UK Accounting Glossary
A consolidation loan is a type of loan that encompasses a number of other liabilities into one loan. The greatest advantage of a consolidation loan is its low rate of interest. For instance, those with outstanding credit card debt face significant interest rate charges and may, therefore, benefit from a relatively low-interest rate consolidation loan that actually reduces the dollar amount owed each month. Other powerful pluses of a consolidation loan are practicality and convenience. By encapsulating all debt into one loan, a consolidation loan can break through the clutter of numerous bills and place all debt on one consolidation loan statement. A consolidation loan can provide a one payment solution for such financial burdens as credit card bills, automobile loans, college loans, and various other consumer debt.
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This glossary post was last updated: 4th February 2020.