Those who do not own their own home may still be able to consolidate their debts. Other options are available, including getting an unsecured personal loan. However, lenders may not be as willing to approve a loan if you are already struggling to repay several loans on time. It may also mean you are severely restricted as to how much you can borrow. Personal loans can be used for debt consolidation in some cases but some have to be used for specific purposes only such as home renovations or buying a new car.
Free Price Compare can help you explore what personal loan options are available. You need to look carefully at your own financial situation before deciding what kind of loan or debt consolidation solution may be suitable for you. If you only have a few debts and have a good APR then it may be worth sticking to the existing repayment plans to avoid upheaval and possible charges or fees.
Top tips for using a secured loan for debt consolidation
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It is your responsibility to use the loan to pay off existing debts. Do this as soon as possible so you are not tempted to use the money for something else.
Do not borrow more than you need. As tempting as it may be, the aim is to keep monthly repayments as low and as manageable as possible. Try to repay the loan amount as quickly as possible to avoid a bigger overall repayment.
Consider all your options before taking on another debt. Assess your finances closely to ensure it is definitely affordable, even if there are any changes in circumstances.
If you are worried about debt or your finances, help is available from The Money Advice Service, a free and impartial advice service set up by the government. Speak to your lender if you are struggling to repay your loan.