debt consolidation

Debt Consolidation: A Few Pros And Cons Explored

The decision to opt for student debt consolidation should be factored on several crucial points. Financial experts often opine that it is better to steer clear of this method of debt management since (even with the smaller repayments) you end up paying much more than what you are paying on the several loans that have been consolidated in to one single payment. The repayment period is generally longer in case of debt consolidation and as such you end up paying more in the long term. On the other hand, since you’re down to one single consolidated debt from several ones, it becomes easier for you to keep track of your repayment.

Let us learn more about the merits and demerits of this phenomenon. However, even before delving into further details, it’s wise to remember that even if you’re opting for consolidation, you should take due care in going through reliable Services review in order to determine which debt consolidation program you should opt for.

Merits

If you have loans with multiple lenders or creditors and it becomes difficult for you to keep track of the payments to be made by you, you can resort to consolidation that helps you bring all your debts under one umbrella loan (for which you are answerable to only o5025164562_6af1ac753c_nne lender). Therefore it becomes easier for you to keep track of your payments.

Since the repayment period is longer, you can repay smaller amounts.

You can look forward to reinstating all your loan benefits like eligibility to apply for financial aid, deferments etc after you have made satisfactory arrangements for loan consolidation. Actually most of these benefits are removed once your debts are placed in default- but after opting for consolidation (i.e. when you’re placed out of default) you can look forward to the reinstatement

There generally are no application processing fees or prepayment penalties

The money that you’re saving up each month can be used for paying up other important dues like utility bill, rent etc- in short—- there is substantial improvement of cash flow with all your debts being consolidated

Demerits

There are chances that you might not qualify for the same deferments on your consolidated debts as those which were applicable on original loans

If you are including Perkins loans in the consolidation then you might end up losing the chance to qualify for certain forgiveness programs

As already mentioned above, a longer repayment period would eventually mean that you are paying up more in the long term

Conclusion

Its important to weigh the pros and cons carefully before opting for a consolidation program. Consolidation- it’s often opined – should be your last resort. If you’re struggling with your existing debts then you should first have a word with your bank or credit union. Find out if your family can chip in with help or not and then consider seeking the aid of consolidation.


Prioritizing Your Debts: It’s Why And How

The citizens of the United States of America are working really hard to fight their present debts. According to the Federal Reserve Bank of New York, the overall burden is plummeting with debt reduction around $100 billion in less than a year. This, without a doubt, is a positive sign. However, it should be noted that your responsibility does not end with the cutting down of debts. You should be able to manage your remaining debts in a proper fashion. Your debt prioritization should include calculative measures such as:

  • Making your repayments on a timely manner
  • Targeting your higher rate debts first
  • Avoiding unnecessary expenditures as much as possible

However, borrowers are often confused about which loans to pay back first. This acts as a stumbling block in the way of getting rid of these debts. But fret not! Here are some effective ways to prioritize your debts or paying off your loans in a smarter way.

debt problemsHow can you prioritize your debts?

The loans (handled by you at present) which are to be paid first are called “priority debts.” These loans are not necessarily the ones which carry high rates of interest. Think what you’re going to lose if you don’t pay up the loan. If you are not keeping at par with your mortgage loans then you’re likely to lose your home. If you haven’t paid your fuel bills you might as well find your electric connections cut off. Non-payment of some debts might even result in court summons as well.

Here’s how you should arrange your payments

  • Mortgage or any debt obtained against your home
  • Council tax
  • National Insurance, Income Tax
  • VAT
  • Child maintenance
  • Electricity bills
  • Council tax
  • Court fines (if any)

You might as well opt for a reliable debt consolidation service in a bid to bring all your debts under one umbrella debt. The rate of interest applicable on the remaining debt would be less than that what you were paying before. It not only aids you secure lower rate of interest but also lets you track your loans in an easier fashion. But, exercise due prudence in consulting the top ten reviews of the debt consolidation service providers before settling for one of them.

One of the most effective solutions in this regard would be to turn to a financial advisor as you find that you have been consistently unable to pay your debts off. Don’t wait until you lose your home or are compelled to declare yourself a bankrupt.

Conclusion

Make sure that you’re adopting a methodic approach towards your financial responsibility. Even if you are turning to professional debt relief or consolidation services, you yourself should sit down with all your statements, receipts, and dues in order to calculate how much you’ve paid and how much you owe. Consider the rates of interest and late fees on each of your debts. This will help you estimate whether at all you are paying up lower rate of interest after opting for consolidation or not. Additionally, you would be able to get an idea of if you would be able to repay them or not.


Should You Opt For Debt Consolidation Services?

With the online world abuzz with praises (or merits) of debt consolidation services, it might as well be pretty easy to think that consolidating all your different loans under one umbrella loan remains your only answer to all your debt woes. But on deeper contemplation, it might as well be not that a “good idea”. However, it does not mean that you can absolutely rule out the possibility of settling for these services as well. Weighing the pros and cons of this practice, would remain key.

The failure to repay a consolidation loan might as well cost your home. Opting for them only makes sense when you end up paying lesser rates of interest than you were paying before. However, before delving in to its complex pros and cons, let’s understand a bit about its basics. If you are grappling with multiple loans at the present, then you can effectively combine them together, so that the new rate of interest is lower than what you had been paying before. The consolidation loan provides you sufficient money so that you can pay off your remaining debts and owe money to just one lender. Besides lower interest, another major merit of these debt services is that they make it easier for you to keep track of your loans. They can generally be secured on home loans. However, you must be particularly on your guard against a heavier debt burden.

Student_DebtThe Scary Stats

In the year 2009, in a post in the website www.daveramsey.com, the writer went on to say:

“A friend of mine works for a debt consolidation firm whose internal statistics estimate that 78% of the time, after someone consolidates his credit card debt, the debt grows back. Why? He still doesn’t have a game plan to either pay cash or not buy at all. He also hasn’t saved for “unexpected events” which will also become debt.”

What you can do

Yes, that exactly is the point. Debt consolidation will simply not put you in a good stead if you are not able to adjust your spending habits. It’s going to remain as potent a curse as did your previous loans if you continue with your “overspending” and “under-saving” tendencies. Additionally, if the overall amount that you’re going to repay increases in the long term then you should seriously consider against settling for these loans as well. If you are really sure that you can improve upon your previous financial conditions and afford to repay the loan at the end of the day, then you can opt for them.

It might as well be a little difficult to find these loans today, as they were primarily marketed during the financial crisis a few years ago. But now, there are very few, who actually lend them.

Though the monthly interests are lower, the repayment period might be much higher- as a result of which you might end up paying much more in the long run. So, if you can transfer all your present debts to a low interest or 0% balance credit card, there’s simply no reason for opting for the debt consolidation services. However, your credit rating will play a major role in determining chances of your qualification for these low-interest credit card debts.

 


Why should you Borrow to get ahead when using Debt Leverage?

Why should you Borrow to get ahead when using Debt Leverage?

People borrow money for every reason. Whenever they need money, they look towards banks, friends or financial institutions to help them. However, the reason for the loan is not always justified. People take loans for all sorts of crazy reasons – a party, an outing and other unnecessary expenses. These reasons might be unjustified; however, there are some really genuine reasons that call for one to go under debt.

Debt looks unnecessary, but there are cases where there is no way out but to take a loan. Some of those conditions are given below, explaining when and why you should borrow money to move ahead in life.

To Save Your House

A great number of houses are mortgaged in the US. People are living in the fear of losing their homes to their lenders. This is one thing that scares all home owners. If you are facing the risk of foreclosure, then taking out a loan to paying back your debt is a good option.

However, this is not the only option that one has in such situations. One should always seek help from a lawyer who specializes in such cases to find the best option out of this situation. One more thing to remember is not to make the same mistake of putting another property on the line to save one property, as it will not do you any good.

Almost, all the banks will require some kind of collateral to give you a loan; however, some companies or lenders might be willing to give you a loan to save your house on certain conditions. This option should be used when you are sure that you will not end up in trouble.

Investments

If an investment opportunity comes your way that can benefit you, then taking out a loan is a good idea. Risks are important in life and one can never move ahead in life without taking risks. However, one thing that is important is to minimize the risks involved. This isn’t easy but one should be able to do it before opting for loan.

Foresightedness is required as these are very major decisions and cannot be made in haste. You can consult a professional or your friends to make sure the step you are taking is worth it. Not every investment gives the desired returns and can at times put you in serious financial trouble.

One more thing that you will need to do is find the difference between the profit you will earn out of the investment and the interest you will pay on the loan. If the profit isn’t more than the interest, then the option is pointless and something that should be totally avoided. However, if good returns are guaranteed then this is the best thing to go for.

Debt Consolidation

Debt consolidation to pay down higher interest rate loans is a good reason for taking out a loan, especially if you are sure you can manage it well. If you are already burdened with a loan that required you to pay huge interest, it is a good option to take a loan from a friend or a bank that is giving it at a lower interest rate so that your burden is reduced.

However, it should be managed well as it can, like any other loan, cause problems. Also, when you go for this option, make sure the terms and conditions of the second loan are friendlier than the former one, because if they are the same then going to another lender will not be a good idea as it will not help you in any way.

Education

Loan for education is usually acceptable; however, it depends on many factors. Firstly, consider whom you are going to sponsor for education, and if the person is worth it. There is no point in taking out a loan for someone who isn’t good at school, as the person probably will have difficulty finishing college, graduating, finding a job and then paying back the loan. However, this is very difficult to conclude due to the desire and importance of getting educated.

Many institutes and colleges have their own debt programs that are often interest free to promote education. This option should be considered as it can be of great help.


What Is Debt Management?

What Is Debt Management?

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If you are like 70% of all Britons, at some point in your life you will hear this term, debt management.  You also may hear terms such as IVA, DMP, and bankruptcy.  But what is debt management, debt management plans, and things such as IVA, DMP????

Jon at debt management company said that he has seen an increase in the number of people looking into debt management plans and IVA’s mostly due to being made redundant and also the increased cost of living.  As the cost of petrol and food and heating one’s home has increased, people have less money to service the debts they have, it is at this point they seek advice as to what they can do.

We all know, or most of us know of bankruptcy.  When you are insolvent, meaning your liabilities exceed your assets, which basically means you cannot afford to pay your bills and debts, you can go bankrupt.

But what if you want to avoid bankruptcy, for whatever reason.  Maybe you have a property that you don’t want to lose and would lose if you were to go bankrupt, or maybe you feel a moral need to try and pay back your debts.  What can you do??

Debt management, that’s what you can do.

Debt management is basically a term used to manage one’s debts in a manner that you can afford, not what your creditors or banks are telling you to do, but in a way you can afford to repay them.

For example let’s say you have a few credit cards, an overdraft, and a personal loan all of which total about £15,000.  The accounts are in just your name, you own a property, and have been paying all your bills just fine.  Then one day your line supervisor advises everyone at your job that business is slow and work hours are going to be reduced.  You suddenly are earning less money and now cannot afford to pay all the minimum payments on your loans and credit cards.  You struggle and start to fall into arrears.  the banks are phoning you or worse yet, collection agencies are ringing and asking for money, money you just don’t have.

What can you do?

Get advice on various debt management options that are available and you qualify for.

So what are the options for our imaginary friend with 15K of debt, a property, and not enough money to pay what the banks and collection agencies are asking for?

What our friend can do will depend on a few factors, one is the amount of debt they have, which we know is £15,000.  The next factor is how much can they afford to pay, not how much the banks and collection agencies want them to pay, and lastly, is there any equity in their property??

How it is figured out as to what our friend can afford to pay is done by a detailed income and expenditure form, which is competed by the assistance of a profession adviser.  Our friend could do this himself, but not being a pro at this and it not being their usually job, it is best to seek profession advice.

In this income and expenditure form, our friend’s wages are listed and any other income they may be receiving, tax credits, etc.  The form also shows all their outgoings and bills, things such as their mortgage payment, council tax, electricity and gas, and other fixed monthly expenses.  Then an amount is allowed for food, petrol, insurances, and any other monthly expenses our friend may be experiencing.  This I&E does not include any of their debts or accounts, credit cards and the such.

Then what our friend has a surplus, after their living expenses, is what is used to determine what will be paid to the creditors, and it will also dictate what form of debt management will be best for them.

The adviser will also look at our friend’s property, not physically go and view it, but ask if there is any equity in the property.  This also will help determine what form of debt management is best suited for our indentured friend.

If they only have a small amount of surplus, say £150, then bankruptcy or a debt management plan/DMP are options.  However if the property has equity in it, then bankruptcy may not be a good option as our friend could lose his house if they were to go bankrupt.

If there is no equity, and our friend has no real surplus, then bankruptcy is an option, although they could still consider a debt management plan.

If our friend has more then £150 as a surplus of income, an IVA or individual voluntary arrangement is an option.  An IVA would allow our friend to repay the debts in a manner they can afford, and also preserve the property, but if there is equity, in an IVA a portion of any equity is to be released at the end of the IVA.

Basically here is how both forms of debt management work:

Debt Management Plan/DMP:

*offers flexibility in the monthly payment, you pay what you can afford

*works for people who have a large amount of equity in a property, more equity than their actual unsecured debt

*no minimum amount of debt is required

*not a formally binding agreement, creditors do not have to accept the proposal, they will take the payments you make, but can still chase you for more

*  can be a good short-term option if you know your circumstances may change

*can be a stepping stone to later do an IVA

*no reduction in the balances on the accounts, you pay unto the account is paid in full

*creditors may not freeze the interest

Individual Voluntary Arrangements/IVA:

*Formally binding agreement with your creditors

*The accounts are frozen so no new interest or charges are accruing

*A way to preserve property as in bankruptcy you may lose the property

*Is a five (5) year term, at the end of the five years you are debt free

*Need a minimum of £15,000 of debt

*Creditors reduce the balances on the accounts, you pay back a pence on the pound percentage

*A formal arrangement with your creditors, they agree to accept the payments you can afford and you are not chased for any additional payments

So as you can see each form of debt management has positive aspects about it, and for those looking to avoid bankruptcy, some form of debt management hopefully will fit their set of circumstances.


What are they and what are the differences between debt consolidation loans and debt management

What are they and what are the differences between debt consolidation loans and debt management

A friend of mine had recently mentioned to me about the confusion between what is a debt consolidation loan and what is debt management.  This didn’t really surprise me as many consumers, borrowers, debtors, etc, can be confused by the various loan products and banking/financial terms used today.  Basically unless you are in the banking industry, or a debt adviser, you may not fully know the differences between these two very different options.

Debt management is where someone may be struggling with various credit cards, overdrafts, loans, etc and can no longer service the debts in accord with what the accounts or their creditors are asking for payments each month.  So the debtor, seeks help and assistance via some other form of repayment, usually through a third party, in managing the debts through alternative means.

This assistance can be in the form of a DMP/Debt Management Plan, or possibly an IVA/Individual Voluntary Arrangement.

Debt consolidation is where someone may take out a loan to consolidate, or pay off the smaller loans and credit cards they may have.  This gives them one monthly payment, and in some instances a lower monthly payment, than what they had previously been paying to the smaller multiple accounts.

Debt management is not a form of a loan and no money is lent, whereas debt consolidation is a loan that is applied for from a bank or lender and can be granted or denied.

In debt management you are usually in arrears with a loan or credit card and this has affected your credit, and by being in some form of debt management, this also affects your credit.

Debt consolidation does not affect your credit, and you may have poor credit prior to receiving the loan, but for some people, the deb consolidation loan itself may help to improve their credit.

Both, debt management and debt consolidation allows you to make one monthly payment instead of multiple payments.  With debt management the monthly payment is based on what you can afford and again impacts your credit.  In debt consolidation the monthly payment can be less than what you previously had been paying to the multiple accounts, and it doesn’t have a negative mark on your credit. The debt consolidation payment is based on how much you are borrowing, the interest rate, and for how long you are borrowing the money.

So in discussing this with my friend, I asked him how he determines which option is best for his clients.

He stated, if someone is currently in arrears with their credit cards and accounts/loans and possibly has experienced a major change in their finances, hours cut at work, made redundant, etc, and then debt management may be a stronger option for them.

If they are just looking to reduce their monthly outgoings and want to budget a bit better, then a consolidation loan may be a better option for them.

If their credit is already showing late payments and defaults, then a form of debt management may be the way to go.

If they are concerned about your credit rating and want to maintain it, then debt consolidation is what they may want to look more into.

So there you have it, straight form the horse’s mouth, so to speak, not only the difference between debt management and debt consolidation, but also a professional’s advice on which may be best suited for someone.


5 Top Tips To Stay Out Of Debt In 2012

5 Top Tips To Stay Out Of Debt In 2012

Heading in to 2012, millions of people will strive to keep their New Year’s resolutions. Many have set goals to lose weight, others to achieve a career goal, yet probably the most important resolution that we can make, is to get out of debt and stay there.

In most cases, staying out of debt is simply a matter of budgeting and self-discipline. The best rule to live by to avoid getting into debt in the first place is this: If you can’t afford it, don’t buy it!

These are great words to live by, but not always easy to apply in everyday life. Retailers encourage us to shop, offering easy, in-house financing to purchase large ticket items that we really can’t afford. They seduce us with low monthly payments, but neglect to mention the finance charges, which considerably increase the amount we actually repay. This is where self-discipline comes in: resist the slick sales pitch.

The following 5 tips will help you to avoid falling into the debt trap, and keep you on track for 2012:

1. Live Within Your Means

For some people, this is the Mt. Everest of personal finances. It can be difficult, especially if you have never applied self-discipline to your spending habits. If you are serious about staying out of debt, the key is to spend less than you make. This may mean cutting out that daily mocha cappuccino, the impulse purchases when shopping, or cooking instead of dining out. Review your spending habits to see where your money is going, and to determine areas where you can save.

2. Will That Be Cash Or Credit?

Credit card companies make it easy to overspend. After all, you can charge it now and make monthly payments, right? Not so fast! Before slapping that plastic on the counter, consider the total cost of an item, including interest charges, in case you end up carrying a balance. By paying cash, you will avoid the temptation to overspend.

3. Pay Balances In Full

Many credit cards offer great reward programs where you can earn air miles, cash back, store credits and many other perks. The trick to taking advantage of these programs, is to charge only what you can pay off each month. This way, the credit card company is paying you to shop. Enjoy the rewards!

4. Lock Up Your Credit Cards

If you are one of the millions of people who has a hard time resisting impulse buys if you have plastic in your wallet, then by all means, take it out! Lock your cards away and resist the urge to take them with you when you leave the house. If you don’t have them handy, you can’t use them, right?

5. Create A Budget You Can Live With

To stay debt free, you need create a budget you can live with – and stick to it! Working within your income, be sure to include all regular expenses, designate a set amount to put in savings each month, and leave a little to spend.

Apply the principles we have outlined here, add a liberal dose of common sense, and you can stay out of debt in 2012!

About the Author
This article was written by Phill representing CompareLogbookLoans.co.uk – an independent financial website bringing together and comparing available log book loans.


Top 5 ways to consolidate your debts

In the current financial climate a huge number of us are lumbered with a range of debts that, quite frankly, we could do without. Whilst there is little that we can do about actually having to repay the debt, many of us are able to make debt repayment a little easier on ourselves by looking at consolidation as a means of reducing the number of creditors we pay and even reducing the amount that we are paying.

Debt consolidation is where you pay off a number of smaller debts by taking on one larger debt. Whilst this may seem as though it is pointless, it can actually benefit you in a number of ways. Consolidation could reduce the hassle and time involve with debt repayment by reducing the number of creditors that you have to pay. It can also reduce the amount that you pay on your debts each month, thus easing the strain on your finances.

There are a number of options that you can look at when it comes to consolidating your debts. This includes:

Credit card transfers: If you have a number of high interest credit cards with outstanding balances on you could benefit hugely by transferring all of these credit card debts onto one interest free 0% balance transfer credit card. This would enable you to enjoy a generous period of interest free credit within which to clear the transferred debt. If you feel that you need longer to repay the combined credit card debt you can consider a low interest life of balance transfer card instead, which will enable you to enjoy a very low rate of interest on your transferred debt until it has been paid off. By doing this you can get rid of your variety of high interest cards and have just one low interest or interest free credit card debt to deal with

Secured loan: If you are a homeowner and you have some level of equity in your home you may be able to borrow against your equity and use the money to pay off your existing debts. You will then have one secured loan to pay off rather than a range of smaller loans, credit cards, overdrafts, store cards, etc.

Unsecured consolidation loan: For those who are not homeowners or do not wish to borrow against their home, an unsecured consolidation loan could be another option. You will generally need to have a good credit history in order to get an affordable unsecured loan, particularly in the current climate. However, if you are able to get a competitive personal loan this could be an ideal solution to wrap up all of your smaller debts into one larger one

Speak to creditor if your debts are with one creditor: If you have a range of different debts with one creditor, such as your bank, it is worth speaking to the creditor to see whether they can suggest a suitable and affordable solution whereby you can consolidate your credit cards, bank loan, and overdraft into one. If you have a good credit status and you have been with your bank for a long time you may well be able to get a good deal on a consolidation loan

Friend or family member: Of course, not everyone will be able to consider solutions such as consolidation loans from banks or interest free credit cards. In fact, those with damaged credit will struggle to get any form of consolidation loan in the current climate. Another option is to see whether a close friend or family member can help you out by lending you the money to pay off your debts and accepting monthly repayments for you until you have repaid them.

Esther blogs regularly about personal finance and consumer issues. She also writes about working from home and financial issues affecting freelance workers, from managing taxes to setting up an umbrella company


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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