Debt consolidation

If you have multiple loans or lines of credit, you may decide to consolidate the debts into a single, more manageable loan.

You could combine loans from several different providers into a single debt from one lender.

This process could result in a reduction in monthly repayments, and if your credit score has improved since applying for finance, you might also be able to obtain a lower interest rate.

On the other hand, debt consolidation can involve extra fees, and you may end up paying a higher interest rate if your credit score is too low.

In addition, missing repayments on a debt consolidation loan could significantly lower your credit score, and you may be charged additional fees.

The types of loans that can be consolidated include:

Secured loans

For this type of loan, you’ll need to offer collateral, such as property, vehicle, land, machinery or another major asset that your business owns, as security against the amount you want to borrow.

Due to the lower risk for the lender, secured loans are generally cheaper than unsecured loans.

However, applications for secured loans can take longer to be approved, and if you fail to meet the monthly repayments, the lender can reclaim their debt from the asset you’ve put forward as security.

Find out more about secured loans.

Commercial mortgages

This is a loan that involves paying a deposit followed by monthly repayments with variable or fixed interest rates.

Commercial mortgages usually run for between one and 30 years.