Personal Debt VS Public Debt
Personal debt is through buying goods, not with cash.
Using something like a credit card or taking out a loan, like a car loan, mortgage, etc.
Public debt is money borrowed by the UK government, which was beyond £1trillion in the first quarter of 2012. Raising taxes might help to reduce this, but otherwise, there’s not many other ways to reduce this. However, in personal debt, people can try to control it. As mentioned, this debt is down to credit card spending, car loans, etc.
In comparison to public debt, personal debt is now rising in August 2012, the personal debt stood at £1.412 trillion, unsecured debts are £156 billion of this amount.
In 2012, UK debt is just below £6k, on average, per household, excluding mortgages. It may seem as though the personal debt has a hold upon you, but there are some easy ways to try to illuminate it, one recommendation is to look into debt consolidation.
Debt consolidation loans take all your debts and creates one affordable monthly payment. It features the opportunity to pay off existing debts, transfers the amount owed into one single loan, which may have a lower interest rate and stretched across a longer payment period. There are many financial tools available online which may help you to look into debt consolidation loans.
Credit ratings could ultimately improve, if you pay the loan off, never miss a payment and clear the entire amount. It’s an option to create debt consolidation if you have many credit cards and store cards, as they typically have high-interest rates. A debt consolidation loan often has a lower rate and has a more extended period of time to pay it off.
You’d need to fit an initial criteria to establish if you are able to even apply for a debt consolidation loan. If you have a bad credit history and a huge debt, then you may only be able to apply for a debt consolidation loan, if you put an asset, like your home, as security against the loan. If miss your payments, then you may lose your home – so be very careful when considering this as an option. Whereas an unsecured loan is based on a written contractual agreement and does not have an asset secured against it.
It is fair to say that debt consolidation management companies will be in more demand in the future, especially as it was reported that the first quarter of 2019 household debt was expected to reach £2.044 trillion.