I want to consolidate my debts, should I take out a loan?

If you are in a situation where you have a number of credit or store card debts or have others loans with high interest charges, you may benefit by putting them all under one roof with one monthly repayment. By taking out one new loan to pay off all your other debts may help you to budget more carefully. If you are finding it difficult to manage your existing debts, plus the high interest payments mean it will take a long time to pay of these debts, you should shop around for a personal loan in order to pay off your existing debts and benefit from a lower rate of interest. More details on debt consolidation loans.

However you should consider carefully before taking out a loan. If you want to consolidate your debts, but have no idea of how to budget thereafter, taking out a loan will be a bad idea as you'll only deepen the problem and end up further in debt. If you're thinking of applying for a loan because it is your last untapped source of money, perhaps your credit cards are used up to the credit limit and your overdraft is in unauthorised territory, you should take a step back and think about what you are doing. Perhaps it is not so much a loan you need, but help with controlling your spending.

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