If you are struggling with your debt and looking for a way to make your monthly payment easier to manage, both a Debt Consolidation Loan and a Debt Management Plan can do just that.
Both leave you with one low monthly payment. This is a great benefit if you struggle making multiple payments to multiple creditors.
Both of these debt solutions offer a similar promise - you make one payment which will cover all your unsecured debt. But they do it in very different ways:
Debt Consolidation Loan - A Debt Consolidation loan is a loan that you take out to pay off all your other debts. Once they have been cleared, you are left with only the one loan payment to make. Debt Consolidation Loans are often secured against your home, meaning that this type of debt consolidation will offer you a lower interest rate.
Debt Management Plan - This is a repayment plan where a debt management company, like AllClear Finance, will negotiate with your creditors to offer you a lower payment. No matter how many creditors you have or how much debt you owe, all you need to do is make one payment to us which we will distribute between your creditors. You don't take out any further credit with a debt management plan.
It would be impossible to say which debt solution is right for you without taking a look at your finances first. Please get in touch with one of our expert debt advisors on 0808 131 0038.
Remember that you should never take a debt consolidation loan out if you feel as though you may struggle meeting repayments.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERM OF DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
For mortgages and re-mortgages the overall cost for comparison is 5.5% APR variable and for secured loans 14.5% APR variable. The actual rate will depend upon your circumstances. Ask for a personalised illustration. A broker fee may be payable on completion, and will depend on your circumstances. For mortgages and re-mortgages this fee is typically between 0% and 3% of the gross mortgage amount, subject to a minimum of £2,495 and a maximum of £3,995. For secured loans, the fee is typically between 0% and 10% of the loan value.