Post-Christmas Debt Blues?
So you budgeted for Christmas, did the best to stick to it, and still worried about how you’re going to afford those credit card bills that could hit your letterbox at any day now?
Well, don’t. Worrying about your debt problems isn’t going to solve anything, but taking action will. If your debt was quite small pre-Christmas and you have overspent during the holiday season, you may only need a debt solution like a debt consolidation loan.
How does debt consolidation work?
Consolidated loans work well if you have multiple debts to several creditors and the interest rates are getting out of hand. You should first tally up the total cost of all your debts, then start looking for a loan with a low interest rate that can cover the amount you need. Once you have gotten your consolidated loan approved, you use the money to pay back all your individual debts and concentrate on just paying back the consolidated loan.
How would a debt consolidation benefit me?
The purpose of the loan is to give you a lower interest rate, smaller monthly payments, as well as reduce the amount of stress that comes from paying and negotiating with multiple creditors.
How do I know if consolidation is the best debt solution for me?
Debt consolidation is best suited for smaller debts. If your debt is over £10,000 you may be better off with a Debt Management Plan or IVA (Individual Voluntary Arrangement). If you’d like to get advice on if a consolidated loan will help you become debt free, contact the Debt Advice Trust today.
