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You qualify for two types of loan. Select either:

	Homeowner Loan Is secured on your home. Rates depend on your circumstances; usually lower than an unsecured loan and often more flexible.
	Unsecured Loan Not secured on your home. May not qualify you for the best rates. Applying to a number of lenders may affect your credit score.

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Based on your information we recommend you speak to a personal debt adviser.

They will offer you advice on:

Whether a loan is your best option
Consolidating your debts
Reducing the amount you owe
How to freeze your interest payments
Protecting you from creditors

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When Is A Consolidation Loan Not A Good Idea

Consolidation loans have been highly publicised over the last year or so. Seen as the number one way to end your debt worries, thousands of people are applying for them each year. But are they really the best way to end all of your debt worries? Well, technically no.

Why Consolidation Loans Are Not Always A Good Idea

If you take on a consolidation loan thinking that it will get you out of debt, you are seriously mistaken. Yes, it will pay off your existing debts, but it is replacing them with another one. Many people do not take that into account and they just see the advertisements that make these loans look ideal. They can be helpful, there is no denying that, but they do not get you out of debt. In fact if anything, they get you into more debt.

The advantages of a consolidation loan are that they help you to feel less trapped. They give you a little more financial freedom and they help to give you part of your life back. However, it is still debt and because the repayments are usually lower, it means that the term of the loan is actually longer than your others were. So, you will be in debt a lot longer than you originally planned and that can affect all kinds of decisions.

Things, such as a mortgage, may be a lot harder to achieve if you do have a long-term loan. So you need to consider that before you rush out and apply for one.

On the upside, however, if you already own your own home, a consolidation loan may be an option for you. After all, you do not need to think about getting a mortgage as you already have one. You may even be able to get a better priced consolidation loan as you are a homeowner and you can get it secured on your home. Tenants tend to get higher priced interest rates because the loan is not guaranteed to be paid back. So that is just one advantage.

Though consolidation loans do need to be given some thought, they are not quick fixes and they will not rid you of your debt problems. On the other hand, they can really help you out if you have done your research and you do know what you are letting yourself in for. You just need to research various companies in order to see which ones have the best interest rates. It is all about comparing and with hundreds of consolidation loan companies within the UK, you are bound to find one to suit you.

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This article was written by Derek Rogers on 1st February 2007.

2008-05-18