Are rising debts giving you a headache? The pressure associated with mounting debt can be extremely difficult to cope with and if your debts have resulted in your credit score taking a hit, you may find that your financial options are limited.
In the article below we discuss how applying for the right type of loan can help you to get rid of your outstanding debts, once and for all.
Are you under financial pressure?
If you are worried that your debt is beginning to spiral out of control and it is becoming more and more difficult to pay your bills at the end of each month, the time for action is now.
Debt is not just a financial issue, it impacts all elements of your life but the good news is that there are steps which can be taken to provide a clear pathway towards reducing and ultimately clearing your debt.
Before taking your journey towards a debt free life, you must first identify exactly which type of debt you have. By reading the Martin Lewis article below, ‘Are you in Debt Crisis?’ you will be able to gain a better understanding of your current debt situation and will then be in a position to move forward:
Bringing debt under control
One of the biggest problems surrounding debt is that it rarely builds in one place at a time. 2 or 3 mounting bills coupled with an unpaid overdraft and a personal loan, all with mounting interest rates can soon result in a relatively small debt growing to a stage where it is unmanageable.
Making minimum payments on credit cards will not make a dent in a large debt and therefore finding a way to bring many outstanding debts into one place, with just one attached APR, offers an excellent way of bringing debts under control. The method of managing debts is known as ‘debt consolidation’.
It was not too long ago that because rising debt often coincided with a declining credit rating, trying to borrow enough money to pay off a number of different lines of credit was almost impossible.
However, thanks to a number of forward thinking lenders, this option is not only available, it is realistic.
Typically available for sums of up to £10,000 which is repayable over up to 5 years, there is now a financial product which offers the following benefits.
- Reducing the number of creditors you have to deal with
- Reducing the overall level of interest which is repayable
- Reducing monthly repayments to a level which you can afford
- Avoiding further damage to your credit rating (IVAs and bankruptcy damage your rating).
Long term solutions
Whilst some debt solutions may offer a quick fix, typically they will just paper over the cracks whilst the problem continues to get worse underneath, an effective long term solution can help to turn around your finances.
By ensuring that all outstanding debts are repaid using the money that you have borrowed and then making the repayments as quickly as possible (whilst not building new debts in the meantime), you have a realistic opportunity to become debt free
As well as offering the chance to help you to repay debts, using the borrowed money wisely will also allow you to take positive steps towards re-building a damaged credit rating.
Two of the most important aspects of a credit report relate to decreasing overall debt and demonstrating an ability to make repayments on time and in full. By adopting a debt consolidation mindset, you will be able to do both.
For more tips on re-building your rating, please check out the article below entitled ‘The New Way to Rebuild your Credit Rating’:
Taking the next step?
If you are still a little unsure whether debt consolidation is the right step for you, the following Economic Voice article outlines 6 things which should be factored into the decision making process.
How bad is your rating?
The only way to find out how much damage rising debt has done to your credit rating is to obtain an up-to-date report. However, did you know that each CRA (Credit Reference Agency) is likely to have a slightly different rating for you?
The easy way to avoid this is to visit Checkmyfile. As the provider of the UK’s only multi-agency report, they offer a number of cost effective methods of accessing your current score.
Taking the hard work out of finding you a quick loan
If you would like to work out whether our financial products offer a viable debt consolidation tool for you, simply use our calculator to work out how much you can afford to borrow and then use our application form to contact several of the UK’s best lenders simultaneously to receive a variety of no obligation offers.