Research done by a leading price comparison site revealed that most debt consolidation loans were taken in the month of March. Most borrowers had taken plenty of festive loans around Christmas, along with incurring credit card debts and, therefore, May is the most popular month to pay multiple loans and merge them into a single one. Unsecured loans are far ahead in winning the hearts of borrowers in UK than their secured counterparts. The advantages of unsecured debt consolidation loans are cited below.
Low risk- Since the borrower need not offer any security to the lender, there is no risk of the repossession of the property. This makes the deal risk-free for the borrower
Low interest rates- Most borrowers who opt for unsecured debt consolidation loans are those who already have other loans running at much higher rates. For e.g., the average credit card rate is 15.9% , which is far greater than what one can earn from debt consolidation loans
Longer repayment period- If you blend your multiple debts into a single loan, the repayment period will extend, allowing you long time to pay back the loan installments
Better control over finances- Consolidation loans allow you to manage your finances in a better way, because paying one instalment per month is always better than paying multiple instalments to different lenders at different interest rates.
Relief from creditor's pressure- If creditors are getting on to your head and demanding you to pay their loans off, it's better that you go for debt consolidation loans and get peace back in your life.
The demand of unsecured loanswitnessed a great boom of 57.2% in the year 2003 and of these, 63.2% of the loans was taken for debt consolidation. One should go for unsecured debt consolidation loans, if he answers yes to the following:
Are you paying just the minimum required payment on your credit card per month?
Do creditors call you often for your due bills and loan instalments?
Have you defaulted on any of your loan?
Is your creditor threatening you to take you to the court for non-payment?
Do you put off paying bills until the final reminder?
So, after analysing your current credit situation, compare various unsecured loans and apply for the loan that best suits your profile and financial requirements.
