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They can be cheaper: In some cases, the interest on your loan may be less than what you’re paying on your existing debt. This isn’t always the case though, so double check before applying.
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They can improve your credit score: having one larger debt, instead of several, can have a positive affect on your credit score. Consistently meeting the monthly repayments of your loan can have an even bigger impact, as it shows that you’re a responsible borrower.
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They can be easier to manage: dealing with debt spread over several credit cards can be confusing. Consolidating them into one monthly payment can help simplify your finances.
How does a debt consolidation loan work?
Add up your debts
Choose a lender
Pay off your loan
Is a debt consolidation loan right for me?
If you have debt spread over several accounts, then a debt consolidation loan could work for you.
But they do come with drawbacks, so it’s important to consider the pros and cons before taking one out.
To help you decide, here are some things to think about:
You might also be interested in:
What else do I need to know before comparing loans?
Before comparing quotes, think about:
APR
Applications include hard credit checks
Term can impact interest
Expert guides
See all loans guidesConfused.com’s loan solution is offered by Monevo Limited. Monevo Limited (Monevo) acts as a credit broker not a lender. Monevo Limited (Monevo) is an Appointed Representative of Quint Group Limited (Quint), and is entered on the Financial Services Register under reference number: 723672. Quint is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference number: 669450. Monevo is registered in England and Wales (Company number 06511345). Registered office: Glasshouse, Alderley Park, Nether Alderley, Cheshire, SK10 4ZE. Licensed by the Information Commissioners Office, (Registration number Z1498441).