How much can I borrow?

There are a number of factors which will determine how much you can borrow with a consolidation loan. A full review of your income and expenditure will be required before a decision can be reached. If the loan is to be secured on your property, the amount of equity available in your home will be a key factor in deciding the amount you can borrow and the rate of interest charged. There are many companies offering consolidation loans and they lend from just a few thousand pounds to over a million pounds in some cases.

What is the maximum term for a consolidation loan?

This will depend on your own particular circumstances and how much you can comfortably afford to repay each month. These loans are usually available from between 3 to 25 years, although in some cases secured consolidation loans can be spread over a longer period.

How much will the consolidation loan reduce my monthly payments by?

This depends on how much you are borrowing; how much you are paying at the moment and how long you want to take to repay the loan. However you should see a significant reduction in your monthly payments, in some cases this will be by 50% or more.

How many debts can I consolidate under one new loan?

There isn't a limit to the number of debts that you decide to consolidate, as long as you can comfortably afford the new repayments.

What if I can't work and am unable to make the repayments?

It is sensible to consider this at the time you take the loan out, if you are off work due to sickness, accident or if you are made redundant, you need to consider how you will make your monthly repayments. There are payment protection insurance (PPI) policies available to cover you in these situations. However, ensure you purchase your cover from a standalone provider such as British Insurance.com as they often provide much cheaper cover than some of the policies offered by mainstream lenders.

Does the consolidation loan prevent me moving house?

No it doesn't stop you from moving, but you will need to discuss your plans with your lender. If your consolidation loan is secured against your house then you can use the sale proceeds to repay the outstanding balance of the consolidation loan or, in a situation where you are moving to another property, you may be able to transfer the loan to your new home. Either way, contact your loan provider and they'll help you decide the best way to proceed.