Did you know that the average Brit has £6,936 in debt excluding their mortgages and student loans? We live in a very expensive country and it’s easy to see why, with wages growing so slowly since the crash, more and more of us have turned to credit cards, loans, and overdrafts.
The problem is that we’re paying off all sorts of different debt at different speeds and at different interest rates. It’s not only very confusing to know where we actually stand – it’s even harder to work out if we’re paying more in interest than we need to. Many Brits have come to the conclusion that they are paying too much. What if there was a way to pay down the same level of debt you have now and maybe end up handing over less each month in repayments? There is – it’s a debt consolidation loan.
Here at Loan Broker, our lenders offer debt consolidation loans which don’t require security. That means that, if you can’t keep up repayments on your loan, your home won’t be taken away from you. However, it will mean that getting loans in the future will be much harder. You should only take out a loan if you are convinced that you can comfortably meet each and every repayment on time and in full.
What are the Benefits of a Debt Consolidation Loan?
There are many reasons why you might want to consider taking out a debt consolidation loan, including:
Improved Credit Score
When you pay off your outstanding debts, your credit score improves. The higher your credit score, the more loan providers will be willing to lend money to you in the future. Better still, if you have a high credit score, you will also be offered loans with lower interest rates. This is because it shows the loan provider that you have a track record of paying off your debts.
Take out a debt consolidation loan, meet all the repayments, and when the loan is settled, you may have more choices of finance available to you than you’ve ever had.
Easy to Track your Finances
If you have multiple repayments that you need to make each month, you might find yourself losing track of each of them. With a debt consolidation loan, you will be able to stay on top of your debts by only having a single repayment to think about.
More Affordable Finance
By taking out a debt consolidation loan, you will only have one interest payment that you will need to make. This can make your loans a lot more affordable and manageable each month.
Do you Need a Good Credit Score to Take Out a Debt Consolidation Loan?
As with all forms of unsecured loans, the better your credit score is, the more options you will have to choose from and the less you will have to pay in interest each month. However, it’s important to know that there are many loan providers out there who specialise in providing debt consolidation loans to those who have poor credit scores.
The interest rates for these loans will be higher than usual because of the increased risk to the lender that you might not be able to make all the repayments.
How can a Loan Broker Help with a Debt Consolidation Loan?
Loan brokers help you compare all of the loans that are available to you. Instead of applying on countless loan provider’s websites, you’re now able to see offers from a whole host of loan providers, all in one place.
Not only does this save you the time it takes to find all of these offers by yourself but a broker also saves you money. Many loan providers show loan brokers their best deals because they know they will be in direct competition with other loan providers for your business.
In addition to that, applying through a loan broker helps you save your credit rating. Whenever you apply for a loan, the lender conducts a credit check and that knocks off a few points from your credit score. If you apply to multiple lenders, your score goes down significantly and lenders will not entertain your application. It will be difficult for you to find a loan in the future with so many credit checks on the profile.
It’s important to mention why it’s better to apply through a broker. The lenders associated with them run a credit check on you rather than the ten credit checks that will be run on you if you apply directly to ten different lenders. One thing that no lender likes to see on the credit report of anyone applying for a loan with them is lots of credit searches. If you apply directly to ten different lenders that means that ten different searches will be recorded on your file. Whether it’s fair or not, some lenders will automatically turn down any application with lots of recent credit searches on a person’s file. That’s because, to them, it looks like the borrower is desperate for money and not in control of their finances.
Find your Debt Consolidation Loan with Loan Broker
If you’re looking for a debt consolidation loan, try Loan Broker. We’re a loan broker, not a direct lender. This means that we pass your application onto our network of trusted lenders. It all starts with your loan application. Provide us with the details we need –like how much money you would like to borrow, how long you will need to pay off the loan, what your monthly expenses are, and whether you are insecure employment.
The lenders associated with us will conduct a single credit check on your profile along with an affordability check. Affordability checks indicate whether you will be able to pay off the loan comfortably based on how much you earn and how much you spend in a given month. Our lenders perform a soft credit check on your profile that doesn’t harm your rating. A soft credit check is a formal review of your credit report that doesn’t leave any footprint and also tells the lender about your past relationship with credit and debt.
After you’ve provided us with the information we need, we then submit your application to all of our lenders. Within a matter of minutes, we’ll have all of their offers back for you to look at and compare. By doing it this way, you can find the best deal on a loan that works for you. And the best part is that this service is completely free for you to use and you’re under no obligation to accept any of the loans that you are offered.
To get started, Click Here.