How does debt consolidation work?

January can often feel like the bleakest of months, with the bright lights of Christmas a distant memory.

But the beginning of a new year is also a time for fresh starts, and a chance to get your affairs in order - especially if you spent more than you intended to on credit cards during the festive period (justifying it with the excuse, ‘well, it is Christmas after all’).

Unsurprisingly, the charity National Debtline says that around 7.9 million people say they are likely to fall behind with their finances at this time of year, while dealing with the impact of spending more than they could afford to during December.

Run by the Money Advice Trust, the organisation recommends that people who have lots of debts should join a credit union, which can help you to get your finances back on track and alleviate financial strain.

One way a credit union can help you to get your finances under control is through the provision of a debt consolidation loan.

Debt consolidation is the process of combining multiple debts into one figure, meaning you only need to make a single, affordable monthly payment in order to reduce the overall amount you owe over time.

This type of loan is beneficial if you have debts with several lenders and are struggling to keep on top of high interest rates and increasing repayments, a common scenario which often leaves people feeling stressed and anxious.

By borrowing enough money to cover the cost of all your existing debts, you’ll owe just the one lender, making it easier to focus on clearing your credit balances in a fixed amount of time..

From no set-up costs or arrangement fees, to access to ongoing advice and support to help you manage your money, there’s many benefits to taking out an affordable loan through a credit union.

And at CLEVR Money, as part of our ‘Beat the Banks’ promise, take a loan from us of less than £5000 and if a high street bank offers you a lower interest rate, we’ll match it. It means that you can't lose out by coming to us first and you’ll could pay back less on what you borrow, making it easier to get a grip on your finances (terms and conditions apply).

To find out more about taking out a debt consolidation loan or other borrowing and saving options available from CLEVR, visit www.clevr.money or email hello@clevr.money.