Will debt consolidation help with my mortgage?

A debt consolidation loan can be a very useful tool for making your debts more manageable. In effect, it involves replacing multiple debts with just one loan - meaning only one monthly payment to deal with, only one interest rate, and only one debt to keep track of.

But it`s important to note that debt consolidation is only suitable for debts that are not currently causing you problems. If you can`t keep up with your debt repayments and you`re really worried about your finances, debt consolidation won`t be the right way to address this.

How a debt consolidation loan can help

Using a debt consolidation loan to replace multiple existing debts can make your debts more manageable in two ways. Firstly, a lot of people find a single debt consolidation loan a lot easier to keep track of than the several debts they started out with.

Secondly, it`s often possible to reduce your monthly outgoings by repaying your new loan over a longer period of time. This will mean you are repaying your debt for longer - and you could pay more interest as a result - but the smaller monthly payments can free up money for other things.

If you find a debt consolidation loan with a lower interest rate than the debts you`re consolidating, you could also save money in interest in the long run.

Will it help to make my mortgage more affordable?

If you manage to reduce the monthly amount you`re paying towards your unsecured debt with a debt consolidation loan, then yes, you`ll have more money left over to pay for everything else - including your mortgage.

However, if you find yourself asking this question because you`re really struggling financially, then a debt consolidation loan is unlikely to be suitable.

Although debt consolidation can reduce your monthly outgoings, the difference is unlikely to be big enough to help with serious financial problems. It also won`t change the cause of your financial problems, and you could well find yourself struggling again if your circumstances get any worse.

As such, if you are struggling with your debts, you should talk to a debt adviser about more appropriate debt solutions - you may find they recommend a debt management plan or an IVA (Individual Voluntary Arrangement).