Dealing with debt: which approach is best?
Dealing with debt: which approach is best?
Debt. It’s a small word, but it can have potentially big consequences. Borrowers can end up in very different situations, depending on how much they’ve borrowed, how many different lenders they have, what type of debt they’ve taken on and how healthy their overall finances are.
Some people may have a few reasonably sized debts they’re managing to repay comfortably every month – and just want a bit of help making them slightly easier to manage, or repay faster.
Others may be concerned that their debts are getting the better of them, and need some help budgeting and/or improving their debt management skills.
Still others may be in the position where they can no longer afford their agreed monthly repayments to their unsecured lenders – and need to find a way of lowering their repayments ASAP.
They’re all very different scenarios, yet they all have something in common: getting professional debt advice – from http://www.debtadvicenow.co.uk/, for example – could help you find the best way of getting on top of things.
What situation are you in?
The most suitable approach for your debts all depends on what situation you’re in.
Are you repaying your debts well every month, but want to make them simpler to keep on top of? If this is the case, a debt consolidation loan could be the best option. By combining your existing debts into the loan, you’d only have one monthly payment to make to one lender, which could be much easier to keep track of (though you’ll have to commit to regular payments until the total amount is repaid).
Alternatively, you may no longer be able to afford your unsecured debt repayments as agreed per month. Here’s where a debt management plan could help. You could agree smaller monthly repayments with your unsecured lenders over a longer period – so you should be able to repay everything you owe at a realistic rate (or at least until you can start making your original repayments again). Just bear in mind that repaying your debts over a longer period could be more expensive overall (as interest will accrue for longer), and making smaller payments will damage your credit rating for six years.
Get advice
Not sure which approach to take? In a different situation with your debts from the ones discussed here? A professional debt adviser could help you find a suitable solution.