One loan can be a lot easier to manage and more convenient than juggling several different debts. You have less paperwork to deal with as you only receive one set of statements, and you have the added convenience of dealing with one lender with a single point of contact..
Debt consolidation is the process of folding (or “consolidating”) a number of different debts into a single loan or credit card, often with a lower overall interest rate.
It can be a useful option if you’re juggling multiple debts like apersonal loan, a car loan and perhaps a few credit card balances. By consolidating your debts you may only have to make one monthly repayment instead of several and you may only be dealing with one lender and one set of loan statements.
The biggest advantage of debt consolidation is the potential for big savings on your monthly repayments and overall interest charges.
Many people choose to use their home loan for debt consolidation because it offers a very low interest rate but there are several other options including a personal loan or credit card balance transfer.