Debt consolidation means you take out a single loan to pay off all your other existing debts. This often means you get a lower interest rate, which also makes your overall monthly repayments lower. Debt consolidation simplifies your repayment arrangements. Unlike Debt Management, where your previous debts are not cleared, a Debt Consolidation Loan clears all old debts once and for all.

Debt consolidation can be attractive if you have a high level of credit card or store card debt, as card interest rates in the UK are generally higher than those offered by banks.

The key benefits of debt consolidation are:

• Reduced financial commitments
• Less risk of late payment fees