Manage my over draft, personal loans

It’s easy to find yourself owing money on credit cards, but it’s not so easy to find a way out of debt. Balances can build-up quite quickly and the money owed can become extremely difficult to repay.

Different kinds of debts are not always included in a debt relief plan, like an agreed debt management plan. You need to talk to a debt advisor to find out exactly what can be included.

It’s not considered very wise to upload your overdraft on your current account for a long period of time because this can become a very expensive way to borrow long-term. Short-term, it could provide a quick solution, without the need to upload a credit card or apply for a loan.

If you find it hard to be approved by banks for a loan or credit card companies, then the Consumer Credit Counselling Service has noted that often people who don’t hit the criteria for applying tend to use their overdraft and incur higher fees.

Overdrafts As Debt

Manage my Over draft, Personal Loans - Debt Consolidation LoansOften people don’t consider overdrafts as a debt, because they think that they’ll clear it with a next salary payment. This then rolls onto the next month and may never get back to zero and charges are accrued each month. Debt advisors suggest to include this into a debt management plan as overdrafts do qualify and can be considered within a plan. You may have to open a new bank account, but this is easy to do.

Manage my over draft, personal loans explained further.

If you enter into a debt management plan, you are able to use any new overdraft arrangements you have with a bank, but this will possibly reduce the amount of cash available to repay other debts because of the increase in interest expenses. This could make the payment period of a debt repayment term longer and it may not be received well by existing creditors. If you have a joint account then it might be worth considering that the other person could take control of the overdraft and interest payments while you have a debt plan in place.

Debtors question whether personal loans can be taken into account

A loan to buy a car is a grey area. An unsecured personal loan could usually be included. These are the kind of questions around a debt management plan as to what type of loan can be included.

If the original loan was secured with an asset i.e. car, then it may probably have to be paid in full, as agreed at the time, to avoid the vehicle being repossessed. This is quite usual for this kind of hire purchase agreement loan.

You can take a look at the paperwork you originally signed in order to workout the type of loan you originally signed up for. Show your debt advisor for expert advice as to what type of loan you signed-up for. Some mortgage lenders included big, unsecured loans, to mortgages, prior to the financial crisis. A mortgage is usually secured, but if there’s a loan attached, it might not be. You’ll need to check all this out with your debt advisor as to whether it can all be included into a debt management plan.

If you have a joint personal loan, the lender could ask the other person for a full repayment, so this can be questionable as well if it can be included within a debt management plan. The best thing to do is to talk to a debt advisor to help you workout what you can and can’t do when you have complicated situations.  You may also be able to include some lending from family and friends into the plan, if you are able to.

We offer Debt Consolidation Loans for homeowners.

Our team is on hand to help with number of questions you may have.

If you are struggling with debt, please visit Money Advice Service for help and advice.

We are a broker, not a lender.

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