When you move your high-interest debt into a loan product that comes with lower interest rates and better terms, you are effectively reducing the amount of money you’re spending on repayments. Lower interest rates mean lower costs, which lets you pay off the same amount of money as you were previously, but now the principal will be cleared faster.

If you have a number of credit card payments and other unsecured loans, you often need to make multiple payments at different times. If you are late, you end up paying more in fees, interest and hurt your credit rating. By having just one loan and one repayment, it is far easier to manage. You can even get ahead and potentially boost your credit rating.

With interest rates rising at the fastest pace on record, it’s more important than ever to seek out the best options for your personal situation. Lower interest rates mean lower repayments which put more money back in your pocket. That allows you to pay down your debt faster and free up cash flow if you are struggling with the cost of living.

If you’re struggling with your Christmas debts and unable to keep up with the repayments, it’s likely that your credit score will start to deteriorate. Your credit score assesses the type of borrower you are and banks and lenders use this when they look at any future loans you’re applying for.

By consolidating and managing your debts more effectively, you can potentially lower your borrowing costs, pay back the debts faster and in the process boost your credit score.