debt solutions south west information menu

Debt Solutions Southwest Ltd is regulated by the Ministry of Justice in respect of regulated claims management activities. Its registrations is recorded on the website www.claimsregulation.gov.uk

Debt Solutions Southwest Ltd is fully licensed by the Office of Fair Trading to provide debt management and credit broking advice.

Debt Solutions Southwest Ltd is a debt management business based in the South West of England, providing a full debt management and credit advisory service to individuals and businesses.

The concept of debt consolidation is easy enough to understand. The borrower (or debtor) takes out one new loan in an amount to repay all of his or her existing loans and debts.


The new loan is long term and either secured on a property or unsecured. It has a lower interest rate than the debtor’s existing loans (which were probably credit and store cards).


The result is that the monthly payment on the new loan is lower than the total monthly payments were on the old loans that have been paid off.


Low affordable monthly payments.


Old creditors paid off in full, debt collector pressure is relieved and potential penalties and costs for late payments reduced.


You now have to deal with only one lender.


Your credit rating is not damaged.


You now have a chance of a new start.


Because the new loan is long term, the interest you have to repay could be more than the total interest you would have repaid under the old loans.


Debt consolidation usually involves up-front fees, so your total debt could increase.


If the loan is secured against a property, the property could be at risk if payments are not kept up.


There is a risk that the debtor believes that because the old loans are now ‘paid off’ his debt problems are over, which tempts him to re-borrow on credit and store cards.


Debt consolidation is not available to all borrowers and depends on credit status.


Primarily, there will be four questions you need to ask yourself before you think you are suitable for debt consolidation, namely:


• Will my credit rating and asset position enable me to be accepted by lenders for a debt consolidation loan?


• Will the interest rate on the new loan be significantly less than the average interest rate of my existing loans?


• Will I be able to make the monthly repayments for the whole term of the new loan?


• If I am moving from unsecured debt to secured debt, does this mean my home is at risk and, if it is, does this put even more personal pressure on me?