British consumers as a whole owe more than £1 trillion in debt. If any of that number is yours, you may want to look into a Debt Consolidation Loan to help you with your finances. A Debt Consolidation Loan is a loan that combines all debts under one umbrella, allowing a debtor to make one monthly payment that is easier to manage than several simultaneous payments to assorted creditors.

Paying off one loan rather than many has several further advantages. The loan will have one interest rate rather than several, so it makes the ultimate payments required to bring down the loan amount much more predictable than would be the case with many different loans with many different interest rates. The one monthly payment for the new consolidation loan may be lower than the sum of all previous payments you were sending off to lenders each paycheck. By spreading out the term of the debt, a more manageable monthly payment may allow you to cut away at the actual principal owed on the debt, rather than merely making minimum payments on all debts while constantly adding more in interest and increasing the debt. Overall, this should save you money in interest paid on the debt, especially on credit card debts, as long as you do not charge up more cards in the meantime. By responsibly paying off a consolidation loan while acquiring no new debts, your credit score will be improved.

Loans of this type can be secured or unsecured. Secured loans usually include property as collateral. Unsecured loans, held up with nothing of significant value, can result in higher interest rates, lower loan amounts and limited flexibility on what the loan can be used for. Secured loans of this type are more prevalent and much easier to get than unsecured. If you do not have collateral for the loan, someone else (such as a family member) can guarantee the loan with their house as security.