Scottish Debt Consolidation

About Debt Consolidation

The phrase “debt consolidation” has developed a number of different meanings.

Historically this term relates to applying for one large loan which is then used repay a number of other credit balances. These consolidation loans might be secured against your home (a second charge mortgage for example) or provided on an unsecured basis.

In recent years guarantor loans have increasingly been used for credit consolidation purposes. Guarantor loans are also provided on either a secured or unsecured basis, with a guarantor becoming liable to repay the debt if the borrower cannot.

Credit card balance transfers are also used to consolidate debt. Promotional offers (like 0% interest for a period of time) make this an attractive way to clear one or more old credit card balances.

Protected trust deed providers and debt advisers have also started describing debt management solutions as types of debt consolidation. These debt solutions typically consolidate the repayment of several debts into a single monthly payment and put the administration of multiple creditors into the control of a single debt advisory firm.

Please read on for further information about each of these types of debt consolidation that are available in Scotland. We describe the major benefits, costs, and risks associated with each option.

This article’s author possesses professional qualifications in debt advice and mortgage advice, so has experience of debt consolidation from a lending and debt advisory perspective.

For personal advice about the best way to consolidate your debts please get in touch.