Sample article: written to demonstrate the ASK blog. It will be reviewed or replaced by the ASK team.
If you have several loans or credit cards, or your repayments feel stretched, restructuring them into a different arrangement may help. It can also cost more over time, so it is worth working through a few questions before you decide.
What are you trying to achieve?
Be clear about the goal. A lower monthly repayment, a single payment instead of several, a shorter overall term and a lower total cost are different goals, and one arrangement rarely achieves all of them at once. A lower monthly payment over a longer term, for example, usually means paying more interest overall.
What do your current loans really cost?
List every facility with its outstanding balance, rate, monthly payment and remaining term. Check the early settlement terms of each one, because settling a loan early can involve fees. This gives you a clear starting point to compare any new arrangement against.
What will the new arrangement cost in total?
Compare the total amount you would repay, not only the monthly figure. Include arrangement fees, any insurance requirements and the cost of settling existing facilities. Ask how the rate is set and whether it can change.
How might it affect your credit profile?
Applying for new credit and settling existing facilities are recorded on your credit report. Paying on time under a clearer plan can support your profile over time, while missed payments can harm it. Avoid taking on new credit while an application is being assessed.
Is restructuring the right step at all?
Sometimes a conversation with your current lender, a change to your budget or settling one expensive facility makes more sense than restructuring everything. A careful review should consider these alternatives too.
Questions to ask a lender or advisor
- What is the total cost of the new arrangement compared with my current loans?
- Which fees apply to settling my existing facilities?
- Can the rate or repayment change during the term?
- What happens if my circumstances change?
How ASK can help
ASK reviews your existing loans with you, explains whether restructuring could improve your position and what it would cost, and helps you prepare an application where it makes sense. Approval and terms are decided by the bank or finance provider.