Debts, such as personal loans and credit card debt, are combined into one unsecured loan.

Easier but more expensive?

The main purpose of unsecured debt consolidation is to make your finances easier to manage. However, whether it is cost-effective will depend on how good a deal is on offer.

While combining unsecured debt into one loan might simplify financial management, it is counterproductive if you end up paying more interest or if the loan works out more expensive because of a longer repayment period or other unfavourable terms and conditions.

A debt consolidation loan secured against your property can offer more favourable terms but we would advise you against this, as your home will be at risk if you miss payments to the debt.

Debt solution?

It's worth bearing in mind that unsecured debt consolidation won't reduce your total debt, even if the interest rate is more favourable. So if you cannot afford the payments on your current loans and credit cards, consolidating your debts is unlikely to provide a cheaper solution for you.

However, there are debt solutions available for all kinds of financial problems. We can work out which is best for your unique set of circumstances through our free, confidential online debt counselling service, CCCS Debt Remedy.