Debtconsolidation asked:


olidation UK

Debt consolidation UK is when you combine your outstanding debts into one UK Debt Consolidation Loan which usually a lower interest rate and therefore could lower monthly repayments.

A Debt Consolidation Loan UK does mean that the debt will be secured against your home, so it is not right for everybody. But, you may find that this form of Debt Consolidation UK is the right solution to your debt problems.

UK Debt Consolidation is increasing in popularity, which is no surprise as the level of personal debt in Britain is also on the increase. Recent reports show that personal debt is growing by £1 million every eight and a half minutes, with this debt figure showing no sign of slowing.

Debt Consolidation: UK Benefits

Debt Consolidation involves paying off your unsecured debt with a single debt consolidation loan, meaning that you have just the new loan to pay, instead of multiple UK debt. Consolidation often means that your can benefit from a lower interest rate as the new loan will be secured against your home.

If you have multiple debts then you could benefit from Debt Consolidation. UK lenders understand the problem that many people have in trying to afford multiple debts which is why UK debt consolidation loans are available.

To summarise, the advantages of a Debt Consolidation Loan UK, could include:

1: Reduced monthly payment.

2: Lower interest rate than your unsecured debts.

3: Only 1 creditor.

4: UK Consolidation of your Debt.

What is Debt Consolidation UK?

Debt Consolidation UK allows you to combine your existing debts into one loan. This loan may be secured against your home so that you can benefit from a lower interest rate than your current unsecured debt.

Debt Consolidation Help

If you are interested in Debt Consolidation UK but you feel as though you do not want to get into any further debt, then no loan debt consolidation could be right for you. This is also known as a debt management plan and allows you to reduce your monthly payments to your debt.

The best way to see what debt consolidation plan is right for you is to speak with one of our expert Debt Consolidation UK advisors. They will go through your finances and help you to see which debt solution is right for you, there may be other alternatives which are a better solution to your debt problems.



Grace

WYN asked:


I am in a little over $45,000 credit card debt. I am trying to figure out if it would be better for me to use a consolidation company or to get a home equity loan.

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Jason Holmes asked:


Before you opt for a debt solution first, find out the best debt solution for you. There are different ways of debt solutions. Debt consolidation, debt settlement, bankruptcy are some of the important debt solution means that help you to come out of debt. Amongst the different debt solutions, debt consolidation is the mostly preferred one.

Basically, debt consolidation helps you in accumulating your multiple debts into one single debt, lowering your payable amount. The debt consolidation companies do this by negotiating with your creditors.

1. Waives off the interest rate:

Debt consolidation helps you to eliminate or reduce the interest rate. The debt consolidation companies bargain with all your creditors to reduce the interest amount of your debt. This way they help you to lessen your debt amount.

2. Single monthly payment:

If you have multiple debt payments, like credit card bills, utility bills and medical bills and is missing your regular monthly payments, debt consolidation is the best option for you. It saves you from becoming a defaulter. The debt consolidation program allows you to merge all your debts into a single debt and make a single monthly payment for all the debts you owe. The debt consolidation company will deal with all the creditors on your behalf. This would make your handling of debts much simpler.

3. Get rid of creditor calls:

The debt consolidation company not only consolidates your debt payments but also helps you to avoid creditor calls. Whenever you sign up with a debt consolidation company, they assure you to communicate with all your creditors on your behalf. As a result, the creditors stop calling you.

4. Sound credit score:

If you consolidate your debts, you can reduce your outstanding debts in a set out plan. Within a short span the consolidation company helps you to repair your bad credit and get out of all your debts. This way, by reducing your debt burden you can also raise your credit score to some extent.

Debt consolidation is an effective way to get debt relief. Online debt consolidation has become very common these days.



Leslie

lauren london asked:


I make about $55,000/year and I currently owe approx. $34,000 in credit debt alone. That’s not including my car and student loans plus I still have rent to pay etc. I do not want to file bankruptcy if I don’t have to. I also would like to stay away from consolidation. My credit is average considering I have a high debt to income ratio, but I pay my bills on time.
Today, I was told by a company that they have something called debt management. I’ve never heard of that, but they said unlike debt consolidation where they lower both your interest rate AND balance, all debt management does is get the creditor to lower the interest rate. I would pay a monthly payment to the company and a monthly fee and they would make my payment for me.
At this point, I can only make minimum payments and my balance is going nowhere…Should I give debt management a try?
What are your thoughts and please state why or why not. They said this will not negatively affect my credit score.

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lauren london asked:


I make about $55,000/year and I currently owe approx. $34,000 in credit debt alone. That’s not including my car and student loans plus I still have rent to pay etc. I do not want to file bankruptcy if I don’t have to. I also would like to stay away from consolidation. My credit is average considering I have a high debt to income ratio, but I pay my bills on time.
Today, I was told by a company that they have something called debt management. I’ve never heard of that, but they said unlike debt consolidation where they lower both your interest rate AND balance, all debt management does is get the creditor to lower the interest rate. I would pay a monthly payment to the company and a monthly fee and they would make my payment for me.
At this point, I can only make minimum payments and my balance is going nowhere…Should I give debt management a try?
What are your thoughts and please state why or why not. They said this will not negatively affect my credit score.

Kansieo.com

Amanda Hash asked:


Debt consolidation can save you from debt problems, can improve your credit score and save you thousands of dollars. However, not all debt can be consolidated and given that there are different consolidation programs you should check if the one you chose or the one that the agent chose for you is really to your advantage.

There are many reasons why debt consolidation may not be the right solution for you. Debt consolidation cannot solve debt problems for all kind of debts. Debt consolidation may be too expensive if debt has already affected your credit and you do not have collateral. And certain debt consolidation programs may be nothing but scams. Thus, you need to be well aware of what you are getting into.

Debt Not To Be Consolidated

For starters, you should understand than not all debt is suitable to be consolidated. The reasons for this are varied. Most subsidized loans already carry very low interest rates and thus, it makes no sense to consolidate those loans by using a more expensive loan. This is always true, unless of course what you need is to reduce the monthly payments by extending the loan repayment period.

There are many subsidized loans. Government loans for students, private loans for students, government loans for first time home buyers, government loans for starting businesses, government loans for research disciplines, etc. are just a few examples of subsidized loans that are not suitable for consolidation.

There are loans that being secured are not suitable for consolidation. Though refinancing can be a form of consolidation if other loans and debt are repaid with the exceeding cash obtained from a cash-out refinance loan, truth is that very seldom a home loan or home equity loan is included in a debt consolidation program.

Debt Suitable For Consolidation

Generally speaking only debt which is unsecured in nature and secured debt taken when your credit score was low (bad credit debt) is suitable for debt consolidation. The latter will be suitable only if your credit score has improved or if you can provide better collateral and thus obtain a more competitive interest rate.

Examples of unsecured debt are: unsecured personal loans and personal lines of credit, credit card debt, store card debt, pay day loans, cash advance loans, certain student debt, bank account overdraw agreements, bank pre-approved personal loans. All of these can be consolidated into a single loan or the terms negotiated by a debt consolidation agent.

Debt consolidation in the form of a loan carries the advantage of obtaining a single and lower monthly payment that will simplify your budget while you work on your expenses. Debt consolidation in the form of negotiation is also an excellent tool that can provide a solution by reducing rates, eliminating debt generated by interests or extending the repayment programs so as to make debt more affordable. And finally, both methods can be combined offering an excellent way of eliminating debt, managing finances and improving credit score in the same debt consolidation program.



Danny

thinkaboutit asked:


Question? What makes people keep using them when they see the destruction it is causing?

Many people, mostly younger folks and women, have so many credit cards they end up in severe debt and ruin their credit for many years to come. Credit card applications are mailed out by the tons and people keep activating them knowing the interest rate is or will be up to 20% or higher. Everyone needs at least one credit card and no more than two. You also need one revolving (department store) credit card to establish a good credit history. The limit on the credit card(s) should be no more than 10% of your annual salary and the revolving card half that. Always make a minimum of a double payment on all your credit cards and pay on the due date. Never ever be even one day late. The interest rate and late fees will destroy you. If you are experiencing problems the first thing you need to do is carefully cut the cards up and throw them away. If you can not afford to pay the total monthly bill attempt to get a consolidation loan to get out of debt. The monthly payment will be less than the total monthly payment of all your cards with a much lower rate. Some banks and credit unions will be willing to help you out if they know why you are taking out the loan. Financial debt can create so much strain it can even destroy your peace of mind and your marriage. Don’t fall into that trap.

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Dan W asked:


Is it possible for me to get a loan for some credit card debt? I have established credit and it is not the greatest but Im about 6,000 in debt with credit cards. I make about 2,000 a month take home and was looking for a loan so I can make one payment a month and pay off the high interest cards in the mean time. Any recommendations anyone?

debt consolidation loan

Janet Williams asked:


According to wordtracker, 1819 searches are made per day for the word debt consolidation while debt settlement or debt relief makes only 300 search counts per day. Do you think that all these people who are searching for this word actually want to do debt consolidation? My experience says that most of them want a debt solution. People feel that debt consolidation is the most commonly accepted debt solution.

Is the word debt consolidation misinterpreted?

If we look at Debt Consolidation Care some new members feel debt consolidation is all about settling debts, some feel it is about getting counseling and some feel it is about managing the whole debt. Some even feel it is about doing everything together to settle debts. Consolidation is “The act of combining into an integral whole”, so debt consolidation should be “The act of combining all fragmented debts into an integral whole”. There are different ways of debt consolidation; however, the most common way of merging all the debts is by taking another loan.

Is debt consolidation different from debt consolidation loan?

Yes, it is. Even Wikipedia confuses between “debt consolidation” and “debt consolidation loan”. Debt consolidation loan is about taking a new loan to repay your entire fragmented loan. This can:-



Make debts more manageable.

Sometimes reduce the average interest rate paid on fragmented debts.

Further reduce the average interest paid on fragmented debts if a bigger secured debt (like home equity loan, which will offer much lower interest rate) is used to pay unsecured debts.



Debt consolidation loan is a kind of debt consolidation. Sometimes taking a huge loan to repay your other loans is not advisable. In the absence of collateral attachments, it is seen that many reliable creditors refuse to offer a huge loan package at lower rates.

From a customer’s point of view, it is basically consolidating many monthly payments to one in a smarter way to save more and pay faster. This can be done even without taking a loan by using debt management program, which is again widely perceived as debt consolidation, as monthly payments are consolidated to one. Next section of the article will explain it further.

Why everything is perceived as debt consolidation?

What customer sees is one big monthly payment, which might be used by a law firm under different schemes to settle debts.

A law firm may use the money for an account basis suited solution, which may include:-



Debt Settlement: One account may go for debt settlement, so the company may sometimes accumulate the monthly payments to offer a lump sum.

Debt Consolidation Loan: Another account may be paid off using another loan.



So the perceived debt consolidation includes:-



Consolidating monthly payments to one.

Debt settlement.

Debt negotiation with the creditors.

Credit counseling.

Debt consolidation loan.

Debt management.

Debt portfolio.

Asset portfolio.

Budgeting.



When nothing works out the law firm helps the customer file a suited bankruptcy. Next time when you hear “debt consolidation”, remember it can be a perceived word for a mix of debt solutions.



Elmer

Ed Pearson, Debt Dr asked:


You’re sitting there one day, off from work due to the stress of your unsecured debts weighing heavily upon your shoulders. Suddenly, in the background noise from the TV you hear a fantastic deal - consolidate your existing debts into ‘one easy affordable loan’. You think wow, just what I need to get my debts under control and you get the sales blurb.

Sounds great doesn’t it?

Debt consolidation in the UK is not a new phenomena these days. It’s been around a while. Lots of people have taken out debt busting consolidation loans. So why is the amount of debt in the UK still rising so fast? And why are bankruptcies, IVA’s and debt counselling services stretched to their limits and running at all time high figures right now? Well people get sold on the advantages but I’d recommend thinking about the disadvantages too!

Advantages of debt consolidation UK

Well the interest rate normally comes down on the unsecured debt amount borrowed making the monthly payments easier to afford.

Your debts come under control quickly so the annoying telephone calls and letters from irate creditors stops.

Disadvantages of debt consolidation UK (this is the bit they don’t want you to think too hard about)

To get a debt consolidation loan usually requires some form of property. By consolidating the unsecured debts to your home some of the equity has now been lost. So what was once an unsecured debt now forms part of a charge over your property. Every legal advert in the UK selling this type of service will point out in the small print that your home is at risk if you fail to keep up payments on (this now larger) secured loan. So you’ve put more risk onto your property. I regularly meet people who have bought their house maybe 20 years ago for figures like £80,000 on a house worth £110,000 to find that a decade on they have a house worth (say) £180,000 with a new debt consolidated mortgage of £150,000. So they still only have a similar amount of equity in the property but also have a mortgage now nearly double in size!

Another disadvantage is that the term of the borrowing is usually increased. Well sometimes the debt consolidation companies in the UK will sell that as a benefit with a line like ‘you can take longer to pay your debt and allow yourself time to get on top of your borrowing over the coming years’. I find that an odd statement. You have doubled your mortgage in a decade and you have found yourself in debt but suddenly your spending habits will change and you’ll be debt free at some point in the future. What are your thoughts as you read that? Another interesting point arises here. Because the term is often longer, you will possibly end up paying much more of your hard earned money for that unsecured borrowing by the time you pay off your new secured lending.

Did the debt consolidation company ask what your lifetime ambitions are? You see, you may have got out of the immediate debt issues but you may just also have signed away the possibility of that early retirement / new car / that holiday to see your family down under too. You see, if the amount you are paying back is higher than you had budgeted for then you may need to work longer to achieve your dreams. Was this discussed with you?

Did you consider at least 6 solutions for getting our of debt trouble before you decided on your debt consolidation loan? Can the company you speak to even name 6 solutions for getting out of debt trouble? If not then you have ignored several other options that may have been more suitable for the financial position you found yourself in. It’s rare indeed to find loan and mortgage brokers that are fully trained in solutions to tackle insolvency and debt issues. They have their offering and will talk about the monthly repayment figures to demonstrate how you could be better off, but is it the best way forward? Well naturally, that depends on your situation.

A final word on debt consolidation in the UK

Now, I do believe that debt consolidation has its place but I also think that there could be more done to understand that there are other options for getting out of debt. Getting the right debt help and advice is essential. Look at the advantages and the disadvantages for each solution you consider for debt resolution and then make a more informed decision.

There are more options for getting out of debt trouble then most people realise, that includes debt consolidation but is not limited to just that course of action.

If you would like to know what the 6 solutions to debt in the UK are then you can get debt help and advice from Ed Pearson at Debt Dr.

This article does not constitute regulated advice. Please remember that any action regarding financial advice should always be taken only after considering the specifics of your own situation.

To find out more about Ed try, http://www.advice4debt.co.uk/debtquiz.htm

Ed Pearson is a Debt Dr offering debt help and advice to individuals and small businesses across the UK.

Whilst you may love the stuff he writes, you should only ever take action once you have considered your own set of financial circumstances with a professional. This article does not constitute financial advice.



Jennifer