Under pressure to consolidate?

One debt solution that maybe available to people facing a serious debt problem is a consolidation loan. But is a consolidation loan the right solution for you?

Debt Pressure

Knowing that you have to maintain your debt repayments each month can create immense stress, especially if you're under financial pressure.

When this happens, the priority must be to try and strategically reduce the cost of your debts. Sometimes, this can be achieved through a Consolidation Loan.

A Consolidation Loan can be a very practical solution. When used properly, it will restructure your existing unsecured debts into a single, easy to manage loan with a lower monthly repayment.

When to consolidate

Knowing when to opt for consolidation is really important because, contrary to what you might think, it isn't always the right thing to do.

The principle of reducing your debt costs is sound, and will have a major impact on make your ability to keep within your budget. But the determining factor as to whether a Consolidation Loan is the right course of action will be found by looking deeper into the background of the debt that needs consolidating.

If the debt you're looking to consolidate consists of normal household expenses, such as food bills, clothing costs and travel expenses, then consolidating might not actually solve the underlying problems.

Consolidating these types of debt might only provide a temporary respite, rather than solving the underlying problem.

Recognising the warning signs

By consolidating your debt, you will free up all the credit limits on your cards. If you have an underlying financial problem, it will only be a matter of time before all the cards are maxed out again and you're back looking to consolidate.

Take time to evaluate your position by looking at what you're credit is being used for. If it is being used on everyday items and necessities, then your budget might be permanently running at a negative balance and consolidation might not be the answer.

It's prudent to consider your circumstances clearly before you automatically assume a consolidation loan will make everything better again.

It may be that you should be looking at a none borrowing option. One that will still reduce your monthly expenditure, but one that doesn't require you to borrow anymore money.

One such solution is the IVA debt solution. An IVA will provide all the benefits of a consolidation loan, whilst potentially giving you a realistic chance to write-off some of the debt you already have.

Read this article for more information relating to the differences between an IVA and a Consolidation Loan.

Consider your options

Don't be pressured into taking action without giving it serious thought. If you believe you might have an underlying financial problem, then you should speak to a professional debt adviser as soon as possible.

With our guidance you may be able to make the necessary changes that will get your finances back on track. If there is a problem, we'll find it, help you identify where the problem is and, most importantly, how to solve it.

So, if you think you would like to talk to an adviser, simply call 0800 088 7503, or complete this form and someone will call you back at your preferred time.

Ask for Help

Key Information
  • We only use your personal data for the purpose for which you provided it.
  • We only share select data with external parties where it is necessary in relation to the services that you have requested we carry out on your behalf, and we'll always ask for your consent beforehand, or if we are required to do so by law.
  • You can always get in touch to ask us what personal data we hold and to correct and update your data if anything changes. For an overview of your rights check out our Privacy Policy.
  • By checking the “Agreement and Consent” box you agree and give your consent for us to use your information for the purpose described.

In accordance with the Financial Conduct Authority's guidance, please follow this link if you would like to read a free guide about In Debt - Dealing with your creditors
To find out more about managing your money and getting free debt advice, visit Money Advice Service , an independent service set up to help people manage their money.

'www.my-iva-adviser.co.uk' is a trading styles of IVAorg CIC. Company Number: 08560305 | Data protection registered ZA033231
IVAorg CIC is authorised and regulated by the Financial Conduct Authority (FCA) | Firm Reference Number (FRN) 684439