Will Debt Consolidation Help With Your Debt Problems. 秋瓷炫于晓光领证 笔试第一被拒起诉

Personal-Finance Did you know that as of July 2012, outstanding personal debt in the UK stands at an incredible 1.46 trillion and the average UK household debt is 7,891 not including mortgages? Based on May 2012 trends, the total interest repayments on UK personal debt over a 12 month period would have been 63.1 billion. (Statistics taken from Credit Action) These are quite astounding figures. Debt consolidation is one of a number of options available to people suffering from debt. But is it the right option for you? This is part of a series of articles that covers four financial options that could help you take control of your finances and become debt free. Other articles include Individual Voluntary Arrangements (IVA’s) , Debt management plans and Bankruptcy. When people are in debt a loan is one of the first options they think of because that’s what we’re used to. If we need money to pay off our debts we apply for a loan. Or put another way, in order to get out of debt we get ourselves in more debt. We know this doesn’t really make sense yet we do it anyway. For those who take a considered approach to debt consolidation and ensure they can meet the repayments every month over the term of their loan and stick to it, debt consolidation can work. But they’re not the right choice for everyone and there are other options available. Now, have you ever been to a bank to apply for a loan to consolidate your debts only to be told by the loan specialist ‘Did you know there are other options available to help you out of debt sir/madam?’ More than likely not, because it’s their job to try their best to ‘SELL’ you a loan because that’s how they make money. You borrow say 2000 and repay 2800 over 3 years. Don’t get me wrong, there’s nothing wrong with anyone making money, we do after all live in a capitalist society. What I don’t agree with is the lack of provision of information that could really help people suffering from debt. So what exactly is Debt Consolidation The idea behind this is simple. If you’re finding it difficult to keep up with the monthly repayments on your debts or if you find you can only make the minimum payments you are hit with interest charges or additional monthly fees which mean your debts will take longer to settle and it’s harder to see the light at the end of the tunnel. So we work out how much we owe and how much our monthly repayments are then try to get a loan that will allow us to pay off our debts in one lump sum and reduce our monthly repayments to something more affordable. However we may find that although we are paying less each month we are paying for a longer period than previously and overall paying more than we originally owed. Is this really worth reduced monthly repayments and what is the real risk associated to this? Secured Loans – Nowadays, being approved for any type of loan is much harder than it used to be as the banks are reluctant to lend money to high risk individuals. Therefore a secured loan may be your only option. But you need to be absolutely sure you will be able to meet the repayments because if you can’t you could be at risk of losing your home which in turn will put you and your family in a far worse position. You could owe more than your original debts – Debt consolidation loans can ultimately cost you more than your original debt in the long run. People with poor credit usually pay a higher interest rate because they are classed as a high risk borrower. This pushes up your final balance and if something happens in the future where you can’t afford to keep up these repayments you could incur late payment penalties. The vicious circle of debt – When you’re using a debt consolidation loan and keeping on top of your payments you will actually be improving your credit score as you will be honoring your credit agreement. However, it takes a lot of willpower to control your spending and unfortunately many people won’t, and what if you find yourself in an emergency where you need to pay for a new boiler or your car needs an expensive repair. You will find that many people will take out new credit agreements or place more pressure on their credit cards in order to pay for the things they need or want. When you find yourself in this position many people take out another consolidation loan and find they’re right back at the beginning again with ever increasing debts. Consider your debt recovery options It’s clear from this article that I’m not the biggest fan of debt consolidation loans. It’s well worth looking at other options of becoming debt free such as an Individual Voluntary Arrangement (IVA) a debt management plan or even Bankruptcy but which ever route you take make sure you get practical impartial advice from a company who provides multiple solutions to ensure you commit to the best option for you. About the Author: 相关的主题文章: