Consolidating your debt is something we used to hear a lot of - it means borrowing from a cheap source to pay off a more expensive debt. For example, taking out a personal loan to pay off a credit card debt, or worses getting a top-up mortgage to do the same.
The advice nowadays is to steer clear of 'easy money' and to be wary of ‘consolidating your debt’.
Consolidating your debt is something we used to hear a lot of - it means borrowing from a cheap source to pay off a more expensive debt. For example, taking out a personal loan to pay off a credit card debt, or worses getting a top-up mortgage to do the same.
The advice nowadays is to steer clear of 'easy money' and to be wary of ‘consolidating your debt’.
As the Money Advice and Budgeting Service says, taking out a personal loan with a guarantee or collateral attached or getting a top-up mortgage (difficult these days)just turns unsecured debt (which creditors can’t demand you pay off easily) into secured debt.
So don’t rush into paying off debt. Get advice first.
Be very wary of moneylenders might seem like a solution at the time, but with legal doorstep lending companies charging exorbitant annual interest charges.
The top golden rules is follow the five golden rules and work towards renegotiate your debt, nor increasing your debt.
