What is Debt Consolidation
Debt consolidation occurs where a consumer takes out a loan or other credit agreement in order to pay off two or more existing debts. A variety of credit products can be used including:
- an unsecured loan
- an advance from an existing mortgage provider secured against property but leaving the original mortgage intact
- a second charge mortgage (a loan secured on property, from a lender other than the existing mortgage provider, that leaves the first charge mortgage in place)
- a remortgage
- the transfer of balances to a credit card (including the use of credit card cheques to pay off non-credit card debts).
Debt consolidation is when a client takes out a mortgage to pay off all your existing loans. Debt consolidation will lower monthly repayments, a debt consolidation loan clears old previous debts, once and for all.
How Debt Consolidation Works:
Debt consolidation allows you to make a clean start, converting your existing commitments into a single loan payment. Mayfair Consulting will review your financial circumstances to make sure that a consolidation loan is the best option for you. You should note that a consolidation loan would usually be secured against your home, which would be at risk.
If a debt consolidation plan is the best option for you, your old loans will be paid off and replaced with a new one on more favourable terms, and your previous credit rating should be kept intact. You will then have a new loan with a single monthly payment.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The overall cost for comparison is 7.1% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. There may be a fee for the mortgage advice. The precise amount will depend on your circumstances, but we estimate it will be 1.5% of the loan amount with a minimum fee of £500 added on to the loan.
Mayfair Consulting Limited is an Appointed Representative of The Mortgage Times Group Limited, 279 Tottenham Court Road, London , W1T 7RJ , which is authorised and regulated by the Financial Services Authority no. 303007.
