Consoldating debt

15 May

If your debt consolidation loan has a higher rate of interest than your overdraft, it'll cost you more to repay it.If you have more than one overdraft, debt consolidation could clear all of them and leave you with one monthly payment instead.If you are going to consolidate an overdraft and other debts with a loan, make sure that the rate of interest you pay on your debt consolidation loan is lower than the amount you pay on your overdraft.Some overdrafts are free (zero interest), but some do charge interest and some charge daily fees instead.You may also want to consider credit counseling from a nonprofit organization like the National Foundation for Credit Counseling.

But does debt consolidation help or hurt your credit?• Speak to a debt expert about repaying your overdraft at a rate you can afford.One way to repay an overdraft is with debt management, although it does stay on your credit record for up to six years.Debt consolidation is primarily designed for unsecured debt (i.e. When you consolidate your debt, you take out a loan to pay off several other debts.This allows you to consolidate the money you owe into one payment.