Our advice is to be wary of adverts promising ‘best debt consolidation’ as a magic wand to solve all your debt worries.

Consolidation is not a solution

The theory is that debt consolidation makes your life easier because as you swap multiple debts for one large debt, you have just one creditor to worry about and one payment to make each month. In reality though, debt consolidation is often not the best debt solution.

If you are struggling to make the payments to your debts, then consolidating them isn’t going to help you. This is because the overall debt will be no smaller and could even be larger if the interest rate is higher or the payment term is longer. Remember the longer the term, the more you will end up paying back. Always check the terms and conditions of the debt consolidation loan. In particular, find out what the total charge for credit is and the total debt you will need to repay to clear the debt.

Don’t be tempted into taking out a secured debt consolidation loan to get a better interest rate. Secured means that you will have to sell your asset if you fall behind with the loan repayments.

Better debt solutions

If you are having problems dealing with your multiple debts, there are many better solutions available than debt consolidation. We can provide free debt advice and professional counselling to help you find the best answer for your problem.

Our online debt counselling service, CCCS Debt Remedy, will assess your finances and identify the right debt solution for your circumstances.