Debt Consolidation Personal Loans

Debts can be a major source of concern for many people. A survey for Bradford & Bingley reported that more than a third of people start the New year with a plan to reduce debts, and half the people polled planned to reduce spending. Reducing spending is all very well, but unless you can manage your debt it sometimes doesn't help enough.

Types of debt

Most people have unstructured debt, which means:

• store cards
• credit cards
• overdrafts.

Structured debt on the other hand, is debt with a fixed programme of repayment, which has an end date after which the debt balance will be zero. This is the principle on which loans work.

Consolidating debts with a personal loan

Consolidating unstructured debt such as cards, overdrafts etc into one personal loan may be a wise move in many circumstances. A debt consolidation personal loan can save you money on your current monthly outgoings, by reducing your monthly payments into one amount which is manageable. At the same time, having a loan which is repaid each month, and which gradually reduces in balance, may often give you the discipline you need to eventually eliminate the debts altogether.

There are some disadvantages, because what may happen is that the loan needs to be over a longer term, so you will probably end up paying more in the long run. But given that many people who have unconsolidated unstructured debts never end up paying off store and credit cards anyway, it can still be the best solution. It also offers a clear endpoint to the situation - a point in time when you know your debts will be cleared in full.

Shop around

An investigation by the Office of Fair Trading between June 2003 and March 2004 suggested that many borrowers failed to shop around for debt consolidation personal loans, which is why Explore Finance can help. We are one of the UK's largest independent loans brokerages, so we can access many different loans on your behalf, to give you maximum choice. Our brokers aim to call you back as soon as possible - same day if you call during working hours. Apply now for a quote and you could even have your debt consolidation personal loan agreed in principle within one working day!