For people who find themselves heavily in debt, there's a financial product to ease the burden: the debt consolidation loan.

But first, a word of warning: debt consolidation loans can be used both wisely and unwisely. If you take out a consolidation loan, you should remember that you're doing so to get yourself out of debt, not to increase your spending power. There's little point in getting yourself out of the red with a debt consolidation loan, only to accrue more unmanageable debt. On that note, there are many real advantages to a debt consolidation loan when it is used sensibly.

Here, we outline three advantages of consolidating your debt to help you decide if it’s best for you.

1. A debt consolidation loan can make repayments easier

It can be difficult to keep track of multiple loans, and if you have several credit accounts - credit cards, store accounts, and personal loans - you’re probably paying more fees than you really need to. A debt consolidation loan can solve both problems by pulling all your debt into a single loan. This reduces the amount of fees you pay and makes repayment a lot simpler. Gone are the worries that you’ll miss a repayment or miscalculate your monthly budget. With just one debit order for all your debt, you know exactly how much will be deducted every month.

Read more about Old Mutual debt consolidation loans.

2. Consolidating your debt can lower your monthly instalments

If you have significant debt and are struggling to make minimum payments, a debt consolidation loan can give you some breathing room by extending the term of your debt and lowering your monthly instalments. But this comes at a price. A longer loan term also means that you accrue more interest over the life of the loan. For this reason, your aim should always be to pay off your debt as quickly as possible even if you use a debt consolidation loan to make monthly repayments more affordable.

3. Prevent debt from becoming unmanageable – again

Once you’ve taken care of your many debts with a debt consolidation loan, you still need to work on reducing your debt as quickly as possible. And that means examining your spending habits and looking for areas where you can save. At Old Mutual, we aim to provide you with both the products and financial education needed to ensure your financial security.

Take a look at the articles in our Financial Blog series which you’ll find here (select the Financial Blogs button). They are designed to help you cut costs, save money, and create an emergency fund. Learn how to budget using apps like Vault22, how to save on energy and water bills, and how to save on car insurance and health cover. With the financial skills and money-saving tips presented in these blog articles, you too can put yourself on the road to financial security. And if that road starts with a debt consolidation loan, you can get that loan here too.