For tenants deciding whether or not to consolidate existing debts it is worth understanding the benefits and the pitfalls. The advantages of debt consolidation are lower monthly loan repayments because each debt is combined into one, usually over a longer term, possible lower interest rates, and the knowledge that the debt is owed to just one loan company and not several which is often difficult to manage. Council and private tenants can apply on the right today!

The disadvantages of debt consolidation include the possibility that the repayment term on the loan could be longer. Therefore, although the monthly repayment maybe less, the total amount to be paid back maybe more. Before deciding to combine existing debts into one tenants debt consolidation loan establish what the redemption penalties are on the existing loans, you maybe surprised to learn that the charges are higher than you expected. Also, if you arranging a debt consolidation for the first time find out the level of commission charges to set up the loan.

Some tenant loan companies offer payment protection insurance to borrowers should the unexpected occur such as redundancy or illness to cover loan repayments. If you are thinking of taking out this insurance which maybe recommended by the company, consider shopping around for similar products offered by other insurers and always read the policy to understand the level of cover offered.

More help for tenants!

If you require further assistance with managing debt, always seek independence advice from consumer loan organisations. Free help is offered by the National Debtline and the Consumer Credit Counselling Service.

Please Note! YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. ALL SECURED OR UNSECURED LOANS ARE SUBJECT TO STATUS. SECURED LOANS ARE SECURED ON PROPERTY.

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