Should you consolidate your debts in 2018?

Last post: Jan 4, 2018

The New Year can be a great time to take stock of your finances and start with a solid plan. Consolidating debts can be a good organisational step to take if you have multiple outstanding loans.

 Do you want to start the New Year with a more positive and responsible approach to your finances? This is a great moment to stop, review, reflect and put a fresh financial plan into action.

Whether you want to commit to putting more money into a savings account, or plan to stick to a stricter budget in 2018, there are many great financial habits you could make your New Year's resolution.

Streamlining debts

One change those with numerous outstanding debts might want to make is consolidation. As anyone with multiple bills, expenses and repayments to keep up with will attest, juggling lots of different payments each month can feel chaotic. From proving to be a drain on your time and a source of stress, to resulting in missed payments which cause debt spirals to accrue.

One option which many individuals with multiple outstanding debts consider is consolidation. In these cases a new secured or unsecured loan can be arranged to cover all outstanding debts. This loan is then used to repay all existing debts, consolidating them into one, larger debt with just one regular repayment.

Should you consolidate?

Although this approach does not suit everybody, in many cases it can make everyday finances far less chaotic and much more manageable. It may, however, not be suitable in instances where existing loans have early repayment fees or where the new loan's interest rate is higher than that of the existing loans'.

Before committing to this option, do your research, do your sums and work out whether consolidation is an equally or more affordable option than your existing debts.

Want to consolidate your debts with a fresh personal loan in 2018? Find out more about how unsecured loans work and talk to our finance experts today.