What is a Consolidation Loan? – Getting a fresh start

Join us as we discuss some of the benefits of consolidating debt

Consolidating debt is the process of combining a number of existing debts into one loan. This allows you to concentrate on paying a single, monthly payment to one single lender, as opposed to several repayments to different lenders. This can help reduce stress, while also potentially saving you money in the long run. Join us as we discuss some of the benefits of consolidating debt.

  • It’s simple to consolidate

    Luckily, it’s simple to consolidate debt. The first step would be to calculate how much existing debt you currently have with your existing lenders. Once you have worked out the figure, you would then simply apply for a loan for that amount.

  • Clear existing debt

    By taking out a consolidation loan and using the money to pay off existing debts, you are making the process of clearing existing debt simpler and more effective. This can help to relieve any built-up financial stress that you may be holding onto. It will come as a relief to know that once you reach the end of your new loan term, your debt will finally be clear.

  • Pay less interest

    You could end up paying less interest on your loan repayment. For instance, if you have three different outstanding debts to pay, each with a varying and high interest rates, you could immediately clear these debts off and focus on a single loan, this time with a smaller interest rate. As a result, you could end up saving money on interest repayments in the long run.

  • Improve your credit score

    Consolidating your debt can help you to improve your credit score, as clearing your debts helps to reduce your credit utilisation rate. This could put you in a better position if you found that you needed to seek credit in the future.

Creating a brighter financial future

Preparing for your financial future is important, as unexpected costs can occur for all of us. This may mean that you need to turn to credit to help you meet these costs. This can help you to remain financially resilient throughout your service career and beyond. You can learn more about accessing affordable credit with Serve and Protect CU today via: www.serveandprotectcu.co.uk/borrow/

  • The information provided in this article is for guidance and educational purposes only. Police Credit Union Ltd. does not offer regulated financial advice. Please seek independent financial advice.

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