The figures keep fluctuating year upon year, but the sad fact remains that the average household in the UK is in debt to the tune of £9000 - £11,000, and that's excluding the mortgage. What's worse is that it seems to be spiralling out of control, with more and more people getting into debt every day.
Every day we're bombarded by TV adverts offering credit cards, loans and umpteen other things guaranteed to sink you deeper in the vortex of debt…is it any wonder that personal debt rises by around £1 million every minute?
Welcome to the wonderful world of debt consolidation. Once seen as a last resort, it's now emerging as a lifebelt for those drowning in the ocean of financial demands. Taking out a
debt consolidation loan is often the only way people can actually get back on their feet after suffering from years of dreading the phone ringing, and being scared to open that official looking letter.
A
debt consolidation loan, in principle, is simple. You contact all your debtors for a settlement figure, add all these up, and apply for a loan to cover that amount. Then start writing the cheques and bask in the glow of a single monthly payment. For someone with a half-way decent credit rating, it couldn’t be simpler.
But what if you've marred your credit score by being in debt and can't get a regular
debt consolidation loan? Then you'd need to enlist the services of a specialist debt management company to do it for you. It works in much the same way, except the company will contact your debtors on your behalf and arrange to pay them off. Then, your repayments go to the management company instead. They will charge you a hefty interest fee, but it's often the only way. And at least it's better than having numerous debts to keep track of.
Whatever your chosen debt solution, it's vital that you keep up with any agreed repayments, and try not to get into further debt until everything is paid off.
