Debt Consolidation is a method used by many self employed people/sole traders to consolidate their debts into one lower affordable payment, therefore making your monthly outgoings more manageable. Debt Consolidation is normally successful if you have some sort of asset to put against the loan, such as your home or a business property, also referrred to as a secured loan. This enables the provider to have some sort of security over the debt being paid.
Benefits of Debt Consolidation
All current repayments on credit cards and loans are converted into 1 monthly payment that is generally easier to manage and keep track of
Interest rates can be usually lower, so you may have a more affordable payment.
Less pressure and harassment in dealing with multiple creditors
In the long run you may save money and you will have a date when the loan will be paid off if you keep to your repayments.
Could help your credit rating as you will be less likely to default
Disadvantages of Debt Consolidation
Don’t be fooled into thinking you have cleared your debts. You have just shifted the debt to a different payment plan
Be wary of interest rates. Try to get a fixed rate if you want a payment that doesn’t change
Fees may be payable to arrange the new loan.
If you have a poor credit rating you may have a higher rate of interest to pay which can mean it is less affordable. Another debt solution may be better for you.
If you get into difficulties making the new payments it can be harder to deal with only one creditor if you are then looking at a debt solution for example.
Get information on your debts
If you would like information on getting help with your debts, please contact us at Business Debt Advice where our team of friendly advisors will be more than happy to help.
Sole Trader Debt Solutions
An IVA is a legal agreement between you and your creditors where you pay back a portion of the debts that you owe. In an IVA you can be debt free in 5 years or less.
We have an extensive range of guides to provide you with all the information you need to help you and your business.
View guides here
Business Debt Advice is owned by McCambridge Duffy who are one of the leading Insolvency firms in the UK and have been in the financial industry since 1932. McCambridge Duffy solely provide IVAs and other Insolvency solutions.
On our site you will find information on debt solutions, both formal and informal. We provide this information so you have a clear overview of the options available for dealing with your debts. We do not offer informal debt solutions, so if an insolvency solution is not your recommended course of action, with your permission, we will refer you to an appropriate agency/provider that can assist you further.
Information on formal and informal debt solutions is available on our website. We do not offer informal solutions, but provide this information so you have a clear and objective overview of the options available. If an Insolvency solution is not suitable or you would prefer to take an informal route, we will recommend an appropriate provider, with your permission.
All of our advice is free and confidential. A fee is only payable where further services are requested. All fees will be explained in detail and discussed prior to commencement of any solution. Repaying debt over a longer period may increase the total amount to be repaid. In the UK, consumer credit activities are covered by the Institute of Chartered Accountants in Scotland, Group Licence number G/900011