Can I get a debt consolidation loan if I am self-employed?

Have you heard about debt consolidation? As long as you're managing your debts quite well, taking out a debt consolidation loan to cover your existing debts could provide a simpler way of keeping on top of your finances - and help you to budget for your monthly outgoings.

But could you get a debt consolidation loan if you're self-employed? We'll answer this question, and others about debt consolidation, below.

How does a debt consolidation loan work?

Basically, consolidating your debts with a loan could help to make things simpler.

By repaying several debts with the loan, you'll be left with one repayment to make every month (and to just one lender), which could be a bit less confusing when it comes to budgeting for your payments.

When taking out a debt consolidation loan, you'll also have some flexibility in terms of how quickly you'll repay it. You may feel financially comfortable enough to repay the loan sooner, and make larger monthly payments - which could save you more overall in interest.

On the other hand, you may feel happier repaying the loan over a longer time. Although this approach could end up being more costly (due to the interest that would accrue), making smaller monthly payments could help to give your budget a bit more flexibility.

Could I consolidate my debts if I'm self-employed?

Like any other type of loan, a debt consolidation loan could only be suitable if you can commit to regular monthly payments - and keep making these until you've repaid the loan in full.

Since you'll have to make your agreed payments regularly every month, it's important that you have a stable monthly income, whatever form of employment you're in.

If you're self-employed, it may be slightly harder to get a loan than if you were employed by someone else - because it's harder to guarantee a regular monthly income. However, as long as you can show your lenders evidence of a stable income over the last few months or years, you should be able to get a debt consolidation loan (as long as your credit rating is good enough).

If you're self-employed and want more information about whether debt consolidation is right for you, a debt adviser could answer your questions.

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