Loan consolidation: a guide to deciding
Consolidation can ease a budget, but it is not always advantageous. Here is what you need to decide with full knowledge.
Updated 23 October 2026
The principle
Your current loans are repaid by one new loan. You pay a single monthly payment to a single lender.
Possible benefits
- A lower monthly payment
- Clearer budget
- Option to add cash
Points of caution
By extending the term you generally pay more interest overall: the lender must inform you when the term is lengthened and the cost rises. Compare total cost before and after. Check arrangement and guarantee fees and early-repayment charges on current loans. The applicable legal regime depends on the loans consolidated.
Good questions to ask
- What is the total cost versus today’s?
- What fees and charges apply?
- Is the payment still affordable in an emergency?
- Is there security on my property and what are the consequences?
Frequently asked questions
Does consolidation cost more?
Often yes in total cost if the term is extended, even if the payment drops.
Which loans can be consolidated?
Consumer, car, revolving, sometimes mortgages, depending on the operation.
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