Debts and Debt Consolidation
Did you gasp the last time you looked at the list of Direct Debits in your bank account?
You’re not alone. It’s not unusual for people to have multiple streams of debts, all of which have their own repayment plans and corresponding Direct Debits or standing orders.
The more debts you have, the more chance you have of accidentally missing repayments or becoming so overwhelmed with the combined debt that you decide to brush it under the carpet.
If any of these situations feel familiar, we’ve got some good news, and it comes in the form of a debt consolation loan.
Debt consolidation loans enable people to combine all of their existing debts into one, single monthly payment. The company (i.e. us!) that organises the consolidation loan undertakes all of the fiddly bits with lenders by settling the debts individually and providing you with just one debt to pay off.
That means the end of multiple Direct Debits and very little chance of you accidentally missing a vital repayment.
But, which debts can be consolidated into one loan? Here’s five of the most common.
1. Credit card bills
Credit cards aren’t the terrible, evil things they’re sometimes made out to be. When used correctly and paid off regularly without accruing interest, they’re a smart way to shop.
Despite this, it’s relatively easy to fall into credit card debt – and multiple credit card debt at that. You’ll know, deep down, if you’ve overspent on the plastic and need to address those balances.
2. Store cards
Store cards can be tempting – mainly when they offer discounts for purchases at the time you sign up.
However, they typically have colossal APRs and hefty penalties for non-payment. Getting on top of them as soon as possible is therefore highly advisable if you can’t afford to pay off the balances in full.
3. Utility company debt
Life’s essentials (gas, electricity and water) all come at a price, and the prospect of being without them for any period doesn’t bear thinking about.
When you fall into arrears with a utility company, it can feel like an almost impossible trap to get out of. A debt consolidation loan will enable you to address such debt without fear of being cut off.
For most of us, a home is the biggest purchase of our lifetime. That means it comes with an equally large loan, and if you fall into arrears with your mortgage the roof can literally be taken from above your head.
Thankfully, mortgages can be used to secure debt consolidation loans, which makes them the perfect vehicle for anyone who wants to manage their debt more smartly.
5. Car loan
Getting the car you’ve always wanted often means reaching out to a bank or the car dealership for a loan. And that’s fine – providing you can keep up with the repayments.
If your four-wheeled companion is becoming increasingly burdensome each month due to the PCP repayments, a debt consolidation loan could be your knight in shining armour.
There are plenty of other forms of debt that can be consolidated. If you think you have obligations that could be eased by this type of loan, why not get in touch with our friendly team today for a no-obligation chat?