Consolidation deal is sometimes a marketing trick

There may be an upfront fee to pay or an administrative or arrangement fees for processing the refinancing. Some banks also charge early repayment fees, while others do not; so shop around for the best deal. Remember, that a debt consolidation deal is sometimes a marketing trick to attract extra attention for a standard personal loan.

And, there are other pitfalls to consider. You need to ensure the deal you are getting on your new financing is really better than the situation you were in before. Yes, you might have lower, more manageable repayments but your new loan consolidation provider may extend the term you repay that debt over a longer period. So while it gives you more money in the short term, you will pay much more in interest payments.

Also, check the rate. You need to ask the financial provider if it is a flat or reducing rate because there is a difference and personal loans can be advertised in both. While flat rates are usually lower; they might not be the most cost-effective option, whereas a reducing rate is calculated on the outstanding balance so compare like for like.