Repayment capacity : you should carefully assess your repayment capacity. Are you certain that you will not struggle with repayments after consolidation?
Are you struggling with multiple debts? If so, the consequences of missing repayments range between credit history damage to a debt spiral. You can avoid facing these issues with consolidation. Debt consolidation loans in Ireland provide a practical solution to those who are juggling various types of loans.
A debt consolidation loan combines multiple debts to be paid off at different interest rates on different due dates into one single loan.
For instance, if you have overdrafts, bad credit loans and other short-term loans, you will take out a new loan to pay them off and make one monthly payment instead of making multiple payments to multiple lenders each month.
Consolidation makes budgeting easier and helps save money on interest payments.
You apply for a new loan that covers the cost of existing debts. If you receive approval, you use the loan amount to pay off your existing debts once and for all, and then you start making monthly payments towards the new loan. Consolidation loans are generally unsecured.
| Loan 1 | Loan 2 | Loan 3 | |
|---|---|---|---|
| Amount owed | €10,000 | €5,000 | €3,000 |
| Repayment term (remaining) | 3 years | 2 years | 1 years |
| APR | 8.3% | 8.9% | 8.9% |
| Monthly repayment | €313.58 | €227.48 | €261.68 |
| Interest to be paid | €1,288.88 | €459.52 | €141.36 |
| Total repayment | €11,288.88 | €5,459.52 | €3,141.36 |
Repaying all these loans will take three years, and you will pay interest up to €1,889.76.
If you decide to take out a consolidation loan of €18,000, you will most likely qualify for a lower interest rate, provided your credit history is not bad. This will help you save money on interest payments. Use a debt consolidation loan calculator to calculate how much it would cost you.
Every lender has their own debt consolidation loan eligibility criteria. Only if you meet those criteria will they approve your application. The basic criteria include the following:
If you choose Brokevo to apply for a consolidation loan, you will most likely receive lower interest rates. We can help you get the best debt consolidation loans in Ireland despite the challenging past payment records.
Here are the debt consolidation pros and cons :
| Benefits | Drawbacks |
|---|---|
| Consolidation makes payments easier to manage. | You will have to pay fees to make arrangements for consolidation. |
| Instead of many, you will make only one single payment. | Lower interest rates are out of your reach if your credit history is abysmal. |
| You can reduce the cost of the debt. | There is no guarantee that all outstanding loans will be consolidated. |
| It helps improve your credit score. | Consolidation does not guarantee that you will clear the debt. |
Though consolidation loans are subject to risks, Brokevo can help you qualify for them at lower interest rates. If we find that your overall financial situation does not match the criteria set by lenders, we will work with you to improve your chances of getting approved or discuss other methods.
Although consolidation loans seem to be convenient, you cannot throw caution to the wind. As a broker, we can help connect you with lenders who will be willing to consolidate your debts, but it does not rule out the need for research.
Repayment capacity : you should carefully assess your repayment capacity. Are you certain that you will not struggle with repayments after consolidation?
Interest rates : check whether the interest you are to pay on the consolidation loan is lower than what you would pay otherwise. Consolidation should ideally charge you less money.
Repayment terms : examine the repayment term. Sometimes, consolidation debt comes with a longer repayment term, which costs you more interest in total.
Brokevo has a large panel of lenders who consolidate non-priority debts. These debts are short-term, high-cost debts including credit cards, overdrafts and personal loans. They do not include priority debts such as mortgages, auto loans and other instalment loans.
Our partner lenders consolidate the following debts:
Credit card debt : Consolidate credit card debt if you are running up a balance on multiple credit cards. Lenders on our panel provide 0% balance transfer cards with an introductory period of 24 months.
If you pay off the whole balance within this period, you do not have to pay interest.
Personal loans : Consolidate personal loans if you cannot keep up with their repayments separately. We will help connect you with lenders who provide consolidated personal loans at lower interest rates.
Our partner lenders also accept applications from borrowers with compromised credit histories.
Overdraft debt : If you are running up overdrafts, consolidation is the best solution to deal with them. You can avoid daily interest as consolidation loans offer lower interest rates.
BNPL debt : Consolidate BNPL debt by taking out a personal loan. Though they are small instalment loans, lenders treat them as consumer credit such as credit cards and overdrafts.
It is important to note that the role of Brokevo is to match lenders with your requirements. We strongly suggest that you compare your options before consolidating debt. Consolidation does not always guarantee lower interest rates.
It is likely that you are struggling to keep up with repayments due to low income. Consolidation might seem to be the best solution, but not all lenders will be willing to consolidate your debt if you are on a low income.
Before consolidating debt, lenders will run an affordability check. They will examine your past payment behaviour and repayment potential. It is essential that you demonstrate your repayment capacity even if you are on low income.
Brokevo can connect you with lenders who provide debt consolidation for low income, but you will still need to prove that you can manage payments.