A debt consolidation loan provides a way for you to merge all of your outstanding unsecured debts (like credit cards, overdrafts and personal loans and store cards) into one single loan debt. It basically takes all of your monthly payments that you are currently paying to different lenders each month and consolidates them into one loan agreement. At Olamoneyco.uk, we offer unsecured personal loans and small loans. The difference between secured and unsecured is that you are not putting up any collateral, in the even you fail to meet your repayments, such as your home or other significant assets.
The chief advantage of a debt consolidation loan is the ability to pay off any outstanding debts you have and combine them all into one, more manageable loan. This means you no longer owe money to more than one lender. Once you’ve repaid your existing debts, you will then make a single monthly payment to one lender in accordance with your new Loan Agreement.
You can still apply for a Consolidation Loan even if you do have a bad credit history. While some Lenders may not accept your Application, we do have some among our Affiliates who will take a serious look at your Application. We specialise in securing loans for people who have an adverse credit file due to missed repayments, CCJ’s or bankruptcy.
How much can I borrow with a consolidation loan?
At Olamoney.co.uk, we will try to secure for you small loans starting from £100 up to larger loans with a maximum of £10000.
Will I be out of debt more quickly with a debt consolidation loan?
Not particularly. If you keep your new loan agreement term in line with your current debt, then it will finish at roughly the same time. However, if you consolidate and can afford to pay a little more into the debt thereby taking it out on a shorter term than your current longest term loan, then yes, it would be repaid more quickly. Of course, it is tempting to go for a longer term and thereby reduce the monthly repayment, making them more manageable, but this strategy does have a major drawback in that it does mean more interest is paid on the loan. Our advice would be to always repay your loans back as quickly as you can manage, especially higher interest loans.
Could debt consolidation loans affect my credit score?
Providing you adhere to your Loan Credit Agreement, then the loan will not have a negative affect upon your Credit Score. Indeed, it may actually have a positive effect if you are meeting all the Conditions of the loan; repaying the correct amount on time. A successfully completed loan will look good on your Credit File because it will show other Lenders that you are a responsible Borrower who can manage your financial commitments.
Will a single debt consolidation loan be cheaper than several small loans?
A good question and the answer really depends upon the interest owed upon your existing debt. If you are able to secure a lower interest rate consolidation loan it could well be cheaper. Especially if you are also able to take it out over a shorter term than your longest term loan. However, when taking out a consolidation loan, you will often find that you are able to spread your payments over a longer term – to make the monthly commitment more manageable.
If you are struggling to repay all of your current loans, then a consolidation loan can save the day in that it can allow you to spread your repayments over a new, longer term and bring your monthly costs down to a level you can actually afford. Remember though, only consider doing this if you truly cannot afford a shorter term – longer terms means more interest paid ultimately.
Can I apply online for a debt consolidation?
Of course, at Olamoney.co.uk you can apply for a Personal Debt Consolidation Loan (or small loans ) via our website using our Application Form. The process is easy and straight-forward, simply follow the instructions on the Form and complete all the required Fields. Note, an asterisk will appear if you have not completed something or completed it incorrectly. If you hover over the asterisk, it will tell you what you need to do in order to complete that particular field.
How do I consolidate several small loans?
This part is easy, you simply take out one larger loan and use it to repay all of your small loans. Only borrow enough to cover your small loans, not more. If you do borrow more, you will have higher repayments which defeats the object of the exercise.
If you are spreading your new larger loan over a longer period, then it may be tempting to increase your overall borrowing (great than the sum of your small loans) but we would advise against this strategy and rather pay off your existing amount owed.