Want to stop juggling debt?
The low-down on debt consolidation
Debt consolidation might sound scary, but in reality it could be a good solution. If you’re juggling debt, you’re probably also dealing with more than one repayment every month. You may be committed to multiple finance agreements. That could be both confusing and hard to manage.
Debt consolidation draws all your debt into one place. The result is you know exactly how much you owe. Knowing the size of your borrowing makes it easier to make a plan to get rid of your debt. Debt consolidation could allow you to regain control of your finances.
When Debt takes over
Debt has a habit of taking over. What can start as one credit card bill can easily expand into a rolling credit card debt, a loan, or even an overdraft. One of the biggest challenges of short term debt is that because it’s unplanned for, it often carries high interest rates. That means the cost of your debt is high and it can be hard to reduce the amount you owe.
How much a month?
When you’re repaying more than one debt, the monthly repayments can quickly add up. Even if you’re only making minimum payments they could become more than you can afford. What seems like a reasonable amount to repay when you look at one debt; can rapidly become unmanageable when you multiply it by three.
Are you keeping track?
Managing more than one debt doesn’t just mean you have to deal with high repayments. You also have to be a wizard at staying on top of your repayment schedule. With different debts you’re probably managing payments at different times across the month. Missing payments can impact your credit record so it’s important to never lose track of what’s due and when.
Keep it together with debt consolidation
If you want to take control of your debt then debt consolidation is a good starting point. Bringing your debt together into one loan will ensure you only have one monthly repayment bill. That means you know exactly when it’s due and you can be sure you don’t miss it.
No more unplanned for rate rises
A second benefit of debt consolidation is your ability to plan how much you will repay. Loans usually have fixed interest and fixed repayment amounts. You can start by making sure your repayments are affordable; then you can be sure you’ll be paying off your loan and working within your budget.
Relax, you’ve got it covered
Managing your debt in one place is just simpler. By consolidating your debt you can lose the stress of managing multiple repayment amounts, dates and the risk of increased costs if your interest rates are increased. That means you can get on with life without your debt taking over.
One personal loan is a good solution
Consolidating your debt into a personal loan could be the right solution for you. Then you could focus on getting rid of your debt rather than just keeping up with the payments. You can also make sure it works with your budget, giving you a chance to save for future expenses and avoid going into debt again.
A change for the better
If you’re able to move forward with debt consolidation it’s a good idea to cancel your other credit. That means closing or reducing the limit on your credit card, getting rid of your overdraft and paying off any other outstanding loans. Avoid the temptation to start creating debt on these facilities once you’ve consolidated elsewhere. Debt consolidation should give you the opportunity to reduce your debt and get it under control.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure the content is correct, the information provided is subject to continuous change. Please use your discretion and seek independent guidance before making any decisions based on the information provided in this article.