When should I consolidate business debt?

2 min read

Lower totalGood reason

One paymentSimpler

Not to hideThe trap

When it helps

Consolidation makes sense when you carry several facilities — perhaps a stack of expensive short-term loans — and rolling them into one lowers the overall cost or gives a single, manageable payment with a clear end date. Model the before-and-after total repayable with the debt-consolidation calculator.

When to be careful

The trap is consolidating only to lower the monthly payment by stretching the term, quietly increasing the total you repay — or using it to avoid facing debt that's genuinely unaffordable. If the underlying problem is too much debt for the business to carry, advice matters more than a new loan. Consolidate to save, not to postpone.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

Does consolidating debt save money?

It can, if the new facility carries a lower total cost or replaces several expensive short-term debts with one cheaper one. It doesn't save money if you're only lowering the monthly payment by extending the term.

Is debt consolidation a warning sign?

Not in itself — it's a sensible tidy-up when it lowers cost. It becomes a warning only if you're consolidating repeatedly or using it to avoid addressing debt the business genuinely can't afford.