Debt consolidation
A debt consolidation loan gathers all of your existing debts into one new loan, potentially offering a single lower monthly payment.
This can be an effective solution if your debt problems are not severe and you only have a small number of debts. It is not usually a good way forward if your debts exceed £15,000, when an IVA is usually better. The drawback with consolidation loans is that more borrowing may simply worsen your position. Also, if you do arrange a debt consolidation loan, it will typically be secured on your property. That means you could potentially lose your home if you fail to keep up with repayments.
Don’t worry if you have already signed up to debt consolidation. An IVA can still be arranged even if you’ve already started making repayments.