Debt Consolidation

You take out a loan to pay off your current bills with a debt consolidation loan. You may take out a debt consolidation loan for £5,000 to pay off all of your debts over a predetermined period of time, say, £2,000 on one credit card, £2,000 on a store card, and £1,000 on your overdraft.

Warning: You need to be careful when you are consolidating debts because by consolidating your debts into a mortgage, you may be required to pay more over the entire term than you would with your existing debt.