How do debt consolidation loans work?

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  • Late payment fees
  • Break costs or early termination fees
  • Deferred establishment fees
  • Broker fees (when taking out a loan through a broker, the broker’s service fees aren’t included in the comparison rate, which can be significant)
  • Repayments
  • A flat fee (e.g. $499) that applies regardless of the value of the loan
  • A tiered fee (e.g. $250, $500, $750) based on the value of the loan
  • A percentage fee (e.g. 3%) based on the total amount borrowed and the credit or risk profile of the customer
  • A hybrid fee (e.g. $200 + 2% of the loan amount)
  • A fixed fee where the loan is repaid in full any time prior to the end of the loan term (e.g. $500)
  • A fixed fee where the loan is repaid in full prior to a minimum period (e.g. $250 if full repayment is made less than 2 years into a 5-year loan)
  • A variable fee based on the amount you would have paid in interest and fees had the loan run to full term
  • Credit card debt
  • Store card
  • Hire purchase debt
  • Car loans
  • Medical bills
  • Rent owing
  • Utility bills (mobile, internet, electric, gas, cable, etc)
  • Personal lines of credit
  • Income taxes
  • Bank overdrafts

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