consolidate debt

Many Reasons Behind The Rising Debt Burden

Credit counseling, debt settlement and debt consolidation are a few ways in which you can get out of your debts. Find out more.

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Don’t Get Into Hot Water With Your Energy Bills

Our debt advisers here at Debt Advice Group get a really good feel for what’s going on in the debt world, simply because of the number of people in personal debt that they see each week, but even they were surprised by the findings of a Facebook poll by our sister company Moneyextra, which posed a few debt questions on the topic of energy and mortgage purchase.

Over 7,500 people took part in the poll and a staggering quarter of those surveyed said that they pay their gas, electricity or mortgage on a credit card, at least sometimes (12%) and in 13% of cases pretty much all the time.

The reason for the raised eyebrows is that this is a really dangerous thing to do, in financial terms.  For a start, it implies that a person might be struggling to make the required payment in the first place, as the interest that would accrue on a ‘purchase’ of any of these items would significantly add to the cost to the purchaser.  If they can pay the amount off when it comes to paying their monthly credit card bill, fair enough, but many people just can’t and are using the card as a last resort to keep the gas pumping through to the oven and the lights on in the house.

The snowballing effect of leaving such debts on a credit card account is probably something that many of those needing debt advice recognise as an all too familiar scenario.  Before you know it, it’s not just this month’s mortgage or this quarter’s energy bill that you’ve not been able to pay off the credit card, but the following payment too, and then the next and the next.  The debt grows like Topsy and sooner or later you will meet or exceed your limit.  What happens then?  There’s every likelihood that your credit limit might be reduced or your credit stopped altogether, if you then can’t make the card payments, and the whole situation has just turned around and bitten you again.

The important thing that many people with personal debt problems and in need of debt counselling tend to ignore is the issue of interest rate.  When you are in debt, our debt advisers know full well that desperation leads you to cover up that little bit about the rate of interest that’s tucked on the bottom of your credit card bill.  It almost seems irrelevant sometimes, as it’s often Hobson’s choice and your only means of paying what you owe.  Unfortunately, many people feeling like this end up with enormous debt issues and have to get debt management plans or IVAs in place in order to get them out of the hole that paying for energy or mortgage on a credit card has caused.

14% of the people who took part in the poll said that they are in arrears with their water, gas and electricity bills.  This should also set alarm bells ringing, as the Utilities have a lot of power when it comes to getting their money out of you – after all, they control your access to heat and energy and can really force you to make that a priority payment, even if other people are ahead of them in your debt queue.

So how do you tackle that debt queue?  You can’t go on borrowing from Peter to pay Paul, so you need to find some fairness in to the equation and pay each creditor what you can afford to pay, according to what you owe.  This is where our debt advisers come in.  They can help you make draw up such a debt management plan or, if you qualify for an IVA, negotiate completely with the people in your queue on your behalf, taking away all the attempts at queue jumping, hollering louder than the next creditor and stalking you at the metaphorical ‘bus stop’.  They can stop your creditors calling you at times when you don’t have the energy and at times when you do.  They can fuel you with more power to negotiate and put you back in the driving seat again, in control of your finances and not running on empty.  That’s what debt advice; debt counselling and debt solutions provision is all about.

Rising fuel costs are the reason given by 25% of people when it comes to naming the cause of their debt.  If you are one of them, don’t shy away from sorting the situation out.  24% of people are shopping around for cheaper energy, but you may have already done that and found that the saving is a drop in the ocean.  It’s easy not to think about heating and energy in summer, but don’t make the mistake of leaving it too late to sort out your finances before the winter comes.  Scottish Power’s gas tariff hike isn’t waiting for winter – going up 19% as from August 1 – and electricity is going up by 10% on the same day.  This is just one example, so ask yourself if you can really afford that extra 19% or 10% and where it’s going to come from, if your card is already maxed out.

Debt does drain your energy, but don’t let it completely destroy your life.  Help is on tap from an expert team of debt advisers at Debt Advice Group, so plug into it, let them analyse your current situation and get things sorted out, before you are in too much hot water to save your financial situation and possessions.

Please feel free to get in touch for advice on general debt issues such as bailiffs and we’ll provide the necessary information.

Debt Consolidation: Pros and Cons

Debt Consolidation: Pros and Cons

Are you considering consolidating all your loans? For sure, you are intending to do so to effectively overcome your debt problems soon. However, as we all know, such loan products are not only full of advantages. There are also disadvantages that come with those. In the case of debt consolidation loans, you may be surprised at how there are more possible disadvantages than advantages.

In the end, your decision whether to apply for and obtain debt consolidation loans or not would depend on how you could possibly gain from getting one. The cons could surely be outweighed by the pros. You would need to fully reassess your personal and financial condition to properly evaluate debt consolidation loans and determine if it would be best if you get one.

The pros

First, debt consolidation loans could help you significantly lower the amount you need to shoulder paying off your monthly dues for loans. This could be because high interest rates of your original loans could be replaced by a single but lower interest payment required. The term of the loan could be longer, which logically makes lower interest charges possible. Thus, such products are ideal if your main goal is to reduce loan payments you are required to make every month.

How about the convenience of combining all of your existing debts into a single loan? That is facilitated by a debt consolidation loan. Such products are usually huge enough so you could repay all your current loans. In exchange, you would make a new significant debt that has consolidated all other debts. That means you would only have to deal with only one creditor, which would make paying off debt less confusing and convenient on your part.

You may say goodbye to all your other creditors that have been pestering and harassing you. On top of that, you may take a bargaining power to waive annual fees, lower service charges, or get much lower interest rates. You could further make more convenient and advantageous provisions and terms for your new loan.
The cons

First, debt consolidation loans are mostly secured loans. The interest rates could be much lower but that could be in exchange for longer terms. Such loans may take up to 20 years or longer to mature. Monthly payments required could truly be more attractive but if you could compute the overall costs of such loans, you may end up paying more. And because you have put a property as collateral, you are not exempted from the possibility or risk of losing it if you would default on the loan.

Most loan providers that offer and provide debt consolidation loans also impose financial penalties if you would attempt to alter terms of the contract in the future. Those are called early exit fees. Your current loans may also impose such charges, which may make it less practical to opt for debt consolidation. Applying for and getting approval for debt consolidation loans could also get more difficult and there are many disreputable lenders out there that may take advantage of you.

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