Loans can lend you a hand

What do you do when you look at your household paperwork one day and realise you're up to your eyeballs in plastic? Credit cards, debit cards, store cards…It's just all too confusing!

A loan could be the answer to your problem. Taking out a loan is an easy way to get all your different card debts under control and into a single monthly payment.

Go through all your most recent statements and add up the balances of all the cards you owe money on. Include any overdrafts too, as these can be just as potent as your cards.

Once you have your total debt amount, you know how much you'll need to borrow, and you can start looking at different loans. The type of loan you go for will depend on a couple of things. If you are a tenant, or the amount owed is under £5000, you may want to apply for a personal loan. These tend to be available mainly to people with good credit ratings, so it may be worth obtaining your credit file from Experian or Equifax first.

For homeowners who need to borrow more than £5000, secured loans could be the answer. These take your home as collateral, meaning if you default on payments the lender is legally entitled to take your house to cover the amount you borrowed. It stands to reason that if you get a secured loan, you really need to make sure you can afford the payments!

Once you've decided on the type of loan you need, shop around. If you have bad credit, try not to make too many applications for loans as each one will show up on your file as a refusal.

Once you have your loan and paid off your cards, cut them up! Leave one if you wish for emergencies, but don't be tempted to keep them all 'just in case'. Keep a closer eye on future finances so 'just in case' never arises.