How Does Debt Consolidation Remortgage Work?


 Remortgage to consolidate debts is smart for people with good financial habits. It is worth mentioning that this strategy has its own risks that should not be ignored:

• A new loan usually has added costs and it is important to understand what it involves before you sign any contracts.
• It might increase your interest rate; if you have a bad credit score and you do not qualify for low rates you will end up with a rate that is higher than what you currently owe.
• You pay more interest over time- a debt consolidation loan may last for many years and this means that you will have to pay interest over the life of the loan.
• You risk making payments- if you miss payments on a debt consolidation remortgage, this will impact your credit score significantly. It is important to make sure you can cover the new payment without any difficulty.
• Does not help you deal with underlying financial issues- this means that you might find yourselves in a deeper debt because you do not know how to stop overspending.
• It may encourage increased spending


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