Can I consolidate my debts in Northern Ireland?

Debt consolidation involves combining a number of separate forms of borrowing – such as loans, credit cards, and overdrafts – into one loan.

Depending on your situation, debt consolidation can offer a number of benefits including:

• Only one single payment to manage
• May be able to secure a lower rate of interest
• All borrowing will be cleared at the same time

While this can be a great option in the right circumstances, debt consolidation is not appropriate for every situation.

You should only look to consolidate your debts if you are sure you will not be tempted to accumulate more borrowing. When you consolidate your debts, you effectively free up space on your existing credit cards and overdraft accounts, as these will be cleared by the new consolidation loan. You should make it a priority not to spend on these cards as this will only make your debt problems worse.

It is always advisable for you to close down these old accounts following a process of debt consolidation so that you are not tempted to continue to use them. While debt consolidation can be beneficial, you must make sure you do not make your debt problem worse by adding yet another form of borrowing onto your existing debts.

Even if you believe debt consolidation is the right route for you, you may find it tricky to obtain a consolidation loan particularly if your credit rating has suffered due to your existing debt problems. If you have missed payments on your existing debt obligations and have fallen into arrears or maybe even obtained a default marker, lenders may not be open to giving you a loan to consolidate your debts.

Before taking out a debt consolidation loan, you should ensure you know exactly how much you will be paying and how this compares to your current borrowing. Just because your monthly payment may be less, does not necessarily mean that this is the cheapest option when it comes to repaying your debts.

Depending on how many years you take out the consolidation loan for, plus the interest rate attached to the loan, you could find yourself paying back more than you would if you continued to pay your existing individual debts without consolidating them.

If you are experiencing debt problems and need some advice as to whether a debt consolidation loan could be right for you and your circumstances, speak to the experts at Northern Ireland Debt Solutions. Our team, based in the heart of Belfast, are here to give you the help and guidance you need when navigating your debt solution options.

We can assess whether a consolidation loan is appropriate, and if not, talk you through more suitable options for solving your debt worries. Take the first step by speaking to the Northern Ireland Debt Solutions team today.