Davids Finance Corner

Most people these days don’t carry much cash.  Instead they carry plastic cards that are used to pay for those items and this means they are charging that cost.  Using a credit card is fine if you pay off your balance within a month or two but when you carry credit, you are just adding to your purchase as interest is tacked on.  High-interest cards are the worst and the only reason you have that high interest is because you are late on your payments.

If you have found your self deep in debt, then you can benefit from debt help that is offered online. If you just want advice, you can get that and if you want to learn about debt management plans and if you qualify, that too is an option.  Most of us will have some form of debt in our lifetime but as long as it doesn’t get out of hand, you are fine.

Financial burdens can make you depressed and not able to sleep at night.  This is no way to live so why not stop avoiding the problem and take that first step toward freedom from all those unsecured outstanding debts?   Once you understand your options, you are able to make an informed decision on how to handle your debt.

Consolidating your debts into one monthly payment with a debt consolidation loan can be a great way of simplifying your finances, making unsecured debt repayments generally easier to manage.

There are a number of advantages to taking out a loan like this. However, you should consider whether it is the right option for your finances at the moment before applying, as there are some potential disadvantages you may not have considered. You can get further debt advice now if you like.

Debt consolidation loan advantages

• If you find a debt consolidation loan with a lower APR (Annual Percentage Rate), you could lower the amount you pay back overall.
• If you spread the loan over a longer period you could lower your monthly payments, freeing up money in your monthly budget.
• Having only one debt payment every month should make your budget easier to manage.
• You’ll only have to deal with one lender instead of many, which should be less stressful.
• As you’ll only be making one monthly payment, it should be easier to avoid running into arrears or running up charges for missed payments.
• With many debts, it’s difficult to know exactly when you’ll be debt-free. With one unsecured loan to worry about, you should also have a clear idea of when you will clear it.

Debt consolidation loan disadvantages

• It’s not always possible to find a debt consolidation loan with a lower APR. The rate you get will depend on your provider, your credit history, the amount you borrow and whether the loan is unsecured.
• Spreading your debt consolidation loan over a longer period will increase the amount of interest you pay overall.
• You must make the same payment every month – there is no flexibility. So if your income changes from month to month, a debt consolidation loan probably isn’t for you (you might be better off continuing to repay a credit card debt, for example, as you’d have the option of making just the minimum payment when necessary).
• Be aware that freeing up credit cards with a debt consolidation loan can tempt even those who are really strict with their money to borrow more.

If you’re already struggling to make your debt repayments, there are other ways to deal with debt that may be more suitable, which you can find out about when you visit debt advice now.