Debt Glossary : Debt Consolidation
Debt consolidation is the process of combining all your debts into one single debt, with the intention of reducing the size of your monthly repayments, either by extending the repayment term or by getting finance at a lower rate.
Although consolidation can make your financial life simpler, and can indeed result in lower monthly repayments, you may end up paying more interest overall in the long run, and you can also face the risks involved in converting unsecured debt into secured - i.e. the risk of repossession should you fail to keep up with repayments.
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