In many countries, especially the United States and the United Kingdom, student loans can be a significant portion of debt but are usually regulated differently than other debt.The bulk of the consumer debt, especially that with a high interest, is repaid by a new loan.Because they are secured, a lender can attempt to seize property if the borrower goes into default.Personal loans comprise another form of debt consolidation loan.credit cards, store cards, catalogue bills, bank loans etc.then you might be paying more than you have to and more than you can comfortably afford to.If you take out a debt consolidation loan of 00 though and pay off your credit card balances and your store card balance you could reduce your monthly payment by or more.You would also only pay your loan for 5 years and would be free from debt at the end of the loan term.
You propose a monthly amount that you can comfortably pay to your creditors and they vote on whether to accept your proposal or reject it and file for bankruptcy.
This type of loan generally has a lower interest rate than most other forms of unsecured debt and as a result you end up with one low monthly payment.
So for example, let’s say you have two credit cards and a store card at present with a total outstanding balance of 00. Paying the minimum amount each month will clear your debts in an average time frame of 7 years.
As an Australian there are several options open to you for debt consolidation.
Debt consolidation allows you to combine a number of individual unsecured debts into one single debt that requires a single payment each month.