repay more overall - due to interest (although this will depend on the interest rate on your original debts and on your debt consolidation loan).

•   The interest rate can be lowered, particularly if you are consolidating high-interest debts, such as credit cards or store cards. For example, if your store card has an APR (Annual Percentage Rate) of 29.9%, but the debt consolidation loan's interest rate is 9%, your debt will grow at a slower rate.

But is debt consolidation always worthwhile?

Debt consolidation may not be the right way for you to address your debts. For example, it may not be the most appropriate debt solution for you if:

1.   You don't have a fixed income;
2.   You're not sure you can afford to repay the debt consolidation loan;
3.   You can't consolidate all your unsecured debts.

To find out if a debt consolidation loan would be right for you, you should contact a professional debt adviser.

To find out if a debt consolidation loan or an IVA would be right for you, you should contact a debt management specialist.

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Article Tags: Debt Management, Debt, Debt Consolidation

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