Improve your debt situation with a consolidation loan find out the basic information and FAQs in the area below.


What is a Consolidation Loan?

Many people the world over end up in a debt situation that is threatening to get out of control. But while too many end up ignoring the problem or hoping it will resolve itself, there are plenty of simple ways of attacking debts with results!

A consolidation loan is just one way of fighting debts. The loan gathers up all your existing debts into one place leaving the borrower with one low monthly payment to deal with. This makes multiple debts easier to manage and cope with and often the monthly payment is more affordable too.

Consolidation loans work in that the overall loan term is often extended meaning that the overall debt you repay remains the same, but just becomes more manageable and easy to deal with.

Am I Eligible for a Consolidation Loan?

Usually the eligibility on consolidation loans is connected to the amount of money you owe. Most providers of this type of loan require that you have a minimum debt amount which varies but around $1,000 is normal. Other criteria usually include minimum age of 18 or 21 years and you may need to prove your debts. This involves official proof of how many creditors you have and past bank statements, as well as other relevant debt paperwork.

One piece of good news: it is unlikely that you will need to have a perfect credit rating to be eligible for a consolidation loan! As this is a loan aimed specially at people in debt, most lenders will not turn down low-credit borrowers.

Things to Keep in Mind

A consolidation loan can be a really useful way of facing and combating debts before they really do take over your life. However, it is worth bearing in mind that while your regular repayments may be easier to deal with, the overall debts will not just suddenly disappear. You will still owe the overall same amount, and may be paying back your debts over a longer period of time.

Some consolidation loan brokers may take a fee for their service, in finding you a suitable lender, so make sure you find out about any fees in advance.

A major plus point to consolidation loans is that often the lender will take over negotiations with your creditors meaning you won't have to live in fear of creditor letters or telephone calls. They may also be able to freeze your interest rate on the loan repayments.


Please note that Which Way To Pay New Zealand ( is not authorized to give personal financial advice under New Zealand's financial services regulations, including the Financial Advisers Act (Securities Commission New Zealand).

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