Sainsbury’s Bank have estimated that the first 3 months of 2006 will see over half a million people try to sort their finances out with a personal loan, with a combined total of £5bn being taken out for debt consolidation.
TV, magazines and the web are flooded with adverts from companies touting debt consolidation loans as the solution to all your financial worries. Is consolidation a worthwhile strategy, or just a way deeper into the mire?
The Building Societies Association (BSA) have said that the 2005 level of deposits to savings and investments accounts of their members was the highest for 8 years, with a ‘net inflow’ of funds of over a billion pounds, in contrast to recent years of ever increasing debts.
A new report by a leading mental health expert has revealed that nearly half of UK adults have money worries that have caused actual symptoms of illness, both physical and mental.
Record numbers of people have been calling debt advice services in the first 2 weeks of the year, as traditional ‘January blues’ combine with record debt levels to leave more people struggling than ever before.
If you’re thinking about debt consolidation as a solution for your debt problems, then the Guardian Unlimited web site has a consolidation calculator" href="http://money.guardian.co.uk/calculator/form/0,1456,590748,00.html">Debt consolidation calculator which will help you see if consolidation is an appropriate strategy for you.
For smaller debts of a few thousand pounds or less, you can save a fair amount in interest payments by shifting the debt to a credit card which offers a balance transfer offer.
First introduced to the UK by Egg back in 2000, an introductory 0% deal lets you load up your credit card with debts from other places (overdrafts, other cards etc) and avoid paying any interest on the balance while the offer lasts.
Debt Management is a method of dealing with debts once they start getting out of control. It is not something to be undertaken lightly, as it can severely harm your ability to get credit in the future, at least until your debts have been cleared. However, people with problem debt levels often have impaired credit in any case, so this may not be an issue.
The basic process of debt management is to renegotiate your repayments to your creditors, with the aim of lowering the amount you have to pay each month. Often, a creditor will be willing to negotiate a lower repayment amount rather than risk you defaulting on the debt completely.