Multiple debts can get hard to balance and seem to drag out forever. Some people like to use a single loan as a way to clear several debts and reduce their monthly outgoings. It can also create a definite end date where your debt is paid off, whereas a credit card can seem to go on indefinitely as it can be too easy to use it when you need to.

If you consolidate debts, it’s essential to close the accounts you have paid off, such as cancelling credit cards etc. The benefits of a smaller payment and a definite end date will be undone if you have the loan then run up credit cards again, as you’ll end up back where you started but with an additional loan too. Closing your credit accounts will also show them as settled on your credit report, which should help to improve your score.

It’s essential to check the interest rates and terms of the debts you’re consolidating to ensure you’re not paying more by spreading them over a more extended period.